ORCHARD SECURITIES, LLC

The date of this Memorandum is April 30, 2009

Offeree Name: _________________________________ Copy No. ___________

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

BR SENIOR SECURED

DEBENTURE TRUST, LLC$25,000,000 (Subject to increase to $35,000,000)

9.0% Senior Secured Debentures Due 2013

Pursuant to this Confidential Private Placement Memorandum (with all Exhibits, and any future amendments or supplements

hereto, the “Memorandum”), BR Senior Secured Debenture Trust, LLC (the “Trust”), a Delaware limited liability company, is

offering (the “Offering”) to prospective purchasers (“Investors”) an investment in Senior Secured Debentures of the Trust, bearing

non-compounded interest at the annual rate of 9.0% payable monthly, in an aggregate principal amount of up to $25,000,000,

subject to increase to $35,000,000 in the Trust’s sole discretion (the “Secured Debentures”). The Secured Debentures will be

secured by the Trust’s assets, among other collateral, and will be issued subject to a collateral agency and intercreditor agreement (the “Collateral Agency Agreement”).

The Trust is a wholly-owned subsidiary of Bluerock Real Estate, LLC (“Bluerock”). Bluerock is a national real estate investment

firm headquartered in Manhattan, focused on acquiring, developing, managing and syndicating multifamily and commercial

properties throughout the United States. Bluerock and its principals have sponsored and structured real estate transactions totaling

approximately 25 million square feet and with approximately $3 billion in value.

The Trust is a “single purpose entity,” formed and to be operated solely to make first mortgage loans that meet and satisfy specific

underwriting criteria and collateral requirements, are primarily short-term in nature, and shall not exceed a 75% loan-to-value ratio

when made (based on current appraisals by arms-length, MAI-certified appraisers) (the “Qualified Loans”). The Qualified Loans

may include financing for the acquisition or development of real estate projects in which Bluerock or its affiliates have an interest, including but not limited to a $1.28 billion public, non-traded REIT known as Bluerock Enhanced Multifamily Trust, Inc.

An investment in the Secured Debentures is speculative and involves significant risks. See “Risk Factors” beginning on page 9 for a complete discussion of the risks, including, but not limited to, the following:

• even though the Secured Debentures are secured, there is significant risk with respect to the Secured Debentures, including loss of principal;

• the Trust is newly formed and has limited capital;• the Trust has not yet specifically identified or made any Qualified Loans;• the Investors will rely entirely on the Trust to identify Qualified Loans that support the Trust’s obligations on the Secured

Debentures; • there may be significant conflicts of interest among the Trust, Bluerock and their affiliates, which may become borrowers

of Qualified Loans;• risks inherent to the individual real estate projects securing the Qualified Loans;• risks of further national, regional and local economic downturn;• risks in connection with financing markets that could affect the ability of the Trust’s borrowers to service or refinance

Qualified Loans;• the Trust may issue additional debt on a ���������� basis with the Secured Debentures;• there are substantial limitations on an investor’s ability to transfer the Secured Debentures, which are generally illiquid;• risks related to “best efforts” offerings; and

• the Secured Debentures are not a diversified investment.

Price to Investors

Dealer-Manager Fee, Selling

Commissions and

Allowances(1)

Proceeds to

the Trust(2)

Minimum Investment(3) $50,000 $4,375 $45,625

Minimum Offering Amount(4) $500,000 $43,750 $456,250

Maximum Offering Amount(5) $25,000,000 $2,187,500 $22,812,500

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(1) The Secured Debentures will be offered and sold on a “best efforts” basis by broker-dealers (the “Selling Group”), who are members of the Financial Industry

Regulatory Authority, Inc. (“FINRA”). Orchard Securities, LLC will act as Dealer-Manager for the Offering, and will receive a Dealer-Manager Fee of up to 1.25% (“Dealer-Manager Fee”) of the gross proceeds of the Offering (“Gross Proceeds”), selling commissions of up to 6.5% of the Gross Proceeds (“Selling Commissions”), and a nonaccountable marketing and due diligence allowance of up to 1.0% of the Gross Proceeds (“Allowances”). The amount of Selling Commissions will be increased or reduced, however, if a lower or higher commission rate is negotiated with a member of the Selling Group. The Dealer-Manager may reallow the Selling Commissions, and up to 1.0% of the Allowances on a nonaccountable basis, to the Selling Group for their sales of Secured Debentures. Of the Dealer-Manager Fee, up to 0.75% of the Gross Proceeds will be reallowed to registered representatives which may be affiliates of Bluerock for marketing costs related to this Offering, including payments to Bluerock’s internal and external wholesalers. The total aggregate amount of the Dealer-Manager Fee, Selling Commissions and Allowances (“Selling Compensation”) will not exceed 8.75% of the Gross Proceeds. The Trust, in its sole discretion, may sell Secured Debentures net of some or all of the Selling Compensation, to persons purchasing through a registered investment adviser or to affiliates and “friends and family” of Bluerock, the Trust and members of the Selling Group. The Dealer-Manager may sell Secured Debentures as part of the Selling Group, thereby becoming entitled to Selling Commissions and Allowances. See “Plan of Distribution” and “Estimated Use of Proceeds.”

(2) Amounts shown are proceeds after deducting Selling Compensation, but before deducting organization, marketing and other expenses incurred in connection with the Offering (“Organizational Costs and Offering Expenses”). Bluerock will receive a fixed fee of 1.75% of the Gross Proceeds to cover Organizational Costs and Offering Expenses incurred by it and advanced on behalf of the Trust. Bluerock will be solely responsible to pay for all Organizational Costs and Offering Expenses, but will be entitled to retain any unused portion of the fee on a nonaccountable basis. See “Estimated Use of Proceeds” and “Compensation and Fees.”

(3) The minimum purchase is $50,000 in principal amount of the Secured Debentures and is payable in cash upon subscription. The Trust has the right, in its sole discretion, to waive the minimum purchase requirement.

(4) Following completion of the Minimum Offering Amount and the break of escrow and distribution of proceeds by the Escrow Agent, the Offering will continue in the Trust’s discretion until the earlier of (i) the date that subscriptions for the Maximum Offering Amount ($25,000,000) have been received and accepted (subject to the Trust’s sole discretion to increase the Offering to $35,000,000 of Secured Debentures, without further notice), or (ii) April 30, 2010 (subject to the Trust’s sole discretion to extend the Offering for two six-month periods, without further notice) (“Offering Termination Date”).

(5) The Maximum Offering Amount is subject to increase to $35,000,000 in the sole discretion of the Trust. The Selling Compensation, if the increased Maximum Offering Amount is sold, would be a maximum of $3,062,500.

The mailing address of the Trust is c/o Bluerock Real Estate, LLC, 680 5th Avenue, 16th Floor, New York, New York 10019. The telephone number of the Trust is (888) 558-1031. The Secured Debentures offered hereby have not been registered under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), or the securities laws of states, and are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and such laws. The Secured Debentures are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and such laws pursuant to registration or exemption therefrom. Prospective Investors should be aware that they will be required to bear the financial risks of this investment for an indefinite period of time. In making an investment decision, Investors must rely on their own examination of the Trust and the terms of the Offering, including the merits and risks involved.

The Securities Act and the securities laws of certain jurisdictions grant purchasers of securities sold in violation of the registration or qualification provisions of such laws the right to rescind their purchase of such securities and to receive back the consideration paid. The Trust believes that the Offering of the Secured Debentures described in this Memorandum is not required to be registered or qualified. Many of these laws granting the right of rescission also provide that suits for such violations must be brought within a specified time, usually one year from discovery of facts constituting such violation and three years from the violation. Should any investor institute such an action on the theory that the Offering conducted as described herein was required to be registered or qualified, the Trust contends that the contents of this Memorandum constituted notice of the facts constituting such violation.

The Secured Debentures have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Memorandum. Any representation to the contrary is a criminal offense. No person has been authorized to give any information or make any representations other than those contained in this Memorandum, and, if given or made, such information or representations must not be relied upon as having been given by the Trust. This Memorandum does not constitute an offer or solicitation nor will there be any sale of Secured Debentures in any jurisdiction in which such offer, solicitation or sale is not authorized, or in which the person making such an offer is not qualified to do so, or to any person to whom it is unlawful to make an offer, solicitation or sale. Neither the information contained herein, nor any prior, contemporaneous or subsequent communication should be construed by the prospective Investor as legal, tax or financial advice. Each prospective Investor should consult his own legal, tax and financial advisers to ascertain the merits and risks of the transactions described herein prior to purchasing the Secured Debentures.

This Memorandum is intended solely for the use of the person to whom it has been delivered by the Trust or its authorized representative for the purpose of evaluating a possible investment by the recipient in the Secured Debentures described herein, and is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective Investor receiving this document from the Company or its authorized representative). Acceptance of this Memorandum by prospective Investors constitutes an agreement to be bound by the foregoing terms.

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This Memorandum is qualified in its entirety by reference to the Form of Secured Debenture, Collateral Agency

Agreement and the Security Documents, copies of which will be made available upon request and should be reviewed prior to purchasing a Secured Debenture. Statements in this Memorandum are made as of the date of this Memorandum unless stated otherwise, and neither the delivery of this Memorandum at any time, nor any sale hereunder, shall under any circumstance create an implication that the information contained herein is correct as of any other time subsequent to such date. There can be no assurance that the Trust’s investment targets will be achieved, and investment results may substantially vary over time.

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Treasury Department Circular 230 Notice. To ensure compliance with Circular 230, prospective Investors are hereby notified that: Any discussion of federal tax issues contained or referenced in this Memorandum is not intended or written to be used, and cannot be used, by prospective Investors for the purpose of avoiding penalties that may be imposed on them under the Internal Revenue Code of 1986, as amended (the “Code”); such discussion is written in connection with the promotion and marketing by the Trust of the transactions or matters addressed in this Memorandum; and prospective Investors should seek advice based on their particular circumstances from an independent tax advisor.

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FOR FLORIDA RESIDENTS

The securities referred to in this Memorandum have not been registered under the Florida Securities Act. If sales are made to five or more investors in Florida, any Florida investor may, at his option, void any purchase hereunder within a period of three days after he (a) first tenders or pays to the Trust, an agent of the Trust, or an escrow agent the consideration required hereunder or (b) delivers his executed Subscription Agreement, whichever occurs later. To accomplish this, it is sufficient for a Florida investor to send a letter or telegram to the Trust within such three day period, stating that he is voiding and rescinding the purchase. If any purchaser sends a letter, it is prudent to do so by certified mail, return receipt requested, to ensure that the letter is received and to evidence the time of mailing.

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FOR NEW HAMPSHIRE RESIDENTS Neither the fact that a registration statement or an application for a license has been filed under Chapter 421-B of the New Hampshire Revised Statutes with the State of New Hampshire nor the fact that a security is effectively registered or a person is licensed in the State of New Hampshire constitutes a finding by the Secretary of State that any document filed under RSA-421-B is true, complete and not misleading. Neither any such fact nor the fact that an exemption or exception is available for a security or a transaction means that the Secretary of State has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security or transaction. It is unlawful to make, or cause to be made, to any prospective purchaser, customer, or client any representation inconsistent with the provisions of this paragraph.

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FOR PENNSYLVANIA RESIDENTS

These securities have not been registered under the Pennsylvania Securities Act of 1972 in reliance upon an exemption therefrom. Any sale made pursuant to such exemption is voidable by a Pennsylvania purchaser within two business days from the date of receipt by the issuer of his or her written binding contract of purchase or, in the case of a transaction in which there is not a written binding contract or purchase, within two business days after he or she makes the initial payment for the shares being offered. However, this right is not available to any purchaser who is a bank, trust company, savings institution, insurance company, securities dealer, investment company (as defined in the Investment Company Act), pension or profit-sharing trust, any qualified institutional buyer as defined in 17 C.F.R. 230.144A(a), under the Securities Act, or such other financial institutions as defined by the Securities Act or regulation of the Pennsylvania Securities Commission.

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FORWARD LOOKING STATEMENTS Certain matters discussed in this Memorandum are forward-looking statements. They are based on the Trust’s and Bluerock’s current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Trust’s operations and the Qualified Loans expected to be made by the Trust, including, among other things, factors discussed under the heading “Risk Factors” in this Memorandum and the following:

• condition of the U.S. and global financial markets;

• real estate industry and mortgage lending standards and availability;

• performance of the Qualified Loans; and

• cash flow available to the Trust to service the Secured Debentures. The Trust intends to identify forward-looking statements in this Memorandum by using words or phrases such as “anticipates,” “believes,” “estimates,” “expects,” “should,” “intends,” “objective,” “plan,” “predict,” “project” and “will be” and similar words or phrases, or the negative thereof or other variations thereof or comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual transactions, results, performance or achievements of the Trust to be materially different from any future transactions, results, performance or achievements expressed or implied by such forward-looking statements. The cautionary statements set forth under the caption “Risk Factors” and elsewhere in this Memorandum identify important factors with respect to such forward-looking statements, including the following factors that could affect such forward-looking statements due to the real estate focus of the Qualified Loans:

• national and local economic and business conditions, including the current upheavals in the investment markets, which, among other things, may affect demand for properties and the availability and terms of secured and unsecured financing for them;

• the availability of debt and equity capital;

• underlying real estate investment risks; and

• governmental approvals, actions and initiatives, including the need for compliance with environmental and safety requirements, and changes in laws and regulations or the interpretation thereof.

Although the Trust and Bluerock believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there is no assurance that these expectations will be attained or that any deviations therefrom will not be material. Neither the Trust nor Bluerock undertake any obligation to release publicly the result of any revisions to such forward-looking statements that may be made to reflect any future events or circumstances. Prospective investors are cautioned not to put undue reliance on such forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Forward-looking statements speak only as of the date they are made, and none of the Trust, Bluerock or their affiliates undertake to update any of them in light of new information or future events. In addition, any projections and representations, written or oral, which do not conform to this Memorandum must be disregarded, and their use is a violation of law. No representation or warranty is or can be given that the estimates, opinions or assumptions made in or referenced by this Memorandum will prove to be accurate. Prospective Investors should carefully review the assumptions set forth in or referenced by this Memorandum.

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TABLE OF CONTENTS

Page FORWARD LOOKING STATEMENTS ....................................................................................................................iv HOW TO SUBSCRIBE ................................................................................................................................................. 1

Payment of Purchase Price ..................................................................................................................................... 1 SUMMARY OF THE OFFERING ............................................................................................................................... 2

Overview ................................................................................................................................................................ 2 Summary of the Offering ........................................................................................................................................ 2 The Securities ......................................................................................................................................................... 2 The Trust ................................................................................................................................................................ 3 The Collateral, Collateral Agent, and Collateral Agency Agreement .................................................................... 4 Plan of Distribution ................................................................................................................................................ 7 Compensation ......................................................................................................................................................... 8

RISK FACTORS ........................................................................................................................................................... 9 Risks Related to the Trust and the Secured Debentures ......................................................................................... 9 Risks Relating to Conflicts of Interest .................................................................................................................. 11 Risks Related to the Qualified Loans and the Trust’s Business and Operations .................................................. 12 Risks Related to Private Offering and Liquidity .................................................................................................. 15

CONFLICTS OF INTEREST...................................................................................................................................... 17 ESTIMATED USE OF PROCEEDS ........................................................................................................................... 19 BUSINESS PLAN ....................................................................................................................................................... 20

Overview .............................................................................................................................................................. 20 Bluerock Real Estate ............................................................................................................................................ 20 Underwriting Criteria ........................................................................................................................................... 21 Investment Committee .......................................................................................................................................... 21 Qualified Loans .................................................................................................................................................... 22 Identified Borrowers ............................................................................................................................................. 22 Repayment of the Qualified Loans ....................................................................................................................... 23 Segregated Accounts ............................................................................................................................................ 24

CAPITALIZATION OF THE TRUST ........................................................................................................................ 25 MANAGEMENT ........................................................................................................................................................ 25

Bluerock Real Estate ............................................................................................................................................ 25 COMPENSATION AND FEES .................................................................................................................................. 28 WHO MAY INVEST .................................................................................................................................................. 29

Restrictions Imposed by the USA PATRIOT Act and Related Acts .................................................................... 31 PLAN OF DISTRIBUTION ........................................................................................................................................ 32

The Offering ......................................................................................................................................................... 32 Depository Account .............................................................................................................................................. 32 Suitability Requirements for Investors ................................................................................................................. 33 Documents to be Completed by Investors ............................................................................................................ 33 Securities Matters ................................................................................................................................................. 33 Risk of Delivery; Delivery by Mail ...................................................................................................................... 34 State Securities Laws ............................................................................................................................................ 34 No Revocation ...................................................................................................................................................... 34

DESCRIPTION OF THE SECURED DEBENTURES AND SUMMARY OF THE COLLATERAL AGENCY AGREEMENT .............................................................................................................................................. 35

General ................................................................................................................................................................ 35 The Collateral Agency Agreement ....................................................................................................................... 35 Collateral for the Secured Debentures .................................................................................................................. 35 Independent Monitoring of the Collateral ............................................................................................................ 36 Mick & Associates, P.C., LLO ............................................................................................................................. 36 Events of Default and Default Interest ................................................................................................................. 36 Triggering Event; Remedies Against the Collateral ............................................................................................. 36 Collateral Agent’s Authority and Duties .............................................................................................................. 37 Trust Account ....................................................................................................................................................... 38

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Transfer and Exchange of the Secured Debentures .............................................................................................. 39 Debenture Register ............................................................................................................................................... 39 Liquidation Option .............................................................................................................................................. 39 General Redemption Rights ............................................................................................................................... 40 Financial Reports .................................................................................................................................................. 40

MATERIAL FEDERAL INCOME TAX ASPECTS .................................................................................................. 41 Stated Interest ....................................................................................................................................................... 41 Classification of Secured Debentures ................................................................................................................... 41 Purchase of Secured Debentures by Exempt Plans and Other Exempt Organizations ......................................... 42

ERISA CONSIDERATIONS ...................................................................................................................................... 42 Fiduciaries Under ERISA ..................................................................................................................................... 42 Prohibited Transactions ........................................................................................................................................ 43

LITIGATION AND LEGAL MATTERS ................................................................................................................... 44 REPORTS.................................................................................................................................................................... 44 NO RATING ............................................................................................................................................................... 44 ADDITIONAL INFORMATION................................................................................................................................ 44 EXHIBITS EXHIBIT A ................................Subscription Agreement EXHIBIT B ................................Form of Collateral Agency and Intercreditor Agreement EXHIBIT C ................................Form of 9.0% Secured Debenture EXHIBIT D ................................Form of Monitoring Services Engagement Letter EXHIBIT E ................................Form of Pledge and Security Agreement by Bluerock EXHIBIT F ................................Form of Pledge and Security Agreement by the Trust

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HOW TO SUBSCRIBE

If, after carefully reading this entire Memorandum and being fully satisfied with the results of your pre-investment due diligence activities of this Offering, you would like to purchase and invest in the Secured Debentures, you must fully and truthfully complete and sign the Subscription Agreement, attached as Exhibit A hereto. The minimum purchase amount is $50,000, although the Trust may waive the minimum purchase requirement in its sole discretion. Detailed instructions for subscribing for and purchasing a Secured Debenture are contained within in the Subscription Agreement. Subscription Agreements and all attachments should be mailed or delivered to the Dealer-Manager at:

Orchard Securities, LLC

150 West Civic Center Drive, Suite 104 Sandy, Utah 84070

Telephone (801) 316-4301

**NOTE** Faxed or e-versions of the Subscription Agreement and supporting documents are initially preferred to expedite processing, c/o the Trust at fax number (248) 424-5699 or e-mail address investor.relations@bluerockre.com. Upon receipt of your signed Subscription Agreement, verification of your investment qualifications, and acceptance of the subscription by the Trust (in the Trust’s sole discretion), the Trust will notify the Investor of such acceptance. If the Trust determines not to accept the prospective Investor’s subscription, the Trust will promptly return or cause to be returned the funds to such subscriber without interest. Any Subscription Agreement not accepted within 30 days of receipt shall be deemed rejected. The Trust may terminate this Offering at any time, in its sole and absolute discretion. Payment of Purchase Price The full purchase price for your investment in the Secured Debentures must be paid by check or wire upon submission of your Subscription Agreement. Until the Minimum Offering Amount has been raised and before escrow has been broken, all subscription payments must be delivered to an escrow bank account at First Republic Trust Company (the “Escrow Agent”), as follows:

First Republic Trust Company Payable to: BR Senior Secured Debenture Trust Escrow Account

Wire Instructions: Account Number: 62-00-1006

Routing/ABA Number: 321081669 BNF: Trust Department Account No. 992 000 10056

For further credit to: BR Senior Secured Debenture Trust Escrow Account

If the Minimum Offering Amount has not been received and accepted by September 30, 2009 (which may be extended to December 31, 2009, in the Trust’s sole discretion), none of the Secured Debentures will be sold and the amount paid by the prospective Investors will be promptly returned in full, with any interest earned. As soon as practicable after the Minimum Offering Amount has been funded into the Escrow Agent, and upon written instruction from the Trust and the Dealer-Manager to the Escrow Agent to break escrow, the escrowed funds will be released to the Trust Account (defined below) and an initial closing under this Offering will occur. After the Minimum Offering Amount has been raised and after escrow has been broken, all funds should be mailed, delivered or wired to:

JP Morgan Chase, N.A. Payable to: BR Senior Secured Debenture Trust, LLC

Wire Instructions: Account Number: 822442174

Routing/ABA Number: 021000021 Account Name: BR Senior Secured Debenture Trust, LLC

Note that First Republic Trust Company as Escrow Agent has not recommended nor provided any advice in connection with any investment pursuant to this Offering.

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SUMMARY OF THE OFFERING The following summary provides certain limited information about the Trust, the Secured Debentures, Bluerock and this Offering. It should be read in conjunction with, and is qualified in its entirety by, the detailed information appearing elsewhere in this Memorandum. You are required to read this entire Memorandum and whatever additional information you deem necessary before making an investment in the Secured Debentures. Overview The Trust is a newly formed Delaware limited liability company with no prior business operations and is wholly-owned by Bluerock. Bluerock is a national real estate investment firm headquartered in Manhattan, focused on acquiring, developing, managing and syndicating multifamily and commercial properties throughout the United States. The Trust is a “single purpose entity,” formed and to be operated solely to make Qualified Loans, which are first mortgage loans that meet and satisfy specific underwriting criteria and collateral requirements, are primarily short-term in nature and shall not exceed a 75% loan-to-value ratio when made (based on current appraisals by arms-length, MAI-certified appraisers). The Qualified Loans may include financing for the acquisition or development of real estate projects in which Bluerock or its affiliates have an interest, including but not limited to a $1.28 billion public, non-traded REIT known as Bluerock Enhanced Multifamily Trust, Inc. Summary of the Offering The following describes certain material terms of the Offering: The Securities

Securities Offered: The securities being offered hereby are the Secured Debentures in an aggregate principal amount of up to $25,000,000, subject to increase to $35,000,000 in the sole discretion of the Trust. The Secured Debentures are secured by the Trust’s assets, among other collateral, and will be issued subject to the Collateral Agency Agreement attached as Exhibit B hereto. See “Description of the Secured Debentures and Summary of the Collateral Agency Agreement” below.

Interest Rate: The Secured Debentures will bear non-compounded interest at the annual rate of 9.0% per

annum (computed on the basis of a 365-day year) on the outstanding principal, payable monthly on the fifteenth day of the following month. An investment in the Secured Debentures will begin accruing interest upon acceptance and closing of the Investor’s Subscription Agreement.

Maturity Date: The Secured Debentures will mature on December 31, 2013 (the “Maturity Date”),

provided that the Trust may in its sole discretion extend the date of maturity for up to one additional year. During any such extension period, the non-compounded interest rate on the principal shall increase to 10.0% per annum.

Use of Proceeds: The Trust will use proceeds from this Offering to make Qualified Loans, which may be to

affiliates of the Trust and Bluerock and are primarily intended to consist of short-term bridge financings of real estate projects prior to their refinancing, sale, development or syndication. The Trust may reinvest the proceeds from any repaid Qualified Loan into a new Qualified Loan, so long as any new Qualified Loan will not mature later than December 31, 2013, unless the Maturity Date is extended, in which case the new Qualified Loan may not mature later than December 31, 2014.

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Risks: Even though the Secured Debentures are secured, an investment in the Secured Debentures involves significant risks, including loss of principal. See “Risk Factors” beginning on page 9 for a complete discussion of the risks, including, but not limited to, the following:

• the Trust is newly formed and has limited capital; • the Trust has not yet specifically approved any Qualified Loans; • Investors will rely entirely on the Trust to identify and make the Qualified

Loans, which will be necessary to generate the income required to meet the Trust’s operating expenses and payment obligations under the Secured Debentures;

• risks inherent in the real estate projects securing the Qualified Loans; • significant conflicts of interest among the Trust, Bluerock and their

affiliates, which may become borrowers of Qualified Loans; • risks of further national, regional and local economic downturn; • risks in connection with financing markets, which may make it impossible or

prohibitively expensive for borrowers to service or refinance their Qualified Loans;

• substantial limitations on an Investor’s ability to transfer its rights in and to the Secured Debentures, which are generally illiquid;

• the Trust may issue additional debt on a pari passu basis with the Secured Debentures, and which is also secured by the Collateral ;

• risks related to “best efforts” offerings; and • the Secured Debentures are not a diversified investment.

Restrictions on Transferability:

Transferability of the Secured Debentures is restricted by the terms thereof as well as by federal and state securities laws. An investment in the Secured Debentures should not be made by any person who cannot hold the Secured Debentures for an extended if not indefinite period.

Investor Suitability Requirements:

This Offering is strictly limited to Accredited Investors (as defined under Rule 501 of Regulation D as promulgated under the Securities Act) who meet certain minimum financial and other requirements. The Trust, in its sole discretion, reserves the right to approve or disapprove each prospective Investor.

The Trust

Organization:

The Trust is a Delaware limited liability company formed in April 2009. Bluerock is the sole member of the Trust. BR Senior Secured Debenture Trust Manager, LLC, an affiliate of Bluerock, is manager of the Trust (the “Manager”). The principal executive offices of the Trust and Manager are located at c/o Bluerock Real Estate, LLC, 680 Fifth Avenue, 16th Floor, New York, NY 10019, and its telephone number is (888) 558-1031.

“Single Purpose Entity” The Trust is a “single purpose entity” which will be operated solely to make Qualified

Loans. Additional Indebtedness: The Trust may not issue any indebtedness senior to the Secured Debentures in right of

payment or as to the Collateral. However, the Trust may issue additional debt in the future, including additional series of secured debentures, that is pari passu in right of payment to the Secured Debentures. Any Collateral securing the Secured Debentures will likely serve as collateral for such new debt, if issued.

Bluerock: Bluerock focuses on acquiring, managing, developing and syndicating multifamily and

commercial real estate properties throughout the United States. Bluerock and its principals have sponsored and structured real estate transactions totaling approximately 25 million square feet and with approximately $3 billion in value. Bluerock principals have an average of approximately 20 years experience in the finance and real estate fields including financing, development, construction, acquisition, disposition and management of properties.

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Underwriting Criteria: The Trust will be solely responsible for sourcing, underwriting and closing all Qualified Loans. The Trust will generally require and impose upon each prospective borrower the same loan underwriting process as would be normally required and imposed by an arms-length commercial mortgage lender. The Trust will act through an investment committee consisting of two or more members appointed by the Trust, of which the Bluerock’s Managing Director and Chief Investment Officer, James G. Babb, III, shall be initially appointed as the Chairman (the “Investment Committee”). In addition to other underwriting criteria, the Trust may not make any Qualified Loan unless it will be secured by a first position mortgage or deed of trust on the borrower’s property and, when made, the gross loan proceeds do not exceed 75% of the value of such property (the “Maximum Loan-to-Value Ratio”). To underwrite the “value” of the property(ies) being offered to the Trust to secure a prospective Qualified Loan, the Trust and its Investment Committee may for all purposes rely upon the appraised value as provided in an appraisal report prepared by a nationally or regionally prominent MAI-certified appraiser (i.e., by a good standing Member of the Appraisal Institute), dated within 60 days of the date of the loan closing (a “Current MAI Appraisal”). In addition, no Qualified Loan may have an initial maturity longer than six months, provided however, in the sole discretion of the Trust, the maturity date may be extended for an additional six months, if at the time of extension, the Qualified Loan is in good standing and free from defaults. In order to further extend, the Qualified Loan must be entirely re-underwritten, including obtaining a new Current MAI Appraisal to confirm that it does not violate the Trust’s Maximum Loan-to-Value Ratio requirement (or additional equity or collateral must be contributed by the borrower to bring the Qualified Loan into conformance).

Trust Account: Upon attaining the Minimum Offering Amount for the Offering, the Trust will deposit all

Gross Proceeds received by it or the Escrow Agent into a trust account established for the benefit of the Investors (the "Trust Account”). The Trust will only withdraw and disburse funds from the Trust Account for the purposes of:

• funding and servicing the Qualified Loans;

• the application of the Gross Proceeds as described herein;

• expenditures as permitted under the Limited Liability Company Operating Agreement of the Trust;

• making payments of interest and principal to the holders of the Secured Debentures, as and when due, whether as scheduled or due to acceleration; provided, that the Trust may disburse funds to a separate interest account to facilitate such payments; and

• distributions of Trust profits to Bluerock. Unless and until the Collateral Agent provides notice to the Trust that a Triggering Event has occurred, the Trust shall have the right to access the Trust Account, including the rights of deposit, withdrawal and disbursement discussed above. Upon notice of a Triggering Event, the Trust will have no right to access the Trust Account without the prior written consent of the Collateral Agent. Any and all interest earned on amounts held in the Trust Account pending disbursement shall be retained by the Trust in the Trust Account.

The Collateral, Collateral Agent, and Collateral Agency Agreement Collateral Agency Agreement:

The Secured Debentures will be issued subject to the terms of the Collateral Agency Agreement, pursuant to which they will be secured as provided therein. Each Investor will become a party to the Collateral Agency Agreement upon the Trust’s acceptance of its Subscription Agreement. See “Form of Collateral Agency and Intercreditor Agreement” attached as Exhibit B hereto.

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Collateral and Security Documents:

In accordance with the Collateral Agency Agreement, the Secured Debentures will be secured by (the “Collateral”):

• a pledge by Bluerock of all membership interests in the Trust and the Manager (the “Bluerock Collateral”),

• a pledge by the Trust of all of its assets, including bank accounts (the “Trust Collateral”), and

• a collateral assignment by the Trust of all Trust’s rights in the first mortgages and deeds of trust and related collateral which the Trust will receive as security for its Qualified Loans (the “Loan Collateral”), which at a minimum shall include (i) all borrower promissory notes, (ii) all mortgages and deeds of trust secured by the underlying properties (which shall be recorded contemporaneous with each closing), (iii) all mortgagee title insurance policies, on which the Collateral Agent shall be named an additional insured (“Mortgagee Title Insurance Policies”) and (iv) such other and additional loan documents and security instruments as an independent commercial mortgage lender would normally require at the closing of a similar loan (collectively, with the borrower promissory notes, first mortgages and Mortgagee Title Insurance Policies, the “Loan Documents”), and a pledge of the borrower promissory note for each Qualified Loan.

The documents memorializing the granting of such security interests in the Collateral to secure payment of interest on and repayment of principal of the Secured Debentures are referred to hereafter as the “Security Documents.” See “Form of Collateral Agency and Intercreditor Agreement,” “Form of Pledge and Security Agreement by Bluerock,” and “Form of Pledge and Security Agreement by the Trust,” attached as exhibits hereto.

Collateral Agent: The Collateral will be segregated and held in trust by an independent third-party (the

“Collateral Agent”), so the Collateral Agent may directly foreclose on some or all of the Collateral upon an Event of Default (as defined below) under the Secured Debentures and written instructions are given by the Investors to do so (see “Triggering Event” below). Mick & Associates, P.C., LLO, a Nebraska professional corporation, will serve as the initial Collateral Agent.

Monitoring Agreement: The Trust will also engage Mick & Associates, P.C., LLO (in such capacity, the

“Monitor”) to provide certain investment monitoring services under a Monitoring Services Engagement Letter (the “Monitoring Agreement”), a copy of which is attached as Exhibit D hereto. Pursuant to the Monitoring Agreement, the Monitor will have direct access to relevant information from and with respect to the Trust, the Qualified Loans and the Collateral, about which the Monitor may communicate directly with Investors and the Selling Group to keep them independently apprised of the status of same. Bluerock believes the Monitoring Agreement will provide transparency to the Trust and its business and enhance the Collateral Agent’s ability to discover, and deal proactively with the Company to cure, any Event of Default to the benefit of Investors. The Monitor will also serve as Collateral Agent.

Events of Default: Events of default under each Secured Debenture (each, an “Event of Default”) include: (1)

a failure to pay interest when due, if such default continues for 30 days after the applicable interest payment date; (2) a failure to repay principal at the maturity date or by declaration of acceleration, notice of redemption or otherwise, as applicable; (3) an event of bankruptcy with respect to the Trust; or (4) a breach by the Trust in any material respect, after applicable grace periods, if any, of (a) the Collateral Agency Agreement, (b) any Secured Debenture; (c) any Security Documents, or (d) the “single purpose entity” provisions of its Limited Liability Company Operating Agreement. A default under a Qualified Loan will not be an Event of Default under the Secured

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Debentures. Upon the occurrence of an Event of Default, the Secured Debentures will thereupon (until cured, if curable) accrue interest at a default rate, 2.0% in excess of the then-current interest rate on the Secured Debentures; provided however, any such Event of Default (other than a failure to pay interest or principal) may be waived by a vote of Investors holding, in the aggregate, a majority of the then outstanding principal amount of the Secured Debentures (excluding any Secured Debentures held by affiliates of the Trust), and any such waiver will bind all Investors.

Triggering Event A Triggering Event, under the Collateral Agency Agreement, shall occur upon (1) the

occurrence and continuing existence of an Event of Default and (2) an affirmative vote by Investors holding, in the aggregate, more than one-third (33.33%) of the then outstanding principal amount of the Secured Debentures (excluding any Secured Debentures held by affiliates of the Trust), giving the Collateral Agent written notice of their intention to instruct the Collateral Agent to exercise the Investors’ rights and remedies under the Collateral Agency Agreement, any Secured Debenture or any Security Document. As soon as practicable after the Collateral Agent has actual knowledge of an Event of Default, the Collateral Agent shall cause a notice to be issued to Investors seeking their affirmative vote to declare that a Triggering Event has occurred and, if not declared, may in its discretion cause the issuance of similar notices, but only during the pendency of an Event of Default and not more frequently than every 90 days. Upon the occurrence of a Triggering Event, with respect to any enforcement action to be taken against the Collateral, the Collateral Agent shall follow the instructions of Investors holding, in the aggregate, a majority of the then outstanding principal amount of the Secured Debentures (excluding Secured Debentures held by affiliates of the Trust). Following a Triggering Event, all proceeds collected by the Collateral Agent shall be deposited in a separate cash collateral account which shall be opened and owned by the Collateral Agent for the benefit of the Investors (the “Cash Collateral Account”). In the absence of a Triggering Event, the Trust will be able to freely access the Trust Account for the purposes described herein. Upon a Triggering Event, the Trust will not be able to access this account.

Redemption: The Secured Debentures may be redeemed by the Trust, in its sole discretion, in whole or

in part, at any time upon at least 30 days notice to the Investors after December 31, 2010, without premium or penalty. If less than all the Secured Debentures are to be redeemed, the Secured Debentures will be redeemed on a pro rata basis. Secured Debentures called for redemption become due and payable on the redemption date at an amount equal to the outstanding principal amount thereof plus accrued but unpaid interest, or, if less than all of the Secured Debentures are being redeemed, the pro rata portion thereof.

Reporting: The Trust shall provide Investors with statements of their accounts on a quarterly basis

detailing their interest earned during the prior quarterly period and the then outstanding principal balance of the Secured Debentures. The Trust shall also provide an unaudited, annual financial statement of the Trust (within 120 days from the end of the calendar year) at the request of the Investor or their financial advisor. Investors will also be sent an IRS form 1099-INT within 30 days after the end of each calendar year.

Book Entry Only: The Secured Debentures will be held in “book-entry” form. Physical certificates of the

Secured Debentures will be not be available to Investors except as necessary and only upon their specific written request.

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Liquidation: During each year, Investors, or their representatives, may submit to the Trust in writing,

within 90 days from the end of the calendar year, a request for liquidation of their Secured Debentures at the following liquidation price (expressed as percentages of outstanding principal amount), plus accrued interest to the liquidation date:

Year Percentage

2010 94% 2011 96%

2012 98% 2013 100%

2014* 100%

* assumes that the Trust exercises its extension option.

No more than 5.0% of the Gross Proceeds may be liquidated in any one year, provided, however, that the Trust may elect to honor liquidation requests in excess of 5.0% in its sole and absolute discretion. If Investors request liquidation of more than 5.0% of the Gross Proceeds in any one year, and the Trust has elected not to honor the full amount of the liquidation requests in excess of 5.0%, the liquidation amount will be paid to such Investors in the order the liquidation requests were received by the Trust, based on the date of postmark, or, if similar postmarks, the date of initial investment in the Secured Debentures, until an amount equal to 5.0% of the Gross Proceeds, or such other amount in excess of 5.0% that the Trust has elected to honor, has been liquidated. An Investor’s investment in Secured Debentures may not be liquidated in part. Notwithstanding anything to the contrary above, there is no right of liquidation of the Secured Debentures, except in the event of (1) an Investor’s death or debilitating disability, and (2) the Trust’s consent to do so, in its sole and absolute discretion.

Plan of Distribution Minimum Purchase: The Secured Debentures are being issued with a minimum investment of $50,000 and in

additional denominations of $1,000; however, the Trust has the right, in its sole discretion, to waive the minimum purchase requirement.

Minimum Offering Amount:

The Minimum Offering Amount of the Secured Debentures is $500,000. If subscriptions for the Minimum Offering Amount have not been accepted by the Trust by September 30, 2009 (which may be extended to December 31, 2009, in the sole discretion of the Trust), none of the Secured Debentures will be sold and the amount paid by the prospective Investors will be promptly returned in full, together with any interest earned while in escrow. See “Plan of Distribution.”

Offering Termination Date:

The Trust will offer Secured Debentures until the earlier of the date on which the $25,000,000 has been raised (or $35,000,000, if the Trust elects to increase the Maximum Offering Amount) or April 30, 2010 (which may be extended in the Trust’s discretion for up to two additional six month terms, to April 30, 2011 at the latest).

Dealer-Manager and Selling Group:

The Secured Debentures will be offered and sold on a “best efforts” basis by broker-dealers (the “Selling Group”), who are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Orchard Securities, LLC will act as Dealer-Manager for the Offering, and will receive a Dealer-Manager Fee of up to 1.25% (“Dealer-Manager Fee”) of the gross proceeds of the Offering (“Gross Proceeds”), selling commissions of up to 6.5% of the Gross Proceeds (“Selling Commissions”), and a nonaccountable marketing and due diligence allowance of up to 1.0% of the Gross Proceeds (“Allowances”). The amount of Selling Commissions will be increased or reduced, however, if a lower or higher commission rate is negotiated with a member of the Selling Group. The Dealer-Manager

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may reallow the Selling Commissions, and up to 1.0% of the Allowances on a nonaccountable basis, to the Selling Group for their sales of Secured Debentures. Of the Dealer-Manager Fee, up to 0.75% of the Gross Proceeds will be reallowed to registered representatives which may be affiliates of Bluerock for marketing costs related to this Offering, including payments to Bluerock’s internal and external wholesalers. The total aggregate amount of the Dealer-Manager Fee, Selling Commissions and Allowances (“Selling Compensation”) will not exceed 8.75% of the Gross Proceeds. The Trust, in its sole discretion, may sell Secured Debentures net of some or all of the Selling Compensation, to persons purchasing through a registered investment adviser or to affiliates and “friends and family” of Bluerock, the Trust and members of the Selling Group. The Dealer-Manager may sell Secured Debentures as part of the Selling Group, thereby becoming entitled to Selling Commissions and Allowances. See “Plan of Distribution” and “Estimated Use of Proceeds.”

Compensation Organizational costs and offering expenses to Bluerock:

Bluerock will receive a fixed fee of 1.75% of the Gross Proceeds to cover Organizational Costs and Offering Expenses incurred by it and advanced on behalf of the Trust. Bluerock will be solely responsible to pay for any Organizational Costs and Offering Expenses, but will be entitled to retain any unused portion of the fee on a nonaccountable basis. Based on this fee, Bluerock will receive $437,500 if the Maximum Offering Amount is sold, and $612,500 if the increased Maximum Offering Amount is sold.

Dealer-Manager Fee: Individuals that are Affiliates of the Trust (including external and internal wholesalers of

Bluerock) may earn and be entitled to a portion of the Dealer-Manager Fee. Potential Profits and Fees:

Bluerock is the sole member of the Trust and therefore may be entitled to receive or retain profits (i) from operations so long as the Secured Debentures are being paid as and when due and are not otherwise in default, and/or (ii) upon liquidation or dissolution, after the Secured Debentures have been paid in full. In addition, Bluerock or its affiliates may earn fees, profits or other compensation from real estate transactions for which Bluerock may act as a sponsor, or in which it or its affiliates may own equity, and which have been financed in whole or in part with Qualified Loans from the net proceeds of this Offering.

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RISK FACTORS An investment in the Secured Debentures is speculative and is suitable only for persons who are able to evaluate the risks of the investment. An investment in the Secured Debentures should be made only by persons able to bear the risk of and to withstand the total loss of their investment. In addition to the factors set forth elsewhere in this Memorandum and general investment risks, prospective Investors should consider the following risks before making a decision to purchase the Secured Debentures. Risks Related to the Trust and the Secured Debentures

New Venture. The Trust is a new entity with no operating history. Although the management of Bluerock will be involved in the operation of the Trust and has extensive experience in real estate investments and debt financing programs, the Trust is a recently formed business and is subject to the risks involved with any speculative new venture. No assurance can be given that the Trust will be profitable or able to perform its obligations under the Secured Debentures. There is no assurance that the cash flow, profits or capital of the Trust will be sufficient to pay all interest and repay principal on the Secured Debentures in a timely manner or at all. Although the Secured Debentures are secured by Bluerock’s pledge of its membership interests in the Trust and the Manager and the Trust’s pledge of its assets, there is no assurance that the assets underlying such collateral will be sufficient to fully satisfy the Trust’s obligations under the Secured Debentures.

No Qualified Loans have been specifically identified. The Trust has no operating history. The Trust should be considered a “blind pool” because it has not made any Qualified Loans and, notwithstanding the potential borrowers identified in this Memorandum, has not specifically identified or committed to any Qualified Loans that will be made with the net proceeds from the Offering. You will be unable to evaluate the economic merits of a Qualified Loan prior to the Trust’s investment. The Trust may make Qualified Loans that render it unable to perform its obligations under the Secured Debentures.

Reliance on Management. All decisions regarding management of the Trust’s business will be made exclusively by the Manager of the Trust, which is an affiliate of Bluerock, and all investment decisions on behalf of the Trust with regard to making Qualified Loans will be made by an Investment Committee selected by Bluerock. Investors will have no power or authority regarding any of the Trust’s management or operations. Accordingly, you should not invest in the Secured Debentures unless you are willing to entrust all aspects of management to others, as noted above and as more specifically provided for in the Trust’s Limited Liability Company Operating Agreement. Investors will rely upon the Trust, Bluerock and their affiliates to invest the net proceeds of this Offering by making Qualified Loans. You should carefully evaluate the experience of Bluerock and its management before deciding to invest in the Secured Debentures. Note further that, except as specifically provided in the Memorandum, Bluerock may retain independent contractors to provide various services to the Trust. None of Bluerock, its management or any independent contractor will have a fiduciary duty to the Investors.

In addition, the Manager and Investment Committee will determine whether to reinvest proceeds from a

Qualified Loan into a new Qualified Loan. If the Trust’s Qualified Loans are not paid back prior to the maturity date of the Secured Debentures, the Trust will likely not be able to perform its obligations under the Secured Debentures.

The Trust will not have any significant assets other than its rights under the Qualified Loans, which

will be the sole source of income to the Trust. Consequently, Investors will be required to rely and depend upon payments made on or in respect of the Qualified Loans for the payment of interest on and principal of the Secured Debentures. If payments pursuant to the Qualified Loans are insufficient to make the payments of interest or principal on the Secured Debentures when due, the Trust may not have any assets from which to pay any deficiency. In this regard, prospective Investors should note that the Trust will make Qualified Loans with the net (and not gross) proceeds of this Offering, and thus, the Qualified Loans must provide an aggregate return that will allow the Trust to service the interest payments on the Secured Debentures as well as earn back the amount of Selling Compensation and Organizational Costs and Offering Expenses paid from the Gross Proceeds in order to repay the full principal amount of the Secured Debentures.

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Risks Regarding Bluerock. Bluerock and its affiliates are, and may in the future become, involved in real estate projects and, excluding the Trust and its Manager, may guarantee other equity or debt offerings to finance current or future projects, and there may be risks associated with those projects. Accordingly, Bluerock may experience adverse financial events as a result of its other activities and, if so, it is possible its officers and employees may not be available to support the management and operation of the Trust. If that were to occur, the Manager and the Investment Committee may not be adequately staffed and it would be likely that the Trust would be unable to operate its business profitably, adversely affecting its ability to meet its obligations under the Secured Debentures.

No Financial Support From Bluerock. The Trust is wholly-owned by Bluerock. However, Bluerock will

not receive any direct compensation from the proceeds of this Offering, other than its receipt of a fee intended to cover the Organizational Costs and Offering Expenses incurred by Bluerock and advanced on behalf of the Trust for this Offering. The Trust is intended to be fully financially self-supportive, using the proceeds of this Offering to consummate its business plan. Neither Bluerock nor any of its affiliates are obligated to financially support the Trust or its Manager. Neither Bluerock nor its affiliates are obligated to or expect or intend to contribute capital or loan funds to the Trust to enable it to meet its payment obligations under the Secured Debentures. In the unlikely event that any such funds are directly or indirectly provided by Bluerock (which it may do in its sole and absolute discretion), no duty or obligation to do so again in the future may be implied.

Absence of Rating. The Trust has not applied and does not intend to apply to any creditworthiness rating

agency for a rating on the Secured Debentures. Therefore, any comparison made or conclusion drawn regarding the creditworthiness of the Trust, as opposed to the issuer of a rated debt obligation, would be at the risk of the individual prospective Investor.

Absence of Third-Party Registrar, Paying Agent, or Indenture Trustee. The Trust, as the designated keeper, or Registrar, of the records and documentation retained to track the holders of the Secured Debentures, or the Debenture Register and the outstanding principal amount held by each Investor, will maintain the Debenture Register and record all transfers of the Secured Debentures. Similarly, the Trust has not hired any paying agent or administrator to oversee payments on the Secured Debentures. The Trust may have a conflict of interest in serving as the Registrar, and the absence of a third-party Registrar and paying agent may result in less protection to Investors than might be provided by a third-party Registrar or paying agent. Finally, although the Secured Debentures will be issued subject to a Collateral Agency Agreement providing for the orderly administration of the Collateral, the Secured Debentures are not subject to an indenture and may not receive the full protections afforded by the Trust Indenture Act of 1939.

Future offerings of debt securities, which may be pari passu with the Secured Debentures, may

adversely affect the value of the Secured Debentures. The Trust may issue additional debt, including additional series of secured debentures, in the future that are pari passu in right of payment to the Secured Debentures and cross-defaulted with the Secured Debentures. Any Collateral securing the Secured Debentures will likely serve as collateral for such new secured debt, if issued. In that event, the Secured Debentures would share pro rata with any pari passu debt in any foreclosure proceeds of the Collateral as well as payments upon an acceleration of the obligations under the Secured Debentures and the additional debt. Thus, Investors will bear these risks of the Trust’s future offerings.

Investment Company Registration. The Trust does not intend to register as an “investment company”

under the Investment Company Act of 1940, as amended, or 1940 Act, in reliance on an exemption thereunder. If the Trust was unable to comply with an exemption from registration under the 1940 Act, the Trust would be required to register as an “investment company.” As such, the Trust would be subject, among other things, to rules requiring independent oversight of its investment decisions and prohibitions on related party transactions, as well as reporting requirements. These requirements would be onerous and costly to the Trust, and would be wholly incompatible with the business plan of the Trust. If the Trust were not able to consummate its business plan, it would not be able to meet its obligations under the Secured Debentures. The Trust is not providing prior performance tables for Bluerock or prior sponsors with which the members of management of Bluerock were affiliated. Guide 5 under the Securities Act requires certain sponsors of real estate programs to provide prior performance information to investors. This Offering is not subject to the

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Guide 5 requirements and no Guide 5 compliant performance tables have been prepared for the Offering. In addition, the Trust is a recently formed entity. However, some members of management of Bluerock, including Messrs. Kamfar and Babb, have been affiliated with active sponsors in the real estate securities syndication arena. The Trust is not providing prior performance information for these prior programs in this Memorandum. It is possible that if such tables had been prepared, a prospective Investor in the Secured Debentures would decline to invest.

An affiliate of Bluerock, Bluerock Enhanced Multifamily Trust, Inc., for which an affiliate of Bluerock, Bluerock Enhanced Multifamily Advisor, LLC, serves as advisor, currently has a Registration Statement filed and pending effectiveness with the SEC, which is publicly available. This Registration Statement contains prior performance information relating to Bluerock Enhanced Multifamily Trust, Inc. and its affiliates, including Bluerock. This Registration Statement has not been declared effective by the SEC and such prior performance information should not be relied upon in making an investment in the Secured Debentures.

No sinking fund has been established; No Restrictions on Distributions. The Trust is not required to satisfy any minimum schedule of payments into a sinking fund account to provide an ancillary source for payment of the obligations under the Secured Debentures. Further, if the Trust is current on its obligations under the Secured Debentures, there are no restrictions on the Trust’s authority to make distributions to Bluerock, its sole member. Consequently there can be no assurance that funds will be available when needed for interest payments and principal repayments on the Secured Debentures. Risks Relating to Conflicts of Interest

Common ownership among Bluerock and its affiliates may present significant conflicts of interest with respect to the Trust, particularly given the Trust’s intention to make Qualified Loans to affiliates of Bluerock. Bluerock and its affiliates, including the Manager, share common management. This may lead to a conflict of interest between the various roles as owners or officers of Bluerock and its affiliates, including the Trust and its Manager. Also, affiliates of Bluerock are expected to be borrowers under Qualified Loans, so a conflict of interest will arise due to the fact that Bluerock or its affiliates may receive fees or other compensation in connection with the borrower that is an affiliate of Bluerock or a property in which Bluerock or its affiliates otherwise holds an economic interest. Further, the Chairman of the Investment Committee of the Trust, James G. Babb, III, is also the Chief Investment Officer of Bluerock and, as such, will have a conflict of interest with respect to the Investment Committee’s consideration of any application for a Qualified Loan submitted by a Bluerock affiliate. Further, after a Qualified Loan is made, if a Bluerock affiliate is a borrower, the Trust (which will act through its Manager, an affiliate of Bluerock) may be less likely to enforce or exercise all of the Trust’s rights with regard to a Qualified Loan, as compared to the manner in which such rights may be enforced or exercised against a third party who is a borrower for a similar Qualified Loan.

To attempt to mitigate these conflicts of interest, Bluerock in structuring this Offering has, among other

things, provided for a comprehensive Collateral Agency Agreement to protect Investors by providing for the orderly administration of the Collateral, and the Trust has engaged Mick & Associates, P.C., LLO, an independent, nationally recognized due diligence firm (in such capacity, the “Monitor”), to provide investment monitoring services. See “Description of the Secured Debentures and Summary of the Collateral Agency Agreement” below. Notwithstanding such mitigating factors, these conflicts of interests may expose Investors to significant risks regarding the creditworthiness and collectability of Qualified Loans made to Bluerock affiliates. Further, the Monitoring Agreement may be terminated by either the Monitor or the Trust upon 30 days written notice, which if terminated would reduce one of the mechanisms implemented to mitigate conflicts of interest if terminated.

Bluerock and its affiliates engage in other activities outside of the Trust that could cause conflicts of

interest. The principals of Bluerock and its affiliates are employed independently of the Trust and its Manager, and are engaged in substantial activities other than this Offering. Bluerock and its affiliates may have conflicts of interest in allocating time, services and functions between various existing and future enterprises. Further, Bluerock and its affiliates may organize other business ventures that may compete directly with the Trust.

No Arms’-Length Negotiations of Agreements. None of the agreements or arrangements among the

Trust, Bluerock or their affiliates in connection with this Offering were the result of arms’-length negotiations.

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Neither Bluerock nor any affiliates will have fiduciary duties to the Investors. Investors are not

members of the Trust. As a result, neither the Trust nor Bluerock owe any fiduciary duties to the Investors. Traditionally, fiduciary duties would entail obligations of due care and loyalty. In this instance, the Trust and Bluerock believe that their respective obligations to the Investors are solely as set forth in the Collateral Agency Agreement, the Secured Debentures and the Security Documents, this Memorandum and any other agreements entered into in connection therewith for the benefit of the Investors. As such, neither the Trust nor Bluerock or their affiliates are obligated to refrain from engaging in activities or transactions that involve a conflict of interest, which may favor the interests of Bluerock or its affiliates over the interests of the Investors or which are otherwise adverse to Investors, unless such activities or transactions are expressly prohibited or limited in such agreements. The absence of fiduciary duties may allow the Trust to enter into transactions that cause the Trust to be less likely or wholly unable to pay its obligations under the Secured Debentures. Risks Related to the Qualified Loans and the Trust’s Business and Operations

General risks associated with the Trust’s business, specifically real-estate related risks. The economic success of an investment in the Secured Debentures is subject to risks typically associated with loans secured by real estate. This is so because the business of the Trust will be to make Qualified Loans to borrowers that will be primarily secured by a first mortgage on the borrower’s property. As such, the Trust’s business is heavily subject to the risks associated with real estate investment generally. These risks include, but are not limited to:

• adverse changes in general or local economic conditions;

• adverse changes in interest rates and availability of permanent mortgage funds which might make the purchase, sale, financing or refinancing of the borrower’s property difficult or prohibitively expensive;

• local conditions, such as competitive over-building, which might result in an oversupply of available space;

• a decrease in employment which might reduce the demand for real estate in an affected area;

• changes in the value of the real estate because of unknown environmental problems or environmental problems that develop that could require substantial expenditures to remedy;

• limited ability to pursue claims against sellers regarding the condition of the property, chain of title, status of leases, presence of hazardous substances, governmental approvals and entitlements and other significant matters affecting the use, ownership and enjoyment of property;

• the value of the underlying real estate could be significantly affected if the real estate suffered damage that was not insured;

• acts of war; and

• adverse changes in governmental rules, including, without limitation, building, environmental, real estate tax laws and rates and real estate zoning laws.

The Trust may be subject to a high degree of risk associated with Qualified Loans for projects that

purport to take advantage of the opportunities created by the current debt and real estate crisis. Opportunistic investments by borrowers, such as affiliates of Bluerock, may exhibit high mark-to-market volatility, require extensive due diligence and medium-to long-term holding periods, may be illiquid and demand constant monitoring and carefully engineered exit strategies. The Trust may make Qualified Loans to such borrowers. Although Bluerock in structuring this Offering has attempted to mitigate these risks by requiring that all Qualified Loans be short-term in nature and be supported by a Current MAI Appraisal, Investors in the Trust may be exposed to risks of non-payment arising from Qualified Loans to such borrowers. Risk Regarding Capitalization of Trust’s Borrowers and Related Party Lending. The Trust is a Delaware limited liability company formed to issue the Secured Debentures and provide financing for the Trust’s operations and Qualified Loans. Although Bluerock is structuring this Offering to require that all Qualified Loans be subject to the Maximum Loan-to-Value Ratio, among other underwriting criteria, the borrowers to which the Trust will make Qualified Loans may have limited capital, which means they may not be able to meet their payment obligations if they are not able to obtain permanent financing or refinancing or if their real estate projects are unsuccessful. Uncertainty in the financing markets may make it less likely that a borrower will be able obtain permanent financing or a refinancing in order to repay a Qualified Loan. Additionally, a borrower may not be able

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to syndicate a property underlying a Qualified Loan as planned in order to repay the Qualified Loan. See “Repayments of Qualified Loans.” Prospective Investors should note that the U.S. credit markets have experienced extreme illiquidity over the past year, and that the market for syndication of equity in real estate have slowed dramatically. Furthermore, if any of the Qualified Loans are applied for or made to an affiliate of Bluerock, which is an intended use of the net proceeds of this Offering, Bluerock will encounter conflicts of interest in deciding whether to approve the Qualified Loan or, if made, to exercise any remedies if a default were to occur thereunder. See “Conflicts of Interest.”

Speculative Investment. The Qualified Loans may be made to borrowers that are risky or speculative in

nature, which may fail to service or repay their Qualified Loans as and when due. Since the Trust relies on its borrowers to service and repay their Qualified Loans in order to be able to service and repay the Secured Debentures when due, there is no assurance that the Trust will be able to perform its obligations under the Secured Debentures. As such, this is one reason that Bluerock cautions Investors that an investment in the Secured Debentures is a speculative investment may result in a total loss of their entire investment.

The condition of the U.S. and global financial markets has weakened significantly and may continue

to weaken. Investors should be aware that the national and global financial markets are currently volatile and that the condition of the financial markets has become significantly weakened and destabilized in recent months. Continued weakness and instability could adversely affect the Trust’s ability to make Qualified Loans, particularly investments that support the debt service obligations on the Secured Debentures. Further, financial market instability could result in significant regulatory changes that would have an unpredictable affect on the financial markets in general and the Trust’s and Bluerock’s businesses in particular.

A further economic downturn or regional economic softness could adversely affect the economic

performance of the Qualified Loans. The U.S. economy is currently in recession. Investors should be aware that periods of weak economic performance in the United States could adversely affect Qualified Loans. In addition, softness in a regional or state economy could materially and adversely impact real estate operations or markets of borrowers and, if so, may significantly adversely affect the borrowers’ abilities to service Qualified Loans and, therefore, the Trust’s ability to service the Secured Debentures.

Because the properties securing the Qualified Loans might experience periods of illiquidity, the Trust might be unable to liquidate the properties in foreclosure at opportune times and prices, and the Trust’s capital available to fund new Qualified Loans to service the Secured Debentures will be reduced. If the Trust is required to foreclose on the properties securing the Qualified Loans because of a default by the borrower in the payment of its indebtedness, the Trust bears the risk of being unable to monetize or otherwise dispose of its Loan Collateral at advantageous times and prices, or in a timely manner because real estate assets generally experience periods of illiquidity. The lack of liquidity might result from general economic conditions impacting the real estate and credit markets, the absence of a willing buyer or an established market for these assets, as well as legal or contractual restrictions on resale. If the Trust is unable to monetize its collateral promptly or at opportune times, the Trust’s capital available to fund other Qualified Loans will be reduced and its ability to service and/or repay the Secured Debentures will be adversely affected.

The Qualified Loans may not be diversified across a significant number of borrowers or properties.

If the Trust sells only a portion of the aggregate principal amount of Secured Debentures offered pursuant to this Offering, its ability to diversify its Qualified Loans (and, therefore, its ability to spread its risks across many borrowers and/or properties) will be limited. Further, even if the Trust sells a substantial amount of Secured Debentures, since there is no limitation on the amount that the Trust may invest in any one Qualified Loan, it would be possible for the Trust to invest most or all of its available funds with a single borrower or in a single Qualified Loan (or a limited number of borrowers or Qualified Loans). If this were to occur, and the borrower(s) or property(ies) in which the Qualified Loans were concentrated were to suffer adverse events, then the value of the Loan Collateral could be harmed to a greater extent than had the Trust spread its risks across many borrowers and/or properties. If these events were to occur, the Trust would be exposed to a greater risk of substantial loss, which could make it difficult or impossible for the Trust to meet its obligations under the Secured Debentures.

The properties securing the Qualified Loans may not be diversified geographically. If the Trust sells

only a portion of the aggregate principal amount of Secured Debentures offered pursuant to this Offering, its ability

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to diversify its Qualified Loans across metropolitan or geographic regions will be limited. Further, even if the Trust sells a substantial amount of Secured Debentures, since there is no limitation on the amount that the Trust may invest in any one Qualified Loan, it would be possible for the Trust to invest most or all of its available funds in a single Qualified Loan (or a limited number of Qualified Loans) concentrated in a single metropolitan or geographic region (or in an identical region or a limited number of regions). If this were to occur, and the metropolitan area or regions in which the Qualified Loans were concentrated were to suffer an economic downturn or fall out of favor, and the values of real estate in the metropolitan area or regions in which the Qualified Loans were concentrated decline, the value of the property(ies) serving as Loan Collateral could be harmed to a greater extent than had the Trust lent to borrowers with properties located in a greater number of geographic regions. If these events were to occur, the Trust would be exposed to a greater risk of substantial loss, which could make it difficult or impossible for the Trust to meet its obligations under the Secured Debentures.

The properties securing the Qualified Loans may not be diversified across different segments of the

real estate market. If the Trust sells only a portion of the aggregate principal amount of Secured Debentures offered pursuant to this Offering, its ability to diversify its Qualified Loans across different segments of the real estate market (e.g. multifamily, office, hotel, industrial, etc.) may be limited. Further, even if the Trust sells a substantial amount of Secured Debentures, since there is no limitation on the amount that the Trust may invest in any one Qualified Loan, it would be possible for the Trust to invest most or all of its available funds in a single segment or limited number of segments of the real estate market. If this were to occur, and the segment(s) of the real estate market(s) in which the Qualified Loans were concentrated were to suffer an economic downturn or fall out of favor, the value of the property(ies) serving as Loan Collateral could be harmed to a greater extent than had the Trust lent to borrowers with properties representing a greater number of segments of the real estate market. If these events were to occur, the Trust would be exposed to a greater risk of substantial loss, which could make it difficult or impossible for the Trust to meet its obligations under the Secured Debentures.

To foreclose on a Qualified Loan, the Trust may incur significant costs and obligations, which may reduce the amount of funds available to service the Secured Debentures. If the Trust forecloses a property securing a defaulted Qualified Loan (or through other means, including but not limited to by taking a deed-in-lieu of foreclosure, succeeds to title to the property), the Trust may incur significant costs of collection, including but not limited to legal fees and court costs, which will be significant in the event the borrower contests the foreclosure or commences bankruptcy proceedings. Further, to liquidate a foreclosed property after it has acquired title, the Trust may be required to obtain the services of a real estate broker and pay the broker’s commission in connection with the sale thereof. Further, pending such sale or other monetization of the Trust’s interest in the property, the Trust may be obligated to incur substantial carrying costs, including but not limited to property taxes, maintenance costs, mortgage payments, insurance costs and related charges, regardless of whether the property is producing any income.

These costs and expenses of collection may reduce the amount of funds the Trust has available to service the Secured Debentures. Furthermore, if the Trust has defaulted on the Secured Debentures and the Collateral Agent must resort to these remedies to monetize the Loan Collateral for repayment of the Secured Debentures, which include a foreclosure sale of the Qualified Loans, the Investors will nevertheless bear the same or greater costs, with the same or greater impact and risk of full collectability on the Secured Debentures.

Decreases in the value of the properties underlying the Trust’s Qualified Loans may decrease the value of its assets. The Qualified Loans in which the Trust plans to invest are to be secured by first mortgages on the underlying real property. To the extent that the underlying value of the properties securing the Qualified Loans decreases, the Trust’s security may be impaired, which may decrease the value of the Trust’s assets and, likewise, the value of the Loan Collateral securing the Secured Debentures.

The Trust relies on information provided to it by third parties which it cannot always verify in making its investment decisions. If any of these third parties makes an error or misrepresents information to the Trust, the Trust may make Qualified Loans that it would not otherwise make. The Trust’s decisions about which Qualified Loans to fund depend on several factors, such as the third party appraisal of the property (a “Current MAI Appraisal” as defined above) and the Trust’s underwriting of the borrowers. If the appraiser incorrectly appraises the value of a property through a Current MAI Appraisal, or a borrower makes an error or a misrepresentation in the information provided to the Investment Committee, the Trust may make a decision based

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on faulty information, which may lead the Trust to make a Qualified Loan which it would not have otherwise made. If such a mistake or misrepresentation leads the Trust to make such a Qualified Loan, the Trust may suffer an increased risk of failure and, if in fact the Qualified Loan defaults, the reduction in the Trust’s assets and revenues may be such that its ability to service the Secured Debentures may be significantly adversely affected.

Insurance will not cover all potential losses on the underlying real properties and the absence thereof may impair the Trust’s security and harm the value of its assets. The Trust will require that its borrowers acquire and maintain comprehensive insurance covering the underlying property, including liability, fire and extended coverage. There are certain types of losses, however, generally of a catastrophic nature, such as earthquakes, floods and hurricanes that may be uninsurable or not economically insurable. The Trust will not require terrorism insurance from its borrowers. Inflation, changes in building codes and ordinances, environmental considerations, and other factors also might make it infeasible to use insurance proceeds to replace a property if it is damaged or destroyed. Under such circumstances, the insurance proceeds, if any, might not be adequate to restore the economic value of the underlying real property, which might impair the Trust’s security and decrease the value of its assets and, likewise, the value of the Loan Collateral for the Secured Debentures.

The Trust operates in a highly competitive market among competitors who have significantly greater resources than the Trust, and the Trust may not be able to compete effectively. The Trust’s competitors include well-known companies with significant histories of real estate lending. They have substantially greater resources than the Trust, and have established a national presence. Because of greater resources and visibility, some of the Trust’s competitors may be able to adapt more quickly to new opportunities, to devote greater resources to the promotion and sale of their loan products than the Trust is able to achieve, and may have sufficient influence to introduce governmental regulations and policies to create competitive advantages in their favor. In addition, current and potential competitors have established, or may in the future establish, collaborative relationships among themselves or with third parties, including third parties with whom the Trust has business relationships. Accordingly, new competitors or alliances may emerge and rapidly acquire significant market share. There is no assurance that the Trust will be able to successfully compete against either current or potential competitors, or that competition will not have a material adverse effect on the Trust’s business, operating results and financial condition, and, therefore, the Trust’s ability to service and repay the Secured Debentures.

Risks Related to Private Offering and Liquidity Best Efforts Offering; Maximum Proceeds May Not Be Raised. The Trust is seeking Gross Proceeds from this Offering of up to a maximum of $25,000,000, subject to increase to $35,000,000 in the Trust’s sole and absolute discretion. The Trust is conducting the Offering on a “best efforts” basis. Broker-dealers engaged by the Dealer-Manager as members of the Selling Group will not be required to purchase any unsold Secured Debentures. There can be no assurances that the Maximum Offering Amount will be raised. If the Trust only raised a portion of the maximum offering amount, the Trust would be limited in the number and amount of Qualified Loans it could make, and would likely not be diversified. Further, the Trust may terminate the Offering at any time in its sole discretion, which may limit the number and amount of Qualified Loans it could make, which may cause them not to be diversified.

Determination of Price and Interest Rates. The purchase price of and the interest rates applicable to the Secured Debentures have been arbitrarily determined and are not the result of arm’s-length negotiations. The price of the Secured Debentures was determined primarily by the capital needs of the Trust and bears no relationship to any established criteria of value such as book value or earnings per share of the Trust, or any combination thereof. Further, the price of the Secured Debentures is not based on past earnings of the Trust. No valuation or appraisal of the Trust’s potential business has been prepared. The interest rates on the Secured Debentures were determined based on the perception of Bluerock of the marketplace for investments like the Secured Debentures and without any analytical or other technical assessment of the appropriate interest rate to be applied to the Secured Debentures based on the risk of non-payment or other factors.

Unregistered Offerings. This Offering will not be registered with the U.S. Securities and Exchange

Commission, or the SEC, under the Securities Act or with the securities agency of any state. The Secured Debentures are being offered in reliance on an exemption from the registration provisions of the Securities Act and state securities laws applicable to offers and sales to investors meeting the investor suitability requirements set forth

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herein. If Bluerock, the Trust, or the members of the Selling Group should fail to comply with the requirements of such exemption, Investors may have the right to rescind their purchase of the Secured Debentures. This might also occur under the applicable state securities or “Blue Sky” laws and regulations in states where the Secured Debentures will be offered without registration or qualification pursuant to a private offering or other exemption. If a number of Investors were successful in seeking rescission, the Trust and Bluerock would face severe financial demands that would adversely affect the Trust as a whole and, thus, the investment in the Secured Debentures by the remaining Investors.

Absence of Public Market. The Secured Debentures will not be listed on any national securities exchange or included for quotation through an inter-dealer quotation system of a registered national securities association. The Secured Debentures constitute new issues of securities with no established trading market. Furthermore, it is not anticipated that there will be any regular secondary market following the completion of the Offering of the Secured Debentures. Accordingly, the Secured Debentures should be purchased for their potential return only and not for any resale potential, which may or may not exist.

Limited Transferability of the Secured Debentures. In order to purchase the Secured Debentures,

prospective Investors must represent that they are acquiring the Secured Debentures for investment and not with a view to distribution or resale, that they understand that the Secured Debentures are not freely transferable and, in any event, that Investors must bear the economic risk of investment in the Secured Debentures for an indefinite period of time because the Secured Debentures have not been registered under the Securities Act or applicable state “Blue Sky” or securities laws. Further, the Secured Debentures cannot be transferred unless they are subsequently registered or an exemption from such registration is available and all other applicable provisions of this Memorandum and the Subscription Agreement are followed. The transfer of the Secured Debentures requires the prior written consent of the Trust, and there is no guarantee that the Trust will consent to any transfer, which it may grant or withhold in its sole discretion.

Lack of Agency Review. Since the Offering of the Secured Debentures is a private offering and, as such,

is not registered under federal or state securities laws, prospective Investors do not have the benefit of review of this Memorandum by the SEC or any state securities commission. The terms and conditions of the Offering may not comply with the guidelines and regulations established for real estate or financing programs that are required to be registered and qualified with those agencies.

Purchase of the Secured Debentures by Bluerock and/or its affiliates. Bluerock and/or its affiliates

may, in their sole discretion, buy the Secured Debentures for any reason deemed appropriate by them. Any purchase of the Secured Debentures by Bluerock or its affiliates will be on the same terms as other investors, except that it may be made net of Selling Compensation. Upon any such acquisition of the Secured Debentures, Bluerock or its affiliates will generally have the same rights as other Investors, although the aggregate principal amount of Secured Debenture held by them will not be counted in determining a Triggering Event, a waiver of an Event of Default or an acceleration of the Trust’s obligations in an Event of Default. Bluerock and its affiliates, if it chooses to do so, would acquire any Secured Debentures for its/their own account(s) and not with a view towards the resale or distribution thereof.

No Legal Representation of Investors. Each Investor acknowledges and agrees that Hirschler Fleischer,

A Professional Corporation, located in Richmond, Virginia, which is counsel representing the Trust, Bluerock and their affiliates, does not represent and shall not be deemed under the applicable codes of professional responsibility to have represented or to be representing any or all of the Investors in any respect.

Investment by Tax-Exempt Investors. In considering an investment in the Secured Debentures of a

portion of the assets of a pension or profit-sharing plan qualified under Section 401(a) of the Code and exempt from tax under Section 501(a), a fiduciary should consider if: (a) the investment satisfies the diversification requirements of Section 404 of ERISA; (b) the investment is prudent, since the Secured Debentures are not freely transferable and there may not be a market created in which the fiduciary can sell or otherwise dispose of the Secured Debentures; and (c) the Secured Debentures or the underlying assets owned by the Trust are “plan assets” under ERISA.

Loss on Dissolution and Termination. In the event of dissolution or termination of the Trust as provided in the Limited Liability Company Operating Agreement of the Trust, the proceeds realized from the liquidation of

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the Trust’s assets will be used to pay unpaid interest and repay principal on the Secured Debentures, along with any claims of third-party creditors that are pari passu to the claims of the Investors. To the extent such liquidation proceedings are insufficient to pay outstanding principal and interest payments on the Secured Debentures, Investors will have to look to the Collateral to satisfy any outstanding obligations on the Secured Debentures, which may be insufficient to fully satisfy them.

Limitation of Liability/Indemnification of Bluerock and its affiliates. Bluerock and its affiliates, and their respective principals, owners, officers, employees, attorneys and agents (including but not limited to such persons which also are members of the Trust’s Investment Committee) shall not be liable to the Trust or Investors for errors of judgment or other acts or omissions not constituting fraud or gross negligence, and, as provided in the Trust’s Limited Liability Company Operating Agreement, shall be indemnified and held harmless by the Trust from all claims and any other liability in connection with or in arising in any manner from the Offering or any Qualified Loans (an “Indemnification Claim”). A successful Indemnification Claim would deplete the Trust’s assets by the amount paid, which could affect the ability of the Trust to service or repay the Secured Debentures when due.

The Secured Debentures may not be suitable investments. Prospective Investors should consult with

their own financial, legal and tax advisors prior to making any decision to invest in securities that are the subject of this Offering. Before any Subscription Agreement is accepted from an Investor, the Trust will require each Investor to represent his or her qualifications to invest in the Secured Debentures, including that such Investor is an “accredited investor” (as such term is defined in the Securities Act), and that he or she has had an adequate opportunity to ask questions and receive any additional information material to their investment decision and that he or she is able to bear the risk of loss of all its investment in the Secured Debentures. The Trust will rely upon the truth and accuracy of these representations by each Investor in making its determination whether to accept the Investor’s Subscription Agreement.

CONFLICTS OF INTEREST As noted in the “Risk Factors” section of this Memorandum, there may be significant conflicts of interest by and among the Trust, Bluerock and their affiliates, particularly if affiliates of Bluerock are borrowers under the Qualified Loans. Investors are not members of the Trust. Traditionally, fiduciary duties would entail obligations of due care and loyalty to owners of the equity in an entity. Here, however, the Investors are creditors of, not equity interest holders in, the Trust. Therefore, the Trust’s obligations to the Investors are contractual in nature, as summarized in this Memorandum (including its Exhibits), and not fiduciary in nature. As such, neither the Trust nor Bluerock or their affiliates shall be obligated to refrain from engaging in activities or transactions that involve a conflict of interest, which may favor the interests of Bluerock or its affiliates over the interests of the Investors and may otherwise be adverse to Investors, unless such activities or transactions are expressly prohibited or limited in applicable agreements. The absence of fiduciary duties may allow the Trust to enter into transactions that cause the Trust to be less likely or wholly unable to perform its obligations under the Secured Debentures. The principals of Bluerock and its affiliates are employed independently of the Trust and its Manager, and are engaged in substantial activities other than this Offering. Bluerock and its affiliates may have conflicts of interest in allocating time, services and functions between various existing and future enterprises. Further, Bluerock and its affiliates may organize other business ventures that may compete directly with the Trust. Bluerock and its affiliates, including the Manager, share common management. This may lead to a conflict of interest between the various roles as owners or officers of Bluerock and its affiliates, including the Trust and its Manager. Also, even though affiliates of Bluerock are expected to be borrowers for many of the Qualified Loans, a conflict of interest will arise due to the fact that Bluerock or its affiliates may receive fees or other compensation in connection any Qualified Loan with respect to which the borrower is an affiliate of Bluerock or in which Bluerock otherwise holds an economic interest in the property. Further, the Chairman of the Investment Committee of the Trust, James G. Babb, III, is also the Chief Investment Officer of Bluerock and, as such, will have a conflict of interest with respect to the Investment Committee’s consideration of any application for a Qualified Loan submitted by a Bluerock affiliate. Further, after a Qualified Loan is made, if a Bluerock affiliate is a borrower, the Trust (which will act through its Manager, an affiliate of Bluerock) may be less likely to enforce or exercise all of the

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Trust’s rights with regard to a Qualified Loan, as compared to the manner in which such rights may be enforced or exercised against a third party who is a borrower for a similar Qualified Loan. A third-party management team may be more risk-averse and prudent in making such decisions than a management team with an ownership stake or other pecuniary interest in an investment entity, such as Bluerock and/or its affiliates.

To attempt to mitigate these conflicts of interest, Bluerock in structuring this Offering has, among other things, provided for a comprehensive Collateral Agency Agreement to protect Investors by providing for the orderly administration of the Collateral, and the Trust has engaged Mick & Associates, P.C., LLO, an independent, nationally recognized due diligence firm (in such capacity, the “Monitor”), to provide investment monitoring services. See “Description of the Secured Debentures and Summary of the Collateral Agency Agreement” below. Notwithstanding such mitigating factors, these conflicts of interests may expose Investors to significant risks regarding the creditworthiness and collectability of Qualified Loans made to Bluerock affiliates. Further, the Monitoring Agreement may be terminated by either the Monitor or the Trust upon 30 days written notice, which would reduce one of the mechanisms implemented to mitigate conflicts of interest if terminated. Mick & Associates, P.C., LLO shall also serve as the initial Collateral Agent under the Collateral Agency Agreement, which is not subject to voluntary termination by either party.

Finally, conflicts of interest arise in that: (i) Bluerock will receive a fixed fee equal to 1.75% of the Gross Proceeds, intended to cover the Organizational Costs and Offering Expenses incurred by Bluerock and advanced on behalf of the Trust for this Offering, but which will be paid on a nonaccountable basis, (ii) external and internal wholesalers of Bluerock may earn a portion of the Dealer-Manager Fee, and (iii) Bluerock or its affiliates may earn fees, profits or other compensation from real estate transactions for which Bluerock may act as a sponsor, or in which it or its affiliates may own equity, and which have been financed in whole or in part with Qualified Loans from the net proceeds of this Offering.

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ESTIMATED USE OF PROCEEDS The Trust anticipates that the proceeds from the issuance of Secured Debentures will be used approximately as follows:

Increased Minimum Maximum Maximum Offering Offering Offering Amount Percent Amount (1) Percent Amount Percent

SOURCE OF FUNDS Sale of Secured Debentures $500,000 100.00% $25,000,000 100.00% $35,000,000 100.00% USE OF FUNDS Broker-Dealer Commissions

(2) $ 37,500 7.50% $ 1,875,000 7.50% $ 2,625,000 7.50% Dealer-Manager Fees (2) $ 6,250 1.25% $ 312,500 1.25% $ 437,500 1.25% Organizational and $ 8,750 1.75% $ 437,500 1.75% $ 612,500 1.75% Offering Expenses (3) Qualified Loans to Entities $447,500 89.50% $22,375,000 89.50% $31,325,000 89.50% Total Use of Proceeds $500,000 100.00% $25,000,000 100.00% $35,000,000 100.00%

(1) Subject to increase to $35,000,000 in the sole discretion of the Trust. (2) The Secured Debentures will be offered and sold on a “best efforts” basis by broker-dealers (the “Selling Group”), who are

members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Orchard Securities, LLC will act as Dealer-Manager for the Offering, and will receive a Dealer-Manager Fee of up to 1.25% (“Dealer-Manager Fee”) of the gross proceeds of the Offering (“Gross Proceeds”), selling commissions of up to 6.5% of the Gross Proceeds (“Selling Commissions”), and a nonaccountable marketing and due diligence allowance of up to 1.0% of the Gross Proceeds (“Allowances”). The amount of Selling Commissions will be increased or reduced, however, if a lower or higher commission rate is negotiated with a member of the Selling Group. The Dealer-Manager may reallow the Selling Commissions, and up to 1.0% of the Allowances on a nonaccountable basis, to the Selling Group for their sales of Secured Debentures. Of the Dealer-Manager Fee, up to 0.75% of the Gross Proceeds will be reallowed to registered representatives which may be affiliates of Bluerock for marketing costs related to this Offering, including payments to Bluerock’s internal and external wholesalers. The total aggregate amount of the Dealer-Manager Fee, Selling Commissions and Allowances (“Selling Compensation”) will not exceed 8.75% of the Gross Proceeds. The Trust, in its sole discretion, may sell Secured Debentures net of some or all of the Selling Compensation, to persons purchasing through a registered investment adviser or to affiliates and “friends and family” of Bluerock, the Trust and members of the Selling Group. The Dealer-Manager may sell Secured Debentures as part of the Selling Group, thereby becoming entitled to Selling Commissions and Allowances. See “Plan of Distribution.”

(3) Bluerock will receive a fixed fee of 1.75% of the Gross Proceeds to cover Organizational Costs and Offering Expenses

incurred by Bluerock and advanced on behalf of the Trust in this Offering. Bluerock will be responsible for all Organizational Costs and Offering Expenses and will be entitled to retain any unused portion of this fee on a nonaccountable basis.

Before net proceeds of this Offering are deployed by the Trust for Qualified Loans and expenses of operation, they may be invested temporarily in liquid U.S. government securities, in short-term money market funds, in certificates of deposit, in time or demand deposits of commercial banks, or in similar investments. In addition, such portion of the net proceeds, as is reasonable in the Trust’s sole discretion, may be used to service the Secured Debentures and, thus, make interest and principal payments thereon.

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BUSINESS PLAN

Overview The Trust is a recently formed Delaware limited liability company, and is wholly owned by Bluerock. BR Senior Secured Debenture Trust Manager, LLC, a Delaware limited liability company wholly owned by Bluerock, serves as the Trust’s Manager. The principal executive offices of the Trust and the Manager are located at c/o Bluerock Real Estate, LLC, 680 Fifth Avenue, 16th Floor, New York, NY 10019, and its telephone number is (888) 558-1031.

The Trust is a “single purpose entity” and, as such, may engage only in the business of making Qualified Loans as provided in this Memorandum. The Trust may not issue any indebtedness senior to the Secured Debentures in right of payment or as to the Collateral. However, the Trust may issue additional debt in the future, including additional series of secured debentures, that is pari passu in right of payment to the Secured Debentures. Any Collateral securing the Secured Debentures will likely serve as collateral for such new secured debt, if issued. Proceeds from the sales of Secured Debentures pursuant to this Offering will be used to make Qualified Loans to various entities, which may include affiliates of Bluerock, primarily to fund the acquisition or development, or meet the other financing requirements of, the borrowers’ real estate projects, prior to the refinancing, sale, resale, development, redevelopment or third-party syndication of such real estate by such borrowers. Among other requirements, discussed below, each Qualified Loan must be secured by a first position lien on the borrower’s property and the loan-to-value ratio (based on a Current MAI Appraisal) on the Qualified Loan may not exceed 75% when made. The Trust will not have any employees or pay any salaries, although it will be responsible to reimburse its Manager and the members of its Investment Committee for their reasonable expenses actually incurred for Trust business. To the extent that the Trust incurs transaction costs, such as expenses for due diligence or otherwise in connection with the underwriting and/or closings of the Qualified Loans, it is expected that the borrowers will be responsible to pay or reimburse them from their deposits or Qualified Loan proceeds. To the extent the Trust incurs other direct expenses of operation (for example, without limitation, costs of collection, costs of insurance coverage, “dead deal” expenses incurred on Qualified Loans that fail to close, etc.), these also would constitute operating expenses of the Trust. Bluerock Real Estate

Bluerock focuses on acquiring, managing, developing and syndicating multifamily and commercial real estate properties throughout the United States. Bluerock and its principals have sponsored and structured real estate transactions totaling approximately 25 million square feet and with approximately $3 billion in value. Bluerock principals have an average of approximately 20 years experience in the finance and real estate fields including financing, development, construction, acquisition, disposition and management of properties. As a national real estate sponsor, Bluerock is substantially involved in institutional-quality real estate and real estate projects, developments, businesses and transactions. As such, Bluerock requires ready access to substantial capital to finance its acquisitions and other real estate activities and to assist it in acquiring and developing quality properties at attractive prices. In today’s environment, sellers are often placed under time pressures by their lenders or stakeholders. Bluerock believes that it can acquire property at what it believes are opportunistic prices (i.e., prices below what would be available in an otherwise efficient market) from sellers who are distressed or face time-sensitive deadlines and are in need of liquidity. In these transactions, often sufficient time is not available to secure bank or other financing from institutional lenders, few of which are active in this credit-constrained environment and, of those that are active, many are not able or willing to act quickly enough to meet the circumstances. Accordingly, a main purpose of this Offering is to raise proceeds which the Trust may use to make Qualified Loans to Bluerock or its affiliates for the purposes discussed herein. Proceeds from the sale of Secured Debentures, are expected to provide readily available funds at the level of the Trust. The Trust’s funds will be segregated from Bluerock and will not be loaned or advanced to any borrower, unless and until borrower meets the Trust’s and its Investment Committee’s objective underwriting criteria and collateral requirements.

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Underwriting Criteria The Trust will be responsible to source, underwrite and close all Qualified Loans, acting through its Investment Committee (see “Investment Committee” below). Generally, the Trust and its Investment Committee will require and impose upon each prospective borrower the same loan underwriting process as would be normally required and imposed by an arms-length commercial mortgage lender. Notwithstanding such general guidance, the Investment Committee’s primary and paramount underwriting criteria (“Underwriting Criteria”) are as follows:

1. Each borrower must be a “single purpose entity,” formed and operated solely for the purpose of owning a single and specific parcel of real property;

2. Each borrower must be authorized and empowered to grant and, at the Qualified Loan closing, must deliver

to the Trust a first priority mortgage or deed of trust on its property to secure the Qualified Loan;

3. The gross proceeds of the Qualified Loan, when funded, may not exceed 75% of the value of the property or properties on which the Trust will receive a first mortgage or first mortgages as security for the Qualified Loan (the “Maximum Loan-to-Value Ratio”);

4. To underwrite and determine the “value” of any property offered to secure a Qualified Loan, the Trust shall

obtain and, for all purposes may rely upon, an appraisal report prepared by an independent, nationally or regionally prominent MAI-certified appraiser (i.e., by a good standing Member of the Appraisal Institute), dated within 60 days of the date of the Loan Closing (a “Current MAI Appraisal”);

5. Each Qualified Loan shall be evidenced by a separate borrower promissory note which specifically

corresponds with one or more first mortgages, which must serve as primary security for the Qualified Loan;

6. No borrower promissory note may have an initial maturity longer than six months, provided however, in the sole discretion of the Trust the maturity date may be extended for an additional six months if, as of the date of the extension, the Qualified Loan is in good standing and free from defaults;

7. In order to extend the maturity date of any Qualified Loan beyond one year from the date of the Qualified

Loan closing, the Qualified Loan must be entirely re-underwritten, including obtaining a new Current MAI Appraisal to confirm that it does not violate the Trust’s Maximum Loan-to-Value Ratio requirement (or additional equity or collateral must be contributed by the borrower to bring the Qualified Loan into conformance), and new Investment Committee approval shall be required; and

8. At each Qualified Loan closing, the Trust must receive from its borrower a package of Loan Collateral, which at a minimum shall include (i) the borrower promissory note, (ii) the first mortgage (which shall be contemporaneously recorded), (iii) a mortgagee title insurance policy insuring a first position lien against the property in favor of the Trust against the subject property to secure the Qualified Loan, on which the Collateral Agent shall be named an additional insured (the “Mortgagee Title Insurance Policy”) and (iv) such other and additional loan documents and security instruments as an independent commercial mortgage lender would require normally at the closing of a similar loan (collectively, with the borrower promissory note, first mortgage and Mortgagee Title Insurance Policy, the “Loan Documents”).

Investment Committee To underwrite prospective Qualified Loans and to ensure all Underwriting Criteria are satisfied, the Trust shall act through an Investment Committee. The Investment Committee shall have two or more members selected by the Trust. James G. Babb, III, Managing Director and the Chief Investment Officer of Bluerock, shall be the initial Chairman of the Trust’s Investment Committee. As such, Mr. Babb shall be principally responsible for underwriting and approving all Qualified Loans. Mr. Babb has been involved exclusively in real estate acquisition, management, financing and disposition for more than 20 years, primarily on behalf of investment funds since 1992. Prior to his tenure with Bluerock, Mr. Babb was a founder and Senior Vice President of Starwood Capital, where he was involved in the formation of seven private

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real estate funds that invested approximately $8 billion in approximately 250 separate transactions. Of those investments, Mr. Babb personally led or shared investment responsibility for the structuring of over 75 transactions totaling $2.5 billion in value and more than 20 million square feet. In addition, Mr. Babb played a lead role in creating and launching a private fund focused on, among other things, high-yield debt and debt/equity investments secured or otherwise backed by commercial real estate; investments in that fund were subsequently used to sponsor the public offering of iStar Financial, the largest publicly owned finance company at that time focused exclusively on commercial real estate. The members of the Investment Committee shall serve without compensation, and shall be indemnified by the Trust for claims or losses arising from their actions and decisions, except for their own fraud or gross negligence.

Qualified Loans The Trust will use proceeds from this Offering to make Qualified Loans to borrowers, which may include affiliates of Bluerock. The Qualified Loans are expected to primarily consist of short-term bridge financings of real property prior to their refinancing, sale, resale, development, redevelopment or syndication to third-parties through subsequent securities offerings. Although not restricted to any particular property size or class, the Trust expects that its primary borrowers will be acquirers and developers of multifamily residential and commercial real estate projects. The Trust may not make Qualified Loans to principals, officers or employees of Bluerock or those of its affiliates, or which are to be secured primarily by property not located in the United States. The Qualified Loans will initially have a term of six months or less. As Qualified Loans are repaid, the proceeds will be available to the Trust to make new Qualified Loans. The Trust will require that all Qualified Loans are refinanced or otherwise repaid so as to coincide with the maturity date of the Secured Debentures. Although not restricted, it is expected that the properties to which the Trust will make Qualified Loans will focus on multifamily residential or commercial real estate properties and developments, which will generally fall into stabilized, value-added or opportunistic categories:

Stabilized. Fully operational, substantially leased-up properties, which provide consistent, lower risk returns for equity owners.

Value-Added. Properties that are undervalued for a variety of reasons and are generally candidates for adding value through re-leasing, re-tenanting or re-positioning strategies. Opportunistic. Properties that are candidates for adaptive reuse, which generally involve the conversion of a property from an existing use to a ‘higher and better’ use, and which could involve the development of complementary structures.

The Trust may be a participating first mortgage lender with other lenders on loan transactions primarily secured by first mortgage liens, in which case the Loan Documents would be expected to include a commercially reasonable intercreditor agreement with the Trust’s co-lenders. Identified Borrowers Initially, the Trust has identified the following Bluerock affiliates which may become borrowers of the Trust, subject to their satisfaction of all Underwriting Criteria and approval by the Trust’s Investment Committee:

Bluerock Special Opportunity + Income Fund, LLC

Bluerock Special Opportunity + Income Fund, LLC, is a Delaware limited liability company and an affiliate of Bluerock (the “Fund”). The Fund was formed for the principal purpose of acquiring a diversified portfolio of real estate, including properties to which the Fund can add value through development, redevelopment, renovation or repositioning, along with interests in stabilized properties which can provide stability and income (the “Projects”). The Fund’s focus will be in markets with strong job and population growth characteristics, high barriers to entry, or other unique demographic characteristics. The Fund’s primary strategies are to:

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• acquire interests in stabilized properties to provide stability and income;

• acquire and add value through renovating, repositioning or redeveloping properties;

• purchase and develop property with excess land or unrealized development rights; and

• acquire multi-asset loan or property portfolios that have a value-added opportunity. The Fund’s most recent acquisitions were three apartment projects in December 2008, totaling $25,504,000 in transaction value and consisting of 469 apartment units, in which the Fund was an 85% joint venture partner with the Lynd Company, one of the top 50 Apartment Managers in the United States, with over 30,000 units under management according to the National Multi-Housing Council.

The Fund generally expects to hold and operate its Projects for approximately 3 to 5 years. The Trust expects to make Qualified Loans to the Fund for the purposes of providing acquisition capital on a short-term basis prior to securing the permanent financing for such acquired properties.

Bluerock Enhanced Multifamily Trust, Inc.

Bluerock is the sponsor of a $1.28 billion public, non-traded real estate investment trust known as Bluerock Enhanced Multifamily Trust, Inc., a Maryland corporation (the “REIT”). As of the date of this Memorandum, the Registration Statement for the REIT has not been declared effective by the SEC and therefore none of its provisions, including but not limited to the prior performance information contained therein, should be relied upon by Investors when considering whether to invest in the Secured Debentures. The REIT was formed to acquire a diversified portfolio of real estate and real estate-related debt and investments, with a primary focus on well-located, institutional quality multifamily residential properties with strong and stable cash flows, at which the REIT intends to implement Bluerock’s "Enhanced Multifamily'' strategies and initiatives, intended to increase rents, tenant retention and property values, and generate attractive returns for its investors. The REIT also intends to acquire well-located value-added apartment properties, which present significant opportunities for short-term capital appreciation, such as those requiring repositioning, renovation or redevelopment, or available at opportunistic prices from distressed or time-constrained sellers. If the REIT’s Registration Statement becomes declared effective with the SEC and the REIT commences business operations, the Trust expects to make Qualified Loans in connection with the REIT’s business operations, primarily to provide the REIT with acquisition capital for multifamily properties prior to securing replacement financing. In such instances, the REIT intends to form a separate “single person” subsidiary (a “Project SPE”) to serve as the Trust’s borrower. It is possible such Project SPEs will be joint ventures with other institutional investors, but over which the REIT or its affiliate intends to retain control.

BR 1355 First Avenue Development, LLC

BR 1355 First Avenue Development, LLC (“1355”) is a Delaware limited liability company and an affiliate of Bluerock. 1355 is engaged in the development of a 34-story, ultra-luxury residential tower, located at 1353-1355 First Avenue, between 72nd and 73rd Streets, in New York, New York. 1355 intends to construct a glass-wall design building, with full amenities, for 45 luxury residences, many of which will feature private full-floor floor plans, private elevator entrances, high ceilings, and protected views. The underlying property was acquired in June 2007. To date, approximately $46 million in equity and subordinated debt has been raised for this project, through previously syndicated Reg D offerings. There is no mortgage presently recorded against the property. The Trust may make Qualified Loans to 1355, including for a potential refinancing of existing seller financing on a short-term basis prior to securing construction financing for the property. Repayment of the Qualified Loans The Trust anticipates that its borrowers will service their respective Qualified Loans to the Trust (and the Trust in turn will service the Secured Debentures) from one of three sources or a combination thereof. The three sources, which will vary substantially in order of importance and priority from borrower to borrower are: (1) operating cash

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flow to the extent it may exist (borrowers are not required to have operating cash flow as a condition to qualifying for a Qualified Loan); (2) new loans or refinancings obtained by the borrower, which may include loans from Bluerock or other Affiliates; and (3) sales of some or all of the borrower’s or real property assets or ownership interests, such as, without limitation, to tenant in common or limited liability company equity investors (i.e., a securities offering). To the extent that an affiliate of Bluerock becomes a borrower, it is expected that Fannie Mae or Freddie Mac will be Bluerock’s preferred lender to refinance its Qualified Loans. In 2008, Bluerock affiliates closed six separate loans for six separate apartment projects with these agencies, three financed by Fannie Mae and three by Freddie Mac. There can be no assurance that funds will be available from any of the designated sources to pay the interest or to repay the principal of the Qualified Loans at their due dates.

Segregated Accounts Depository Account Prior to breaking escrow, all subscription payments received for the Secured Debentures will be deposited in escrow in a depository account (the “Depository Account”) with the Escrow Agent. Upon written instruction by the Trust and the Dealer-Manager and upon obtaining the Minimum Offering Amount, the funds in the Depository Account will be released to the Trust Account, with any interest earned during the escrow period disbursed to the Trust for its benefit. Trust Account Upon attaining the Minimum Offering Amount for the Offering, the Trust will deposit all Gross Proceeds received by it or the Escrow Agent into the Trust Account established for the benefit of the Investors. The Trust will only withdraw and disburse funds from the Trust Account for the purposes of:

• funding and servicing the Qualified Loans;

• the application of the Gross Proceeds as described herein;

• expenditures as permitted under the Limited Liability Company Operating Agreement of the Trust;

• making payments of interest and principal to the holders of the Secured Debentures, as and when due, whether as scheduled or due to acceleration; provided, that the Trust may disburse funds to a separate interest account to facilitate such payments; and

• distributions of Trust profits to Bluerock. The Trust must further direct borrowers under its Qualified Loans to make payments directly into the Trust Account. Unless and until the Collateral Agent provides notice to the Trust that a Triggering Event has occurred, the Trust shall have the right to access the Trust Account, including the rights of deposit, withdrawal and disbursement discussed above. Upon notice of a Triggering Event, the Trust will have no right to access the Trust Account without the prior written consent of the Collateral Agent. Any and all interest earned on amounts held in the Trust Account pending disbursement shall be retained by the Trust in the Trust Account. Cash Collateral Account The Collateral Agent shall establish an interest-bearing demand deposit cash collateral account (“Cash Collateral Account”), and the Collateral Agent and the Investors shall deposit the following amounts into it:

• any proceeds of any collection, recovery, receipt, appropriation, realization or sale of any or all of the Collateral or the enforcement of any Secured Debenture (including acceleration) or any Security Document;

• any amounts held in the Cash Collateral Account at the time a Triggering Event occurs; and

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• any payments received or otherwise realized by any Investor in respect of amounts due from the Trust on or after the date on which a Triggering Event has occurred.

These requirements will also apply to the holders of any additional debt secured by the Collateral. Promptly after the deposit of any amount into the Cash Collateral Account, the Collateral Agent will distribute such amount to the Investors on a pro rata basis in proportion to amounts due from the Trust and in accordance with the priorities set forth under the Collateral Agent’s Authority and Duties section, below.

CAPITALIZATION OF THE TRUST

Capitalization of the Trust The following is the proposed capitalization of the Trust:

Maximum Offering Increased Maximum

Offering

9.0% Secured Debentures $ 25,000,000 $ 35,000,000

Member Capital 1,000 1,000

Total Capitalization (1) $ 25,001,000 $ 35,001,000

(1) Anticipated net proceeds, after payment of offering costs, will be $22,375,000 at the maximum offering and $31,325,000 at the increased maximum offering.

MANAGEMENT Bluerock Real Estate Bluerock, a Delaware limited liability company, is headquartered in Manhattan, at 680 Fifth Avenue, 16th Floor, New York, NY 10019, with regional offices in Phoenix, Arizona and Southfield, Michigan. The Trust is a wholly-owned subsidiary of Bluerock. An affiliate of Bluerock is Manager of the Trust. Bluerock is a national real estate investment firm, focused primarily on acquiring, managing, developing and syndicating multifamily and commercial properties throughout the United States. Bluerock and its principals have sponsored and structured real estate transactions totaling approximately 25 million square feet with approximately $3 billion in value. Bluerock principals have an average of approximately 20 years experience in the finance and real estate fields including financing, development, construction, acquisition, disposition and management of properties. Bluerock has a number of institutional relationships and has partnered with and/or purchased or financed projects from institutions such as Angelo Gordon & Co., Goldman Sachs / Whitehall, JP Morgan, Citibank, BankAmerica, Legg Mason Real Estate Investors, Blackacre Capital, CapitalSource, and Corus Bank. The following persons are senior members of Bluerock’s team:

Name Position Age R. Ramin Kamfar Founder & CEO 45 James G. Babb, III Managing Director, Chief Investment Officer 44 Jordan S. Ruddy Senior Vice President – Chief Operating Officer 45 Philip Mendlow Senior Vice President – Development Projects 61 Jerold E. Novack Senior Vice President – Chief Financial Officer 52 Michael L. Konig Senior Vice President – General Counsel 48 Patricia S. Anderson Vice President – Property Management 51 Deborah Huet Vice President – Finance 53

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R. Ramin Kamfar, Founder & CEO. Ramin Kamfar is the founder, Chairman and Chief Executive Officer of Bluerock. Mr. Kamfar has over 20 years of experience in various aspects of private equity investing and investment banking, public and private financings, acquisitions, retail operations and real estate. Since 2002, Mr. Kamfar, through Bluerock, has sponsored approximately 4 million square feet of real estate projects. Mr. Kamfar started his career as an investment banker at Lehman Brothers Inc., New York, NY, where he specialized in mergers and acquisitions, corporate finance and private placements. From 1993 to 2002, Mr. Kamfar grew a company he founded from a startup to become a leading fast casual restaurant chain in the United States primarily through a series of acquisitions, turnarounds and the consolidation of several operating companies, to create New World Restaurant Group, Inc. (now known as Einstein Noah Restaurant Group, Inc. (NASDAQ: BAGL), with approximately 800 locations and $400 million in gross revenues in 35 states and Washington, D.C. and a portfolio of brands which included Einstein Bros.® and Noah’s NY Bagels®. During this period, Mr. Kamfar served primarily as Chief Executive Officer and Chairman of the Board of the company. From 1999 to 2002, Mr. Kamfar served as an investor, advisor and member of the Board of Directors of Vsource, Inc., a technology company. Mr. Kamfar has an M.B.A. degree with distinction in Finance from The Wharton School of the University of Pennsylvania, and a B.S. degree with distinction in Finance from the University of Maryland.

James G. Babb, III – Managing Director & Chief Investment Officer. James Babb serves as Managing Director, Chief Investment Officer for Bluerock and its affiliates. Mr. Babb is a twenty-year veteran of the real estate profession who was a partner and early member of Starwood Capital Group LLC (“Starwood”), one of the leading private real estate investment companies in the United States that has invested more than $2.5 billion of private and institutional capital in over $10 billion of transactions involving real estate and related assets. During Mr. Babb’s thirteen-year tenure with Starwood, its investment funds and co-investments realized average annual compounded rates of return in excess of 25%, or more than $5 billion of profit for its limited partners. Starwood, founded in 1991, is a pioneer in opportunistic real estate investment, having sponsored some of the best known and most successful real estate ventures of the past fifteen years. Starwood builds operating companies around its core real estate portfolios and is best known for creating three of the leading public real estate companies including the recapitalization, reorganization and expansion of a Paired Share REIT in 1995 to become Starwood Hotels & Resorts Worldwide, Inc. (NYSE: “HOT”), a leading global owner/operator of hotels with brands such as Sheraton, Westin, the St. Regis Luxury Collection and “W”; creating the private real estate mezzanine debt market and subsequently contributing a large originated mezzanine debt portfolio to create iStar Financial, Inc. (NYSE: “SFI”), the largest publicly owned finance company focused exclusively on commercial real estate; and co-sponsoring Equity Residential Properties Trust (NYSE: “EQR”), the nation’s leading multifamily REIT. During his tenure with Starwood, Mr. Babb was one the firm’s principal investment managers responsible for structuring over 75 investment transactions. Mr. Babb has committed and managed more than $550 million of equity in transactions totaling $2.5 billion of asset value. In the aggregate, Mr. Babb was involved as the lead manager or member of the investment team that transacted investments comprising over 400 individual properties, including 11,000 apartment units and condominiums, 13 million square feet of office and industrial space, 1,335 hotel rooms, and 10,000 single-family lots located in 25 states and 7 foreign countries. The investments were diverse in geography, investment type and structure, and included joint ventures, operating companies, single assets, portfolios, convertible preferred stock, mortgage loans, commercial mortgage backed securities and tax-exempt bond financings. In addition to Mr. Babb’s investment experience, he was responsible for the generation of new investment opportunities and the identification of operating partners. Through Mr. Babb’s investment experience, he has made principal investments in most major United States and Western European property markets and as a result has acquired extensive industry relationships throughout the United States and Western Europe. These relationships and the local market expertise he has acquired provide him with the access to a high volume of superior transactional deal flow. Mr. Babb received a B.A. degree in Economics from the University of North Carolina at Chapel Hill.

Jordan S. Ruddy, Senior Vice President – Chief Operating Officer. Jordan Ruddy serves as Senior Vice President – Chief Operating Officer, for Bluerock and its affiliates. Mr. Ruddy has over 15 years of experience in real estate acquisitions, financings, management and dispositions. From 1995 to 1997, and from 2000 to 2001, Mr. Ruddy served as an investment banker at Smith Barney Inc., and Banc of America Securities, respectively, where he was responsible for various types of real estate investment banking transactions including equity offerings, debt placements and asset sales. From 1997 to 2000, Mr. Ruddy served as Vice President of Amerimar Enterprises, a real estate company specializing in value-added investments nationwide, where he managed acquisitions, financings, leasing, asset management and dispositions involving over 1.5 million square feet of commercial and multi-family real estate. From 1988 to 1993, Mr. Ruddy was a Second Vice President at The Chase Manhattan Bank where he

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marketed real estate loans and managed a $200 million loan portfolio. Mr. Ruddy received an M.B.A. degree in Finance and Real Estate from The Wharton School of the University of Pennsylvania, and a B.S. degree with high honors in Economics from the London School of Economics.

Philip Mendlow, Senior Vice President – Development Projects. Philip Mendlow serves as Senior Vice President – Development Projects of Bluerock and its affiliates. Mr. Mendlow has been an active real estate investor and builder since 1979 in projects ranging from condominium conversion of rental housing to the planning and construction of suburban planned unit development. Mr. Mendlow’s efforts have included both the renovation and repositioning of existing properties and new construction of infill and high-rise apartment buildings. As principal in charge of projects comprising more than 700 dwelling units with a market valuation in excess of $350 million dollars, Mr. Mendlow has gained operative knowledge and extensive experience in all aspects of real estate development, including development property identification and assessment, zoning and planning evaluation, supervision of the approval process for both as-of-right and non-conforming uses, product mix and market positioning, unit layout and design, architectural design, cost/value analysis, construction estimating, construction management and critical path planning, labor union negotiation, supervision and coordination of trades, acquisition, construction and take-out financing, on-site sales office management and training, creation and implementation of condominium legal documentation, post-closing quality and customer satisfaction assurance, and negotiation of commercial leases. Mr. Mendlow attended Yale University, New York University, and Rockefeller University, receiving a B.A. degree summa cum laude in physiological psychology.

Jerold E. Novack, Senior Vice President – Chief Financial Officer. Mr. Novack serves as a Senior Vice President – Chief Financial Officer of Bluerock and its affiliates. Mr. Novack brings to Bluerock over 25 years of experience in public and private financings, operations and management. From 1993 to 2002, Mr. Novack served in senior financial positions, including as Executive Vice President and Chief Financial Officer of New World Restaurant Group, Inc., a company he helped grow from five stores to become a leading fast casual restaurant chain in the United States with approximately 800 stores and $400 million in revenues in 34 states and Washington, D.C. with a portfolio of brands which included Einstein Bros. and Noah’s NY Bagels. From 1982 to 1993, Mr. Novack held various senior financial positions at several specialty retail chains, including Mercantile Department Stores and Brooks Fashion Stores. Mr. Novack has a B.S. degree in Accounting from Brooklyn College, City University of New York.

Michael L. Konig, Senior Vice President and General Counsel. Mr. Konig serves as the Senior Vice President and General Counsel for Bluerock and its affiliates. Mr. Konig has also served as counsel for Bluerock and its affiliates since December 2004. Mr. Konig has over 20 years of experience in law and business. From 1987 to 1997, Mr. Konig was an attorney at the firms of Greenbaum Rowe Smith & Davis and Ravin Sarasohn Cook Baumgarten Fisch & Baime, representing borrowers and lenders in numerous financing transactions, primarily involving real estate, distressed real estate and Chapter 11 reorganizations, as well with respect to a broad variety of litigation and corporate law matters. From 1998 to 2002, Mr. Konig served as legal counsel, including as General Counsel, at New World Restaurant Group, Inc. (now known as Einstein Noah Restaurant Group, Inc. (NASDAQ: BAGL)). From 2002 to December 2004, Mr. Konig served as Senior Vice President of Roma Food Enterprises, Inc. where he led operations and the restructuring and sale of the privately held company with approximately $300 million in annual revenues. Mr. Konig received a J.D. cum laude in 1987 from California Western School of Law and a M.B.A. in Finance in 1988 from San Diego State University.

Patricia S. Anderson, Vice President – Property Management. Patricia Anderson serves as Vice President – Property Management for Bluerock and its affiliates. Ms. Anderson has over 21 years of experience in real estate, including the managing and marketing of commercial properties, as well as high-rise and conventional multi-family properties. Ms. Anderson is accredited as a certified apartment manager, a licensed realtor, and is on the Board of Governors for the Metro Detroit Property Management Council. Since 1983, Ms. Anderson has had the responsibility of analyzing underperforming assets, developing and implementing plans for improvements, auditing property financial and management operations, and coordinating all site-related activity between the marketing, development and construction departments for both new developments and condominium conversions. From 2001 to 2003, Ms. Anderson served as Regional Vice President of Sterling Management Ltd., and was responsible for the oversight and supervision of District Managers for a portfolio of up to 2,200 conventional and high rise condominium multi-family units and 3,500 self-storage facility units in Michigan and Indiana. Prior to joining Sterling, Ms. Anderson was employed by CED Concord as a District Manager with responsibility for the oversight

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of multifamily assets in four states. Ms. Anderson received a B.S. degree in Business Administration from Michigan Technological University.

Deborah Huet, Vice President – Finance. Deborah Huet serves as Vice President – Finance for Bluerock and its affiliates. Ms. Huet has 30 years of varied accounting experience, including 15 years in commercial, industrial and residential real estate. From 2002 to 2006, Ms. Huet served as Corporate Controller for Ivanhoe Huntley Holding, LLC a large Michigan residential developer where she was responsible for financial and administrative operations for the company. Prior to 2002, Ms. Huet worked as a Certified Public Accountant at Boyes, Wright, Pittman and Company in Farmington Hills, an accounting firm focused on small to mid-sized businesses throughout the United States. From 1987 to 1997 Ms. Huet served as Corporate Controller for American Realty Corporation, where she was responsible for the day to day administration and accounting operations for a portfolio consisting of 30 real estate entities in southeastern Michigan. Ms. Huet received her B.A. with distinction in accounting from the University of Michigan, and a Master’s in Finance degree from Walsh College. Ms. Huet is a member of the Beta Gamma Sigma Society, the Michigan Association of Certified Public Accountants, and the American Institute of Certified Public Accountants.

COMPENSATION AND FEES The following is a description of compensation and fees that may be received by Bluerock and/or its affiliates in connection with or resulting from this Offering. These arrangements have been established by Bluerock and are not the result of arm’s-length negotiations. Form of Compensation and Recipient Amount of Compensation Organizational costs and offering expenses: Bluerock will receive 1.75% of the Gross Proceeds to cover the

Organizational Costs and Offering Expenses incurred by Bluerock and advanced on behalf of the Trust in this Offering. Bluerock will be responsible for all Organizational Costs and Offering Expenses, but will be entitled to retain any unused portion of the fee on a nonaccountable basis. Based on this estimation, Bluerock will receive $437,500 if the Maximum Offering Amount is sold, and $612,500 if the increased Maximum Offering Amount is sold.

Dealer-Manager Fee:

Individuals who are Affiliates of the Trust (including external and internal wholesalers of Bluerock) may earn and be entitled to a portion of the Dealer-Manager Fee.

Potential Profits and Fees: Bluerock is the sole member of the Trust and therefore may be

entitled to receive or retain profits (i) from operations so long as the Trust is current on its obligations under the Secured Debentures, and/or (ii) upon liquidation or dissolution, after the Secured Debentures have been paid in full. In addition, Bluerock or its affiliates may earn fees, profits or other compensation from real estate transactions for which Bluerock may act as a sponsor, or in which it or its affiliates may own equity, and which have been financed in whole or in part with Qualified Loans from the net proceeds of this Offering.

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WHO MAY INVEST The offer and sale of the Secured Debentures is being made in reliance on an exemption from the registration requirements of the Securities Act. Accordingly, distribution of the Memorandum is strictly limited to persons who meet the requirements and make the representations set forth below. The Trust reserves the right to reject the subscription of any prospective purchaser of the Secured Debentures based upon any information which may become known or available to the Trust concerning the suitability of such prospective investor, for any other reason or for no reason, in the Trust’s sole discretion. The Secured Debentures are speculative, involve a significant risk, and are suitable only for persons of substantial financial means who have no need for liquidity in this investment. Secured Debentures will be sold only to prospective Investors who:

• purchase a minimum of $50,000 in principal amount of Secured Debentures unless the Trust, in its sole discretion, waives the minimum purchase requirement;

• represent in writing that they are “Accredited Investors” (as defined by Rule 501 of Regulation D under the Securities Act); and

• satisfy the investor suitability requirements established by the Trust and as may be required under federal or state law.

Each prospective Investor must represent in writing that he meets, among others, ALL of the following requirements:

(1) He has received, read and fully understands this Memorandum, he is basing his decision to invest on this Memorandum, he has relied on the information contained in this Memorandum, and he has not relied upon any representations made by any other person;

(2) He understands that an investment in the Secured Debentures involves significant risks and he is

fully cognizant of, and understands, all of the risk factors relating to an investment in the Secured Debentures, including, without limitation, those risks set forth in the section of this Memorandum entitled “Risk Factors;”

(3) His overall commitment to investments that are not readily marketable is not disproportionate to

his individual net worth, and his investment in the Secured Debentures will not cause such overall commitment to become excessive;

(4) He has adequate means of providing for his financial requirements, both current and anticipated,

and has no need for liquidity in this investment; (5) He can bear, and is willing to accept, the economic risk of losing his entire investment in the

Interests; (6) He is acquiring a Secured Debenture for his own account and for investment purposes only and

has no present intention, agreement or arrangement for the distribution, transfer, assignment, resale or subdivision of the Secured Debenture; and

(7) He is an Accredited Investor as defined in Rule 501 of Regulation D under the Securities Act.

In addition to certain institutional investors, a prospective Investor who meets one of the following tests will qualify as an “Accredited Investor:”

(1) the prospective Investor is a natural person who had individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse in excess of $300,000

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in each of these years, and has a reasonable expectation of reaching the same income level in the current year;

(2) the prospective Investor is a natural person whose individual net worth, or joint net worth with that

person’s spouse, exceeds $1,000,000 at the time of his investment in the Interests; (3) the prospective Investor is an organization described under Section 501(c)(3) of the Code, a

corporation, Massachusetts or similar business trust, or a partnership not formed for the specific purpose of acquiring the Secured Debentures, with total assets in excess of $5,000,000;

(4) the prospective Investor is an entity (including an IRA) in which all of the equity owners are

Accredited Investors as defined in subparagraphs (1) and (2) above; (5) the prospective Investor is a trust with total assets in excess of $5,000,000, not formed for the

specific purpose of acquiring the Secured Debentures, the purchase of which is directed by a “sophisticated person” as defined in Rule 506(b)(2)(ii) of Regulation D under the Securities Act; or is a revocable trust whose settlor-trustees are all Accredited Investors; or

(6) the prospective Investor is an employee benefit plan within the meaning of the U.S. federal

Employment Rights and Income Security Act, U.S.C. Title 29, Section 18, or ERISA, in which the investment decision is made by a plan fiduciary (as defined in Section 3(21) of ERISA) which is either a bank, savings and loan association, insurance Trust, or registered investment adviser; or the employee benefit plan has total assets in excess of $5,000,000; or it is a self-directed plan in which investment decisions are made solely by persons who are Accredited Investors.

“Net worth” is defined as the difference between total assets and total liabilities, including home, home furnishings and personal automobiles. In the case of fiduciary accounts, the net worth and/or income suitability requirements must be satisfied by the beneficiary of the account, or by the fiduciary, if the fiduciary directly or indirectly provides funds for the purchase of the Secured Debentures.

Representations with respect to the foregoing and certain other matters will be made by each prospective Investor in the Subscription Agreement. The Trust will rely on the accuracy of such representations and may require additional evidence that the prospective Investor satisfies the applicable standards at any time prior to acceptance. Prospective Investors are not obligated to supply any information so requested by the Trust, but the Trust may reject a Subscription Agreement from any prospective Investor who fails to supply any information so requested. Prospective Investors who are unable or unwilling to make the foregoing representations may not purchase the Secured Debentures. The investor suitability requirements stated above represent minimum suitability requirements established by the Trust for prospective Investors. However, satisfaction of these requirements will not necessarily mean that the Secured Debentures are a suitable investment for the prospective Investor, or that the Trust will accept the prospective Investor’s Subscription Agreement. Furthermore, the Trust, as appropriate, may modify such requirements in its sole discretion, and such modifications may raise the suitability requirements for prospective Investors. No person has been authorized by the Trust to make any representations or furnish any information with respect to the Trust or the Secured Debentures other than as set forth in this Memorandum or other documents or information furnished by the Trust upon request as described herein. This Memorandum contains summaries of certain other documents, which summaries are believed to be accurate, but reference is hereby made to the full text of the actual documents for complete information concerning the rights and obligations of the parties thereto. Such information necessarily incorporates significant assumptions, as well as factual matters. All documents relating to this Offering and related documents and agreements, if readily available to the Trust, will be made available to a prospective Investor or its representatives upon request to the Trust. During the course of this Offering and prior to sale, each prospective Investor is invited to ask questions of and obtain additional information from the Trust concerning the terms and conditions of this Offering, the Trust, the Secured Debentures and any other relevant matters, including, but not limited to, additional information necessary or desirable to verify the accuracy of the information set forth in

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this Memorandum. The Trust will provide the information to the extent it possesses such information or can obtain it without unreasonable effort or expense.

This Memorandum constitutes an offer only to the offeree whose name appears in the appropriate space on the cover page. Furthermore, this Memorandum does not constitute an offer or solicitation to anyone in any jurisdiction in which such an offer or solicitation is not authorized. This Memorandum has been prepared solely for the benefit of persons interested in the proposed private placement of the Secured Debentures offered hereby. Any reproduction or distribution of this Memorandum, in whole or in part, or the disclosure of any of its contents without the prior written consent of the Trust is expressly prohibited. The recipient, by accepting delivery of this Memorandum, agrees to return this Memorandum and all documents furnished herewith to the Trust or its representatives immediately upon request if the recipient does not purchase any Secured Debentures, or if this Offering is withdrawn or terminated. The Secured Debentures may not be suitable investments for a qualified plan, an IRA or other tax exempt entity. Each Investor must consult its own advisers before making an investment. If you do not meet the requirements described above, immediately return this Memorandum to the Trust. In the event you do not meet such requirements, this Memorandum does not constitute an offer to sell the Secured Debentures to you. Restrictions Imposed by the USA PATRIOT Act and Related Acts The Secured Debentures may not be offered, sold, transferred or delivered, directly or indirectly, to any “Unacceptable Investor.” “Unacceptable Investor” means any person who is a:

• Person or entity who is a “designated national,” “specially designated national,” “specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist organization,” or “blocked person” within the definitions set forth in the Foreign Assets Control Regulations of the U.S. Treasury Department;

• Person acting on behalf of, or any entity owned or controlled by, any government against whom the U.S. maintains economic sanctions or embargoes under the Regulations of the U.S. Treasury Department;

• Person or entity who is within the scope of Executive Order 13224-Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001; or

• Person or entity subject to additional restrictions imposed by the following statutes or regulations and executive orders issued thereunder: the Trading with the Enemy Act, the Iraq Sanctions Act, the National Emergencies Act, the Antiterrorism and Effective Death Penalty Act of 1996, the International Emergency Economic Powers Act, the United Nations Participation Act, the International Security and Development Cooperation Act, the Nuclear Proliferation Prevention Act of 1994, the Foreign Narcotics Kingpin Designation Act, the Iran and Libya Sanctions Act of 1996, the Cuban Democracy Act, the Cuban Liberty and Democratic Solidarity Act and the Foreign Operation, Export Financing and Related Programs Appropriations Act or any other law of similar import as to any non-U.S. country, as each such act or law has been or may be amended, adjusted, modified or reviewed from time to time.

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PLAN OF DISTRIBUTION The Offering The Trust is offering up to $25,000,000 in aggregate principal amount of Secured Debentures, subject to increase to $35,000,000 in the Trust’s sole and absolute discretion, due December 31, 2013, unless extended to December 31, 2014, to prospective Investors who are Accredited Investors and who meet any additional requirements imposed by the Trust itself. The Secured Debentures will be issued with a minimum purchase of $50,000 and in additional denominations of $1,000; however, the Trust has the right, in its sole discretion, to waive the minimum purchase requirement. Persons desiring to purchase the Secured Debentures should follow the procedure described in “How to Subscribe.”

The Secured Debentures will be offered and sold on a “best efforts” basis by broker-dealers (the “Selling Group”), who are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Orchard Securities, LLC will act as Dealer-Manager for the Offering, and will receive a Dealer-Manager Fee of 1.25% (“Dealer-Manager Fee”) of the gross proceeds of the Offering (“Gross Proceeds”), selling commissions of up to 6.5% of the Gross Proceeds (“Selling Commissions”), and a nonaccountable marketing and due diligence allowance of up to 1.0% of the Gross Proceeds (“Allowances”). The amount of Selling Commissions will be reduced, however, if a lower commission rate is negotiated with a member of the Selling Group. The Dealer-Manager may reallow the Selling Commissions, and up to 1.0% of the Allowances on a nonaccountable basis, to the Selling Group for their sales of Secured Debentures. Of the Dealer-Manager Fee, up to 0.75% of the Gross Proceeds will be reallowed to registered representatives which may be affiliates of Bluerock for marketing costs related to this Offering, including payments to Bluerock’s internal and external wholesalers. The total aggregate amount of the Dealer-Manager Fee, Selling Commissions and Allowances (“Selling Compensation”) will not exceed 8.75% of the Gross Proceeds. The Dealer-Manager may sell Secured Debentures as part of the Selling Group, thereby becoming entitled to Selling Commissions and Allowances.

In addition, the Trust, in its sole discretion, may sell Secured Debentures net of some or all of the Selling Compensation, to persons purchasing through a registered investment adviser or to affiliates and “friends and family” of Bluerock, the Trust and members of the Selling Group, which price could be as low as 90.25% of the purchase price of the Secured Debentures.

The Dealer-Manager Agreement to be entered into by the Trust with the Dealer-Manager and the selling agreements to be entered into by the Dealer-Manager with the members of the Selling Group contain provisions for indemnity from the Trust with respect to liabilities, including certain civil liabilities under the Securities Act, which may arise from the use of this Memorandum in connection with the offering of the Secured Debentures. A successful claim by the Dealer-Manager or members of the Selling Group for indemnification could result in a reduction in the Trust’s assets. In the opinion of the SEC, indemnification for liabilities under the Securities Act is against public policy and therefore unenforceable. Depository Account Pending receipt and acceptance of subscriptions for the Minimum Offering Amount, all subscription payments received for the Secured Debentures will be deposited in escrow in the Depository Account at First Republic Trust Company. Such payments will be deposited no later than the next business day after receipt. If the Minimum Offering Amount has not been received and accepted by September 30, 2009 (which may be extended to December 31, 2009 in the Trust’s sole discretion), none of the Secured Debentures will be sold and the amount paid by the prospective Investors will be promptly returned in full with escrow interest, from the date of deposit of the subscription funds. Prospective Investors whose subscriptions are rejected will not receive any interest on their deposited subscription funds. Upon written instruction by the Trust and the Dealer-Manager and upon obtaining the Minimum Offering Amount, the funds in the Depository Account will be released to the Trust Account, with any interest earned during the escrow period disbursed to the Trust for its benefit. Upon release of the funds to the Trust Account, an initial closing under this Offering will occur, with respect to which Investors shall be entitled to the Debenture rate of interest on their investment from the date of deposit and acceptance of their Subscription Agreement.

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Suitability Requirements for Investors Purchase of the Secured Debentures is suitable only for persons of adequate financial means who have no need for liquidity with respect to this investment. There will not be any public market for the Secured Debentures and they should be considered illiquid. Secured Debentures will be sold only to prospective Investors, or fiduciaries representing them, who represent in writing that they are Accredited Investors under Rule 501(a) of Regulation D as promulgated under the Securities Act and also meet certain standards. Prospective Investors should be aware that the Secured Debentures have not been registered under the Securities Act and therefore cannot be sold or transferred unless they are subsequently registered under the Securities Act or an exemption from such registration is available; accordingly, an Investor must bear the economic risk of the investment in the Secured Debentures for an indefinite time. Under certain very limited circumstances, an Investor may be permitted to transfer Secured Debentures, but then only to persons who meet certain suitability standards, and the Trust will require assurances that such standards are met before agreeing to any transfer of the Secured Debentures. Additionally, the Trust may charge a reasonable administrative fee to effectuate any such transfer or exchange. Documents to be Completed by Investors

Each prospective Investor desiring to subscribe for the Secured Debentures must complete and sign the Subscription Agreement attached to this Memorandum (or separate copy thereof) and return them to the Dealer-Manager as set forth in “How to Subscribe”.

In the Subscription Agreement each prospective Investor will acknowledge, among other things, that he or she: (1) is an Accredited Investor; (2) is purchasing the Secured Debentures for investment only and not with any intention of reselling or distributing all or any portion thereof to others; (3) is able to bear the economic risk of investment in the Secured Debentures; and (4) has provided complete and accurate information to the Trust concerning their status as an Accredited Investor and other relevant data. The Trust plans to review and accept or reject subscriptions as they are received. If the Trust determines to reject a specific Subscription Agreement, such prospective Investor’s subscription documents and subscription funds, without deduction and without interest, shall be immediately returned to such prospective Investor. THE TRUST RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION FOR ANY REASON OR NO REASON. THE TRUST’S ACCEPTANCE OR REJECTION OF ANY SUBSCRIPTION MAY BE MADE AT ANY TIME PRIOR TO OR SIMULTANEOUS TO THE TERMINATION OF THIS OFFERING. Securities Matters The Offering of the Secured Debentures is not a public offering within the meaning of the Securities Act. Accordingly, the Offering has not been, and will not be, registered under the Securities Act and the Trust will rely on the exemptions contained in the Securities Act and Regulation D promulgated thereunder. The Trust will be relying upon the accuracy of each prospective Investor’s warranties, representations, covenants, and agreements contained in the Subscription Agreement. Because the Secured Debentures have not been registered, they will be “restricted securities” as defined in Rule 144 promulgated under the Securities Act. Thus, an Investor must hold Secured Debentures indefinitely and may not transfer them without registration under the Securities Act or the availability of an exemption from registration (in which case the Investor may be required to provide the Trust with a legal opinion, in form and substance satisfactory to the Trust, that registration is not required). Accordingly, an Investor must be willing to bear the economic risk of investment in the Secured Debentures for an indefinite period of time. The Trust does not intend to file a registration statement under the Securities Act to provide for a public resale of the Secured Debentures.

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Risk of Delivery; Delivery by Mail Prospective Investors bear the risk of delivery of all documents and payments, not the Trust. If the U.S. Postal Service is used, it is recommended that insured, registered mail be used and that sufficient number of days be allowed to ensure delivery to the Trust before the applicable expiration date. State Securities Laws The Trust will not offer, sell or issue any Secured Debentures in any jurisdiction where it is unlawful to do so or whose laws, rules, regulations or orders would require the Trust, in its sole discretion, to incur costs, obligations, or time delays disproportionate to the net proceeds to be realized by the Trust from such offers, sales or issuances. Neither this Memorandum nor any Subscription Agreement shall constitute an offer to sell or a solicitation of an offer to purchase any Secured Debentures in any jurisdiction in which such transaction would be unlawful. No Revocation Once a prospective Investor has executed a Subscription Agreement and submitted payment for the purchase price of the Secured Debentures, such subscription may not be revoked without the consent of the Trust.

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DESCRIPTION OF THE SECURED DEBENTURES AND SUMMARY OF THE COLLATERAL AGENCY AGREEMENT

General The Offering by the Trust is limited to $25,000,000 in aggregate principal amount of Secured Debentures, subject to increase to $35,000,000 in the Trust’s sole discretion.

Each Secured Debenture will bear non-compounded interest at the annual rate of 9.0% per annum (computed on the basis of a 365-day year) on its outstanding principal, payable monthly on the fifteenth day of the following month.

The Secured Debentures will be issued with a minimum purchase of $50,000 and in additional denominations of $1,000; however, the Trust has the right, in its sole discretion, to waive the minimum purchase requirement. Unless an Event of Default under the Secured Debentures exists and is continuing and the Investors elect to declare the Secured Debentures due and payable, or the Trust extends the maturity on the Secured Debentures, the Secured Debentures will mature on December 31, 2013, at which time the principal and any accrued but unpaid interest on the Secured Debentures will be paid to the Investor registered in the Debenture Register. The Trust, in its sole discretion, may extend the date of maturity of the Secured Debentures for up to one additional one-year term. The Trust may exercise an extension of the maturity date by notifying the Investors of record on the notice date at any time prior to the maturity date of the Secured Debentures. During the one-year extension, the Secured Debentures will bear non-compounded interest at the annual rate of 10.0% per annum (computed on the basis of a 365-day year) on its outstanding principal, payable monthly on the fifteenth day of the following month.

The Collateral Agency Agreement The Secured Debentures will be issued subject to the Collateral Agency Agreement, a copy of which is attached hereto, which provides for the orderly administration of the Collateral. Collateral for the Secured Debentures The Collateral securing the Trust’s obligations under the Secured Debentures (including payments of interest and repayment of principal) is as follows:

1. Pledge by Bluerock of all Membership Interests in the Trust and the Trust’s Manager;

2. Pledge by the Trust of all of its assets including bank accounts (but excluding the mortgage documents and related security instruments for each Qualified Loan); and

3. Collateral assignment by the Trust of its Loan Collateral received from its borrowers, which at a minimum

shall include (i) the borrower promissory notes, (ii) all first mortgages, (iii) all Mortgagee Title Insurance Policies and (iv) all Loan Documents, as well as a pledge of the borrower promissory note.

The Investors’ secured interest in the Bluerock Collateral and Trust Collateral will be perfected through the filing of UCC-1 financing statements in Delaware. The Investor’s secured interest in the borrower’s promissory note for each Qualified Loan will be perfected through the filing of a UCC-1 in the state of the borrower’s residence, and the collateral assignment of the Loan Collateral will be recorded in the jurisdiction of the property securing the Qualifying Loan. The Loan Collateral, the Trust Collateral and the Bluerock Collateral are collectively referred to in this Memorandum as the Collateral, and the pledge and security agreements and other documents evidencing the Investors’ secured interest in the Collateral are collectively referred to in this Memorandum as the “Security Documents.” The Collateral will be physically segregated from the Trust and held by the Collateral Agent, to allow Investors through the Collateral Agent to directly foreclose upon any or all of the Collateral upon the occurrence of a Triggering Event. Mick & Associates, P.C., LLO will be the initial Collateral Agent under the Collateral Agency Agreement.

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Independent Monitoring of the Collateral The Trust will also engage Mick & Associates, P.C., LLO (in such capacity, the “Monitor”) to provide certain investment monitoring services under a Monitoring Services Engagement Letter (the “Monitoring Agreement”). Pursuant to the Monitoring Agreement, the Monitor will have direct access to relevant information from and with respect to the Trust, the Qualified Loans and the Collateral, about which the Monitor may communicate directly with Investors and the Selling Group to keep them independently apprised of the status of same. Bluerock believes the Monitoring Agreement will provide transparency to the Trust and its business and enhance the Collateral Agent’s ability to discover, and deal proactively with the Company to cure, any Event of Default to the benefit of Investors. Mick & Associates, P.C., LLO Mick & Associates, P.C., LLO is an independent law firm that is a recognized leader in due diligence examinations of a variety of public and private placement offerings. The firm’s address is 11422 Miracle Hills Drive, Suite 401, Omaha, NE 68154. Events of Default and Default Interest Events of default under each of the Secured Debentures (each, an “Event of Default”) include:

1. a failure to pay interest when due, if such default continues for 30 days after the applicable interest payment date;

2. a failure to repay principal at the maturity date or by declaration of acceleration, notice of redemption or

otherwise, as applicable;

3. an event of bankruptcy with respect to the Trust; or

4. a breach by the Trust in any material respect, after applicable grace periods, if any, of (a) the Collateral Agency Agreement, (b) any Secured Debenture, (c) any Security Documents, or (d) the “single purpose entity” provisions of its Limited Liability Company Operating Agreement.

Further, each of the Secured Debentures is cross-defaulted with the other Secured Debentures. Upon the occurrence of an Event of Default, the Secured Debentures will thereupon (until cured, if curable) accrue interest at a default rate, 2.0% in excess of the then-current interest rate on the Secured Debentures; provided however, any such Event of Default may be waived by Investors holding, in the aggregate, a majority of the then outstanding principal amount of the Secured Debentures (excluding Secured Debentures held by affiliates of the Trust), and any such waiver will bind all Investors. If an Event of Default occurs and is continuing and has not been waived, the Collateral Agent, and at the direction of Investors holding, in the aggregate, more than 33.33% of the then outstanding principal amount of the Secured Debentures (excluding any Secured Debentures held by affiliates of the Trust), shall declare the unpaid principal amount of the outstanding Secured Debentures together with any accrued interest thereon to be due and payable immediately by notice in writing to the Trust, the Collateral Agent and the Investors, as applicable, specifying the Event of Default and that it is a notice of acceleration. Triggering Event; Remedies Against the Collateral A Triggering Event shall occur upon:

1. the occurrence and continuing existence of an Event of Default, and

2. an affirmative vote by Investors holding, in the aggregate, more than one-third (33.33%) of the then outstanding principal amount of the Secured Debentures (excluding any Secured Debentures held by

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affiliates of the Trust), giving the Collateral Agent written notice of their intention to instruct the Collateral Agent to exercise the Investors’ rights and remedies under the Security Documents.

As soon as practicable after the occurrence of an Event of Default, the Collateral Agent shall cause a notice to be issued to Investors seeking their vote whether to declare that a Triggering Event has occurred and, if not, may in its discretion cause the issuance of similar notices, but only during the pendency of an Event of Default and not more frequently than every 90 days. After any Triggering Event, the Investors holding, in the aggregate, more than 50% of the then outstanding principal amount of the Secured Debentures (excluding Secured Debentures held by affiliates of the Trust) (the “Required Creditors”) may, by giving the Collateral Agent written notice of such election, instruct the Collateral Agent to exercise the Investors’ rights and remedies under the Collateral Agency Agreement, any Secured Debenture or any Security Document. The Collateral Agent is required to follow the Required Creditors’ instructions with respect to the enforcement action to be taken.

Collateral Agent’s Authority and Duties

Under the Collateral Agency Agreement, the Collateral Agent is authorized to act as each Investor’s representative with respect to the enforcement of their respective interests in the Collateral. The Collateral Agent will also act as agent for the benefit of certain investors (“Additional Creditors”) to whom the Trust may become obligated and who become party to the Collateral Agency Agreement. Any additional secured debt issued to such Additional Creditors may be pari passu with, but not senior to, the Secured Debentures. The Collateral Agency Agreement also governs the Investors’ respective rights, along with any additional pari passu creditors, if any, with respect to amounts recovered after a Triggering Event. The outstanding principal amount of obligations held by additional pari passu creditors will be included in calculating the required thresholds for action by the creditors under the Collateral Agency Agreement. After the occurrence of a Triggering Event, the Collateral Agent shall exercise commercially reasonable efforts to secure and enforce the Investors’ rights in and to the Collateral, but shall take instructions on specific matters from the Required Creditors (the “Required Action”). In the event that the Collateral Agent seeks direction or authority as to a particular matter, it may seek a vote for Required Action. Notwithstanding the foregoing, the Collateral Agent shall establish an interest-bearing Cash Collateral Account, and the Collateral Agent and the Investors shall deposit the following amounts into it:

• any proceeds of any collection, recovery, receipt, appropriation, realization or sale of any or all of the Collateral or the enforcement of any Secured Debenture or any Security Document;

• any amounts held in the Cash Collateral Account at the time a Triggering Event occurs; and

• any payments received or otherwise realized by any Investor in respect of amounts due from the Trust on or after the date on which a Triggering Event has occurred.

Promptly after the deposit of any amount into the Cash Collateral Account, the Collateral Agent will distribute such amount to the Investors, including, as applicable, any other creditors of the Trust whose indebtedness is secured by the Collateral, on a pro rata basis in proportion to amounts due from the Trust and in accordance with the following priorities:

1. to the reasonable costs and expenses of the Collateral Agent incurred in connection with the maintenance of the Cash Collateral Account and any collection, recovery, receipt, appropriation, legal proceeding (whether by or against any such party), realization or sale of any or all of the Collateral or the enforcement of any Secured Debenture or any Security Document;

2. after payment in full of all amounts set forth in 1), to the Investors in payment of any and all amounts owed to the Investors for reimbursement of amounts paid by them to the Collateral Agent as indemnification for liabilities incurred by them in performing its/their duties under the Collateral Agency Agreement;

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3. after payment in full of all amounts set forth in 2), to the payment and permanent reduction of the principal amount of the Secured Debentures, pro rata, based on the proportion that the principal amount of such outstanding Secured Debentures held by each Investor at such time bears to the sum of the principal amount of all Secured Debentures;

4. after payment in full of all amounts set forth in 3), to the payment and permanent reduction of the amount of the outstanding Secured Debentures representing interest, pro rata, based on the proportion that such outstanding Secured Debentures representing interest held by each Investor at such time bears to the sum of all Secured Debentures representing interest; and

5. after payment in full of all amounts set forth in 4), to or at the direction of the Trust or as a court of competent jurisdiction may otherwise direct.

In order for the Collateral Agent to carry out its duties under the Collateral Agency Agreement, each Investor, upon request, shall be obligated to notify them of the aggregate amount of its respective amount then owing such Investor and such other information as the Collateral Agent may reasonably request.

The Collateral Agent will not be liable for or by reason of any failure or defect in the registration, filing or recording of any of the Security Documents or any failure to do any act necessary to constitute, perfect and maintain the priority of any security interest in the Collateral or for the Trust’s use of proceeds from the sale of the Secured Debentures, except as results from the Collateral Agent’s own fraud, gross negligence or willful misconduct

Furthermore, under the Collateral Agency Agreement, the Trust agrees to pay and save the Collateral Agent harmless from liability for payment of all costs and expenses of the Collateral Agent in connection with the Collateral Agency Agreement and the Security Documents, other than liabilities, costs and expenses resulting from the Collateral Agent's fraud, gross negligence, willful misconduct or breach of the express terms of the Collateral Agency Agreement. Additionally, through the Collateral Agency Agreement, each Investor severally agrees to indemnify the Collateral Agent, pro rata, to the extent the Collateral Agent shall not have been reimbursed by or on behalf of the Trust or from proceeds of the Collateral or otherwise, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, reasonable expenses (including, without limitation, reasonable counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent in performing its duties hereunder or under the Secured Debentures or the Security Documents in its capacity as the Collateral Agent in any way relating to or arising out of the Collateral Agency Agreement, the Secured Debentures, the Security Documents and/or the Collateral, except as results from the Collateral Agent's fraud, gross negligence, willful misconduct or breach of the express terms of the Collateral Agency Agreement. Trust Account Upon attaining the Minimum Offering Amount for the Offering, the Trust will deposit all Gross Proceeds received by it or the Escrow Agent into the Trust Account established for the benefit of the Investors. The Trust will only withdraw and disburse funds from the Trust Account for the purposes of:

• funding and servicing the Qualified Loans;

• the application of the Gross Proceeds as described herein;

• expenditures as permitted under the Limited Liability Company Operating Agreement of the Trust;

• making payments of interest and principal to the holders of the Secured Debentures, as and when due, whether as scheduled or due to acceleration; provided, that the Trust may disburse funds to a separate interest account to facilitate such payments; and

• distributions of Trust profits to Bluerock.

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Unless and until the Collateral Agent provides notice to the Trust that a Triggering Event has occurred, the Trust shall have the right to access the Trust Account, including the rights of deposit, withdrawal and disbursement discussed above. Upon notice of a Triggering Event, the Trust will have no right to access the Trust Account without the prior written consent of the Collateral Agent. Any and all interest earned on amounts held in the Trust Account pending disbursement shall be retained by the Trust in the Trust Account.

Transfer and Exchange of the Secured Debentures Generally, the Secured Debentures will be non-transferable except in very limited circumstances and in the sole and absolute discretion of the Trust. If a transfer is permitted by the Trust, the transfer of the Secured Debentures may be effected only by the registered owner thereof, at the Trust’s principal executive office in New York, New York. Substantial restrictions apply to the transfer of the Secured Debentures. The Secured Debentures have not been registered under the Securities Act, and therefore, cannot be sold or transferred unless they are subsequently registered under the Securities Act or an exemption from such registration is available. An Investor may, under certain circumstances, be permitted to transfer the Secured Debentures, but only to persons who meet certain suitability standards and the Trust may require assurances that such standards are met before agreeing to any transfer of the Secured Debentures. Additionally, the Trust may charge a reasonable administrative fee to effectuate any such transfer or exchange. Debenture Register The Secured Debentures will be issued and evidenced by the Debenture Register and will be held in “book-entry” on the Debenture Register by the Trust. Physical certificates of the Secured Debentures will only be issued to Investors upon written request.

Liquidation Option During each year, Investors, or their representatives, may submit to the Trust in writing, within 90 days from the end of the calendar year, a request for liquidation of their Secured Debentures at the following liquidation price (expressed as percentages of outstanding principal amount), plus accrued interest to the liquidation date:

Year Percentage

2010 94% 2011 96%

2012 98% 2013 100% 2014* 100%

* assumes that the Trust exercises its extension option.

No more than 5.0% of the Gross Proceeds may be liquidated in any one year, provided, however, that the Trust may elect to honor liquidation requests in excess of 5.0% in its sole and absolute discretion. If Investors request liquidation of more than 5.0% of the Gross Proceeds in any one year, and the Trust has elected not to honor the full amount of the liquidation requests in excess of 5.0%, the liquidation amount will be paid to such Investors in the order the liquidation requests were received by the Trust, based on the date of postmark, or, if similar postmarks, the date of initial investment in the Secured Debentures, until an amount equal to 5.0% of the Gross Proceeds, or such other amount in excess of 5.0% that the Trust has elected to honor, has been liquidated. An Investor’s investment in Secured Debentures may not be liquidated in part.

Notwithstanding anything to the contrary above, there is no right of liquidation of the Secured Debentures, except in the event of: (1) an Investor’s death or debilitating disability and (2) the Trust’s consent to do so, in its sole and absolute discretion.

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General Redemption Rights The Secured Debentures may be redeemed by the Trust, in its sole and absolute discretion, in whole or in part, at any time upon at least 30 days notice to the Investors after December 31, 2010. If less than all the Secured Debentures are to be redeemed, the Secured Debentures will be redeemed on a pro rata basis. Secured Debentures called for redemption become due and payable on the redemption date at an amount equal to the outstanding principal amount thereof plus accrued but unpaid interest, or if less than all of the Secured Debentures are being redeemed, the pro rata portion thereof. Financial Reports The Trust shall provide Investors with statements of their accounts on a quarterly basis detailing their interest earned during the prior quarterly period and the then outstanding principal balance of the Secured Debentures. The Trust shall also provide an unaudited, annual financial statement of the Trust (within 120 days from the end of the calendar year) at the request of the Investor or their financial advisor. Investors will also be sent an IRS form 1099-INT within 30 days of the end of each calendar year.

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MATERIAL FEDERAL INCOME TAX ASPECTS The following discussion is a general summary of the federal income tax matters of general application relating to an investment in the Secured Debentures. There can be no assurance that the Internal Revenue Service (the “Service”) will take a similar view as to any of the tax consequences described below. The discussion is based upon current provisions of the Internal Revenue Code of 1986 as amended (the “Code”), existing Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all of which are subject to change. The discussion does not purport to describe all aspects of federal income taxation that may be relevant to an investor in the Secured Debentures in light of the investor’s particular tax status and other income, deductions and credits and does not discuss any state, local or foreign tax matters. Moreover, certain investors (including insurance companies and foreign persons) may be subject to special rules not discussed below. THE TRUST IS NOT PROVIDING TAX COUNSEL OR ADVICE TO A PROSPECTIVE INVESTOR AND AS SUCH NO REPRESENTATION OR WARRANTIES ARE BEING MADE REGARDING THE APPROPRIATENESS OF SUCH INVESTMENT BY A PROSPECTIVE INVESTOR. EACH PROSPECTIVE INVESTOR IN THE SECURED DEBENTURES IS STRONGLY URGED TO REVIEW THE MATERIAL AND TO DISCUSS WITH HIS TAX ADVISOR THE TAX CONSEQUENCES TO HIM OF AN INVESTMENT IN THE SECURED DEBENTURES. TREASURY DEPARTMENT CIRCULAR 230 NOTICE. TO ENSURE COMPLIANCE WITH CIRCULAR 230, PROSPECTIVE INVESTORS ARE HEREBY NOTIFIED THAT: ANY DISCUSSION OF FEDERAL TAX ISSUES CONTAINED OR REFERENCED IN THIS MEMORANDUM IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY PROSPECTIVE INVESTORS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON THEM UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”); SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION AND MARKETING BY THE TRUST OF THE TRANSACTIONS OR MATTERS ADDRESSED IN THIS MEMORANDUM; AND PROSPECTIVE INVESTORS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR. Stated Interest The Secured Debentures will be taxable obligations under the Code, and interest paid or accrued will be taxable to non-exempt holders of the Secured Debentures. An Investor must report stated interest earned on a Secured Debenture as ordinary income in accordance with such Investor’s method of tax accounting. Investors reporting their income on a cash basis must include such interest in their gross income in the taxable year in which it is received, either actually or constructively, whereas accrual basis Investors must include such interest in their gross income in the taxable year in which it is earned. Classification of Secured Debentures The Trust will treat the Secured Debentures as valid indebtedness of the Trust for the United States federal income tax purposes. The determination of whether the Secured Debentures should be treated as debt or equity for United States federal income tax purposes requires application of various factors to applicable law. The Trust has not received any legal opinion that classification of the Secured Debentures as debt is permissible. If it were determined that the Secured Debentures should be treated for federal income tax purposes as an equity investment in the Trust instead of as a debt instrument issued by the Trust, the changes in the tax consequences to holders of the Secured Debentures might be significant and adverse. If the Secured Debentures were treated as equity for the tax purposes, Investors would be taxed as partners of the Trust. The tax treatment of partners is substantially different than the tax treatment of lenders to a partnership. A partner is required to report on his income tax return his distributive share of a partnership’s income, gain, loss, deduction or credit (and items of tax preference), regardless of whether any actual distribution is made to that partner during his taxable year. If Investors

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were treated as partners, their distributive share of taxable income might be different in amount and character than the interest income on the Secured Debentures. Purchase of Secured Debentures by Exempt Plans and Other Exempt Organizations Generally, organizations described in Section 401(a) of the Code (trusts forming part of a stock bonus, pension or profit sharing plan) and Section 501(c) of the Code, individual retirement accounts and individual retirement trusts are exempt from federal income tax (collectively, “Exempt Organizations”). However, this exemption does not apply where “unrelated business taxable income” is derived by the Exempt Organizations from the conduct of any trade or business that is not substantially related to the exempt function of the entity. If an Exempt Organization receives unrelated business taxable income, the Exempt Organization will be subject to a tax imposed by Section 511 of the Code as well as alternative minimum tax on the unrelated business taxable income portion of its income. Generally, interest, dividends, royalties and certain other income are excluded from the definition of unrelated business taxable income (“Excluded Income”). Thus, generally, an Exempt Organization that invests in the Secured Debentures should not be taxed on amounts received as interest or prepayment of principal as a result of its investment. However, if Excluded Income constitutes “unrelated debt-financed income”, then such income would not be excluded from the computation of unrelated business taxable income. For this purpose, a percentage of the gross income attributable to property (such as the Secured Debentures) with “acquisition indebtedness” will be treated as unrelated business taxable income, generally, in proportion to the ratio of such indebtedness to the basis of the property. Generally, “acquisition indebtedness” is indebtedness incurred to acquire property. Therefore, if an Exempt Organization borrows funds to acquire or hold the Secured Debentures, the interest received on such Secured Debentures may be reclassified as unrelated business taxable income.

ERISA CONSIDERATIONS

ERISA, the Code and the interpretive authorities issued by the Department of Labor and the IRS govern the investment of the assets of certain retirement plans in the Trust. This body of law contains certain provisions that should be considered by “benefit plan investors” and their legal advisors. The term “benefit plan investors” includes a tax-qualified pension, profit-sharing or other retirement plan (whether or not subject to ERISA), a bank-maintained fund for the collective investment of such plans, a governmental pension or retirement plan, an HR-10 (Keogh) plan, a simplified employee pension (SEP) and IRAs. Persons who exercise discretion or control of assets of a benefit plan investor that is subject to ERISA are deemed to be fiduciaries under ERISA. In addition, certain unique tax considerations apply to investments in the Trust by benefit plan investors. Fiduciaries Under ERISA Fiduciaries considering the purchase of Secured Debentures on behalf of benefit plan investors should consider their basic fiduciary duties under Section 404 of ERISA. That section requires fiduciaries to manage plan assets solely in the interest of plan participants and to discharge their investment responsibilities prudently. Section 404(c) of ERISA also requires fiduciaries to act in accordance with the documents governing the plan. Thus, fiduciaries of benefit plan investors must give appropriate consideration to, among other things, the role than an investment in the Secured Debentures plays in the benefit plan investor’s investment portfolio. In analyzing the prudence of an investment in the Secured Debentures, special attention should be given to ERISA regulations relating to the prudence standard applicable to the investment of plan assets. The plan fiduciary’s analysis suggested in these regulations includes, among other things, a determination that the investment is designed reasonably to further the benefit plan investor’s purpose, and an examination of (i) risk and return factors, (ii) the composition of the portfolio with regard to diversification, (iii) the liquidity and current return of the portfolio relative to anticipated cash flow needs of the plan, and (iv) the projected return of the portfolio relative to the plan’s funding objectives. Each fiduciary of a benefit plan investor must consider carefully whether, in light of the benefit plan investor’s overall investment portfolio, the risks inherent in an investment in the Secured Debentures are consistent with Section 404 of ERISA. The Trust has no responsibility for determining whether a purchase of Secured Debentures

43

is a prudent investment for any benefit plan investor. Additionally, acceptance of subscriptions on behalf of benefit plan investors is in no respect a representation by the Trust that the investment satisfies all relevant legal requirements with respect to investments by any particular benefit plan investor. Prohibited Transactions ERISA provides that the Secured Debentures may not be purchased by a qualified plan if the Trust, the Manager, Bluerock or any of their affiliates is a fiduciary or party in interest (as defined in Sections 3(21) and 3(14) of ERISA) to the plan unless such purchase is exempt from the prohibited transaction provisions of Section 406 of ERISA. Under ERISA, it is the responsibility of the fiduciary responsible for purchasing the Secured Debentures not to engage in such transactions. Section 4975 of the Code has similar restrictions applicable to transactions between disqualified persons and qualified plans or individual retirement accounts, which could result in the imposition of excise taxes on the Trust, unless and until such a prohibited transaction is corrected. In the case of an IRA, if the Trust, the Manager, Bluerock or any of their affiliates is a disqualified person with respect to the IRA, the purchase of the Secured Debentures by the IRA could instead cause the entire value of the IRA to be taxable to the IRA sponsor. Section 406 of ERISA and Code Section 4975 also prohibit qualified plans from engaging in certain transactions with specified parties involving Plan Assets. Code Section 4975 also prevents IRAs from engaging in such transactions. One of the transactions prohibited is the furnishing of services between a plan and a “party in interest” or a “disqualified person.” Included in the definition of “party in interest” under Section 3(14) of ERISA and the definition of “disqualified person” in Code Section 4975(e)(2) are “persons providing services to the plan.” If the Trust, the Manager, Bluerock or certain entities and individuals related to them have previously provided services to a benefit plan investor, then the Trust, the Manager, or Bluerock could be characterized as a “party in interest” under ERISA and/or a “disqualified person” under the Code with respect to such benefit plan investor. If such a relationship exists, it could be argued that the affiliate of the Trust, the Manager or Bluerock is being compensated directly out of Plan Assets for the provision of services, i.e., establishment of the Offering and making it available as an investment to the qualified plan. If this were the case, absent a specific exemption applicable to the transaction, a prohibited transaction could be determined to have occurred between the qualified plan and the affiliate of the Trust, the Manager or Bluerock. Another type of transaction prohibited by ERISA and the Code is one in which fiduciaries of a qualified plan or the person who establishes an individual retirement account engage in self-dealing or in co-investment with the plan or account. Accordingly, affiliates of the Trust and Bluerock are not permitted to purchase the Secured Debentures with assets of any benefit plan investor if they: (a) have investment discretion with respect to such assets or (b) regularly give individualized investment advice which serves as the primary basis for the investment decisions made with respect to such assets. In addition, no fiduciary of a qualified plan or owner of an individual retirement account should purchase the Secured Debentures both individually and with assets of the benefit plan investor. With respect to an investing IRA, the tax-exempt status of the account could be lost if the investment constitutes a prohibited transaction under Code Section 408(e)(2) by reason of the affiliate of the Trust or Bluerock engaging in the prohibited transaction with the IRA or the individual who established the IRA or his beneficiary. If the IRA were to lose its tax-exempt status, the entire value of the IRA would be considered to be distributed and taxable to the IRA sponsor.

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LITIGATION AND LEGAL MATTERS None of Bluerock, Mr. Kamfar or the Trust is presently party to any material litigation, nor to the knowledge of management is any litigation threatened against any of them, any of their management, or any affiliate, which may materially affect operations or projected goals.

REPORTS The Trust will furnish the following reports, statements, and tax information to each Investor: Confirmation of the Secured Debentures. Upon acceptance of the Subscription Agreement, each Investor will receive a confirmation of the amount of the denomination of his purchase. Since the Secured Debentures will be “book-entry” on the Debenture Register, Investors will not receive any form of a “debenture certificate,” unless requested in writing. Statements. The Trust shall provide Investors with statements of their accounts on a quarterly basis detailing their interest earned during the prior quarterly period and the then outstanding principal balance of the Secured Debentures. The Trust shall also provide an unaudited, annual financial statement of the Trust (within 120 days from the end of the calendar year) at the request of the Investor or their financial advisor. Tax Information. Investors will also be sent an IRS Form 1099-INT within 30 days after the end of each calendar year.

NO RATING The Trust will not request a rating from Standard and Poor’s Corporation, Moody’s Investors Service, or any other or similar rating agency. The Trust believes that the benefits of a rating do not justify the costs associated with a rating for the Secured Debentures issued by a new company with no established operating history.

ADDITIONAL INFORMATION The Trust will answer all inquiries from investors and their advisors concerning these matters and will afford investors and their advisors the opportunities to obtain any additional information (to the extent the Trust possesses such information or can acquire it without unreasonable effort or expense) necessary to verify the accuracy of the representations or information set forth in this Memorandum.

Prospective Investors and their advisors are invited to review, at the Trust’s offices, or at a mutually agreed upon location at any reasonable hour and after reasonable prior notice, any materials reasonably available to Trust and its management relating to the Trust, this Offering, Bluerock, anything set forth in this Memorandum or any other matter deemed by the investor to be material to a decision to purchase Secured Debentures. In the Subscription Agreement, you will represent that you are completely satisfied with the results of your pre-investment due diligence activities.

Exhibit A

Subscription Agreement

_______________________________________

SUBSCRIPTION BOOKLET

FOR SECURED DEBENTURES

BR SENIOR SECURED DEBENTURE TRUST, LLC

________________________________________

Dear Prospective Purchaser: Thank you for your interest in the offering of investment in Senior Secured Debentures (“Interests” or “Secured Debentures”) of BR Senior Secured Debenture Trust, LLC, a Delaware limited liability company (the Trust”) sponsored by Bluerock Real Estate, LLC. We would like to provide you every opportunity to review the accompanying offering material before deciding to invest.

In order to subscribe, please complete all the documentation required and deliver to:

Bluerock Real Estate Investor Relations 16500 North Park Dr. Suite 202 Southfield, MI 48075 Phone:(248)559-1190

DOCUMENT INSTRUCTIONS

1. Purchaser Questionnaire for

Secured Debentures

Instructions included in document (attached as Exhibit A)

2. Subscription Agreement Please review and execute (attached as Exhibit B)

3. Copy of Entity Documents

(if applicable)

If taking title as a Corporation, Trust, Partnership, or LLC,

please include the EIN and a copy of all current

formation and organization documents.

4. PPM Identification Please put the number of the PPM that you

reviewed/received (located on the top right corner of PPM) on

the first page of the Purchaser Questionnaire, as provided.

5. Photo ID For Patriot Act requirements, please include a copy of photo

id (valid driver’s license and/or passport).

6. Direct Deposit Information Please fill out form attached to facilitate distributions into

Purchaser’s account.

Available Secured Debentures will be secured on a first come first served basis. Documents must be mailed (not faxed) to the address above and must be entirely complete in order to secure the investment.

The full purchase price for your investment in the Secured Debentures must be paid by check or wire upon submission of your Subscription Agreement as follows.

Until the Minimum Offering Amount has been raised ($500,000) and before escrow has been broken, all subscription payments must be delivered to an escrow bank account at First Republic Trust Company (the “Escrow Agent”), as follows:

First Republic Trust Company Payable to: BR Senior Secured Debenture Trust, LLC

Wire Instructions: Account Number: 62-00-1006

Routing/ABA Number: 321 081 669 BNF: Trust Department Account No. 992 000 10056

For further credit to: BR Senior Secured Debenture Trust Account If the Minimum Offering Amount has not been received and accepted by September 30, 2009 (which may be extended to December 31, 2009, in the Trust’s sole discretion), none of the Secured Debentures will be sold and the amount paid by the prospective Investors will be promptly returned in full, with any interest earned. As soon as practicable after the Minimum Offering Amount has been funded into the Escrow Agent, and upon written instruction from the Trust and the Dealer-Manager to the Escrow Agent to break escrow, the escrowed funds will be released to the Trust Account (defined below) and an initial closing under this Offering will occur. After the Minimum Offering Amount has been raised and after escrow has been broken, all funds should be mailed, delivered or wired to:

JP Morgan Chase, N.A. Payable to: BR Senior Secured Debenture Trust, LLC

Wire Instructions: Account Number: 822442174

Routing/ABA Number: 021 000 021 Account Name: BR Senior Secured Debenture Trust, LLC

If you have any questions regarding the completion of the documents, the closing process, or anything else feel free to contact us at (888) 558-1031 or investor.relations@bluerockre.com. Thank you, /s/ Ramin Kamfar

R. Ramin Kamfar Chief Executive Officer

BR SENIOR SECURED DEBENTURE TRUST, LLC

INSTRUCTIONS TO INVESTORS AND SUBSCRIPTION AGREEMENT

Please read carefully the Confidential Private Placement Memorandum of BR Senior Secured Debenture

Trust, LLC (the “Trust”) dated April 30, 2009, and all exhibits thereto (collectively, together with any amendments and supplements thereto, the “Memorandum”) relating to Secured Debentures in the Trust (each, an “Secured Debenture” and collectively the “Secured Debentures”) before deciding to invest. Defined terms used herein and not otherwise defined shall have the meaning ascribed to them in the Memorandum.

EACH PROSPECTIVE PURCHASER SHOULD EXAMINE THE SUITABILITY OF THIS TYPE OF INVESTMENT IN THE CONTEXT OF HIS/HER OWN NEEDS, INVESTMENT OBJECTIVES AND FINANCIAL CAPABILITIES AND SHOULD MAKE HIS/HER INDEPENDENT INVESTIGATION AND DECISION AS TO SUITABILITY AND AS TO THE RISK AND POTENTIAL GAIN INVOLVED. ALSO, EACH PROSPECTIVE PURCHASER MUST CONSULT WITH HIS/HER ATTORNEY, ACCOUNTANT, FINANCIAL CONSULTANT OR OTHER BUSINESS OR TAX ADVISOR REGARDING THE RISKS AND MERITS OF THE PROPOSED PURCHASE.

This Offering is limited to a purchaser who certifies that he/she meets all of the suitability requirements set forth in the Memorandum and the Subscription for the purchase of the Secured Debenture.

If the undersigned meets these qualifications and desires to purchase a Secured Debenture, please complete, execute and deliver this Purchaser Questionnaire including all applicable attachments and the accompanying Subscription.

Upon receipt of the signed Purchaser Questionnaire and Subscription and acceptance by the Trust, the Trust will notify the undersigned accordingly. The Trust reserves the right, in its sole discretion, to accept or reject a prospective Purchaser for any reason whatsoever. If a prospective Purchaser is not accepted, such Purchaser’s original documents and payments will be returned without interest.

Important Note: The person or entity actually making the decision to invest in Secured Debentures

should complete and execute the Subscription Agreement. For example, retirement plans often hold certain

investments in trust for their beneficiaries, but the beneficiaries may maintain investment control and

discretion. In such a situation, the beneficiary with investment control must complete and execute the

Subscription Agreement (this also applies to trusts, custodial accounts and similar arrangements).

_________________________________

BR SENIOR SECURED DEBENTURE TRUST, LLC

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

COPY NUMBER: ___________________

LIST ANY SUPPLEMENTS, IF APPLICABLE:

__________________________________________

A-1

EXHIBIT A

PURCHASER QUESTIONNAIRE

BR Senior Secured Debenture Trust, LLC

This Purchaser Questionnaire relates to the undersigned’s intention to purchase a Secured Debenture in the

Trust, for a purchase price of $___________________, subject to the terms, conditions, acknowledgments, representations and warranties stated herein and in the Memorandum.

If the undersigned is introduced to the Trust by a registered broker/dealer, please forward the

attached BROKER/DEALER REPRESENTATIONS AND WARRANTIES to your registered broker/dealer

for completion.

If the undersigned is introduced to the Trust by a registered investor advisor (“RIA”), please

forward the attached REGISTERED INVESTMENT ADVISOR REPRESENTATONS AND

WARRANTIES to your RIA for completion.

In order to induce the Trust to accept the Subscription, and as further consideration for such acceptance, the undersigned hereby makes the following acknowledgments, representations and warranties, with the full knowledge that the Trust will expressly rely thereon in making a decision to accept or reject the undersigned’s Subscription:

1. The undersigned’s primary state of residence is: _____________________________

2. The undersigned’s date of birth is: _______________________________________

3. The following information is required in order that the Trust may accurately determine if the undersigned prospective investor is an “Accredited Investor,” as defined in Rule 501(a) of Regulation D adopted by the U.S. Securities and Exchange Commission.

The undersigned represents that the undersigned meets the requirements of the initialed categories: (PLEASE INITIAL ALL CATEGORIES THAT APPLY)

(a) The undersigned is a natural person whose net worth (including home, furnishings and automobiles), or joint net worth with the undersigned’s spouse, at this time is in excess of $1,000,000.

(b) The undersigned is a natural person whose individual income was in excess of $200,000 in each of the two most recent years, or whose joint income with the undersigned’s spouse was in excess of $300,000 for each of those years, and the undersigned has a reasonable expectation of reaching an equal or greater income level in the current year.

(c) The undersigned is an entity owned entirely by Accredited Investors.

(d) The undersigned is a bank as defined in Section 3(a)(2) of the Securities Act of 1933 (the “Act”), savings and loan association, or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; insurance company as defined in Section 2(13) of the Act; investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958; or a plan

established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000.

(e) The undersigned is a “Private Business Development Company” as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

(f) The undersigned is a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered hereby, with total assets in excess of $5,000,000.

(g) The undersigned is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered hereby, whose purchase is directed by a “sophisticated person,” as defined in Rule 506(b)(2)(ii) of Regulation D under the Act.

4. The undersigned acknowledges that the undersigned has consulted if and as necessary with a qualified attorney or other knowledgeable professional as to the tax and real estate issues associated with the purchase of the Secured Debenture.

5. The undersigned acknowledges that the sale of the Secured Debenture has not been accompanied by any public advertisement or general solicitation or as the direct result of an investment seminar sponsored by the Trust or any of its Affiliates.

6. THE SECURED DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND IS BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURED DEBENTURE IS SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURED DEBENTURE HAS NOT BEEN APPROVED OR DISAPPROVED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION, OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

7. The undersigned hereby agrees to indemnify, defend and hold harmless the Trust, the Sponsor and their Affiliates and all of their respective members, managers, shareholders, officers, employees, affiliates and advisors (“Indemnified Parties”) from any and all damages, losses, liabilities, costs and expenses (including attorneys’ fees and costs) that they may incur by reason of the undersigned’s failure to fulfill all of the terms and conditions of the associated Subscription or by reason of the untruth or inaccuracy of any of the representations, warranties or agreements contained herein, in the Subscription or in any other documents the undersigned has furnished to any of the foregoing in connection with this transaction. This indemnification includes, but is not limited to, any damages, losses, liabilities, costs or expenses (including reasonable attorneys’ fees and costs) incurred by the Indemnified Parties in defending against any alleged violation of federal or state securities laws which is based upon or related to any untruth or inaccuracy of any of your representations, warranties or agreements contained herein, in the Subscription or in any other documents that the undersigned has furnished to any of the foregoing in connection with this transaction.

REGISTRATION INFORMATION

Please print the exact title (registration) the undersigned desires on the account. In the case of a corporation, trust or other entity, the undersigned should use the full name of such entity and include the name and title of the signatory for such entity (i.e., Trustee, President, Manager, etc.):

DISTRIBUTIONS Please indicate to whom distributions should be sent. (SEE ATTACHED DIRECT DEPOSIT FORM)

Name:

Address:

PURCHASER INFORMATION

Please send all Purchaser correspondence to the following:

Name:

Purchaser Address:

Work (____) ______________________ Home (____)

Fax (____) ______________________ Home (____)

Primary State of Residence:

Federal Tax ID Number/Social Security Number:

E-Mail Address:

EXECUTION INDIVIDUAL

Please sign this Purchaser Questionnaire by completing the appropriate section below:

If the prospective Purchaser is an INDIVIDUAL, please complete the following:

(if applicable) Signature of Investor Signature of Joint Owner

(if applicable) Name (please type or print) Name of Joint Owner

(if applicable) Social Security Number Social Security Number of Joint Owner

State of Legal Residence

CORPORATION If the prospective Purchaser is a CORPORATION, complete the following:

The undersigned hereby represents, warrants and agrees that: (i) the undersigned has been duly authorized by all requisite action on the part of the corporation listed below (the “Corporation”) to acquire the Secured Debenture; (ii) the Corporation has all requisite power and authority to acquire the Secured Debenture; and (iii) the undersigned officer of the Corporation has authority under the Articles of Incorporation, Bylaws, and resolutions of the Board of Directors of the Corporation to execute this Purchaser Questionnaire and the Subscription. The undersigned officer encloses a true copy of the Articles of

Incorporation, the Bylaws and, as necessary, the resolutions of the Board of Directors

authorizing a purchase of the Secured Debenture, in each case as amended to date.

Name of Corporation (please type or print)

By:

Name:

Title:

Federal Employer ID Number

State of Formation

PARTNERSHIP If the prospective Purchaser is a PARTNERSHIP, complete the following:

The undersigned hereby represents, warrants, and agrees that: (i) the undersigned is a general partner of the partnership named below (the “Partnership”); (ii) the undersigned general partner has been duly authorized by the Partnership to acquire the Secured Debenture and the general partner has all requisite power and authority to acquire the Secured Debenture; and (iii) the undersigned general partner is authorized by the Partnership to execute this Purchaser Questionnaire and the Subscription. The undersigned general partner encloses a true copy

of the Partnership Agreement of the Partnership, as amended to date, together with a

current and complete list of all partners and, as necessary, the resolutions of the

Partnership authorizing the purchase of the Secured Debenture.

Name of Partnership (please type or print)

By:

Name:

Title: General Partner

Federal Employer ID Number

State of Formation

TRUST If the prospective Purchaser is a TRUST, complete the following:

The undersigned hereby represents, warrants and agrees that: (i) the undersigned trustee(s) is duly authorized by the terms of the trust instrument (the “Trust Instrument”) for the trust (“Investing Trust”) set forth below to acquire the Secured Debenture; (ii) the undersigned, as trustee(s), has all requisite power and authority to acquire the Secured Debenture for the Investing Trust; and (iii) the undersigned trustee(s) is authorized by the Investing Trust to execute this Purchaser Questionnaire and the Subscription. The undersigned trustee(s)

encloses a true copy of the Trust Instrument of said Investing Trust, as amended to date,

and, as necessary, the resolutions of the trustees authorizing the purchase of the Secured

Debenture.

Name of Investing Trust (please type or print)

By:

Name:

Title: Trustee

Federal Employer ID Number

State of Formation

LIMITED LIABILITY COMPANY

If the prospective Purchaser is a LIMITED LIABILITY COMPANY, complete the following:

The undersigned hereby represents, warrants, and agrees that: (i) the undersigned is either the authorized manager or all of the members of the limited liability company named below (the “LLC”); (ii) the undersigned has been duly authorized by the LLC to acquire the Secured Debenture and has all requisite power and authority to acquire the Secured Debenture; and (iii) the undersigned is authorized by the LLC to execute this Purchaser Questionnaire and the Subscription. The undersigned encloses a true copy of the Operating Agreement of the

LLC, as amended to date, together with a current and complete list of all members and

managers and, as necessary, the resolutions of the LLC authorizing the purchase of the

Secured Debenture.

Name of LLC (please type or print)

By:

Name:

Title: Manager

Federal Employer ID Number

State of Formation

HUSBAND AND WIFE

If the prospective Purchasers are HUSBAND AND WIFE, complete the following:

Name of Spouse (please type or print)

Social Security Number

Name of Spouse (please print or type)

Social Security Number

State of Residence

EXHIBIT B

THE SECURED DEBENTURES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURED DEBENTURES ARE SUBJECT TO

RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD

EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE

STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

SUBSCRIPTION AGREEMENT

The undersigned (“Subscriber”) acknowledges receiving and reviewing a copy of the Confidential Private Placement Memorandum, dated April 30, 2009, with all Exhibits and any supplements thereto (the “Memorandum”), relating to the private offering (the “Offering”) of Senior Secured Debentures (the “Secured Debentures” and each a “Secured Debenture”), of BR Senior Secured Debenture Trust, LLC (the “Trust”), a Delaware limited liability company. 1. Subscription. Subject to the terms and conditions hereof, the Subscriber hereby subscribes for and agrees to purchase a Debenture in the principal amount indicated on the signature page hereof. The Subscriber hereby tenders to the Trust funds in such principal amount. This Subscription Agreement shall not become binding unless the Trust accepts this subscription, the subscription price has been received and accepted by the Trust and such additional conditions as the Trust, in its sole and absolute discretion, shall require are satisfied. This subscription shall not be deemed accepted by the Trust until a duly authorized officer of the Trust signs this Agreement. If this subscription is accepted, this Agreement shall become effective as between the Trust and the Subscriber. If this subscription is rejected, the Agreement and the subscription price will be returned to the Subscriber as soon as reasonably practicable, and this subscription shall be rendered void and have no further force or effect. 2. Acceptance of Subscription. The Subscriber acknowledges and agrees that this subscription is made subject to the following express terms and conditions: (a) the Subscriber is committing to purchase the Secured Debentures for which he or she has subscribed, (b) the Trust shall have the right to reject the subscription, in whole or in part, for any reason whatsoever or no reason, (c) the Trust shall have no obligation to accept subscriptions for the Secured Debentures in the order received, and (d) the Trust shall have no liability for documents or checks lost in the mail or by other delivery carriers, or for documents delivered to broker dealers, except as such documents are delivered to, and acknowledged received by, the Trust. 3. Purchaser Questionnaire. The Subscriber has properly completed all applicable Purchaser Questionnaires (each, a “Questionnaire”) attached to this Subscription Agreement. The Subscriber acknowledges that the information elicited by such Questionnaire is for the purpose of enabling the Trust to determine whether the Subscriber meets the suitability requirements under applicable securities laws, and that the Trust will rely upon the information contained therein for purposes of such determination. The Subscriber represents and warrants to the Trust that the answers contained in each Questionnaire are true and correct in all respects, and that Subscriber has not omitted any information necessary to make such answers and representations therein and in this Subscription Agreement true and correct. The Subscriber agrees to immediately notify the Trust of anything that would cause any such Questionnaire to be untrue, incomplete or have been breached at any time on or prior to acceptance or rejection of this subscription. 4. General Acknowledgments, Representations and Covenants of the Subscriber. The Subscriber acknowledges that he/she is purchasing Secured Debentures in the Trust without being furnished any offering literature or prospectus other than the Memorandum (which supersedes any other documentation that may have been furnished to Subscriber). The Subscriber acknowledges that he/she has had an opportunity to ask questions and receive answers concerning the terms and conditions of the Offering and to obtain any additional information that the Trust possesses or could acquire without unreasonable effort or expense necessary to verify the accuracy of the information contained in the Memorandum, and that he/she has relied on his/her own knowledge or the advice of his/her own counsel, accountants or advisers with regard to the tax and other considerations involved in making an investment in the Secured Debentures, and no representations have been made to the Subscriber concerning the Secured Debentures, the Trust, its business or prospects, or other matters, except as set forth in the Memorandum.

5. Additional Acknowledgments and Representations. The Subscriber further acknowledges, represents, warrants and covenants as follows: (a) The Subscriber has such knowledge and experience in financial and business matters that Subscriber is capable of evaluating the merits and risks of an investment in the Secured Debentures and of making an informed investment decision. (b) The Subscriber has adequate means of providing for his/her current needs and possible personal contingencies, and has no need, and anticipates no need in the foreseeable future, to sell the Secured Debentures for which the Subscriber hereby subscribes. The Subscriber is able (i) to bear the economic risk of his investment in the Secured Debentures, (ii) to hold the Secured Debentures for an indefinite period of time, and (iii) has sufficient financial liquidity to sustain a loss of the entire investment in the event such loss should occur. (c) The Subscriber acknowledges and confirms that he/she has fully considered the contents of the Memorandum, and that he/she understands and is aware of all the risks related to this investment, including but not limited to the following factors: (i) any projections, forecasts or estimates as may have been provided to the Subscriber are purely speculative and cannot be relied upon to indicate actual results that may be obtained through this investment; any such projections, forecasts and estimates are based upon assumptions which are subject to change and which are beyond the control of the Trust or its management; (ii) the tax effects which may be expected by this investment are not susceptible to absolute prediction, and new developments and rules of the Internal Revenue Service, audit adjustment, court decisions or legislative changes may have an adverse effect on one or more of the tax consequences of this investment; (iii) the Subscriber has been advised to consult with his/her own advisor regarding legal matters and tax consequences involving this investment; (iv) it is unlikely that there will be a trading market for the Secured Debentures; (v) the Secured Debentures will at no time be freely transferable, and, accordingly, it may not be possible for the Subscriber to liquidate his/her investment or any portion thereof, in case of emergency, if at all; and (vi) investment in the Secured Debentures involves other risk factors that are more fully set forth in the Memorandum. (d) The Subscriber has determined that the purchase of Secured Debentures is consistent with his/her investment objectives and income prospects. (e) There have been no representations, guaranties or warranties made to the Subscriber by the Trust, or its agents or employees, or by any other person, expressly or by implication, with respect to (i) the approximate length of time that the Subscriber will be required to remain an owner of the Secured Debentures; (ii) the percentage of profit and/or amount of or type of consideration, profit or loss (including tax benefits) to be realized, if any, as a result of investment in the Secured Debentures; and (iii) the possibility that the past performance or experience on the part of the Trust or any officer of the Trust or of any other person, might in any way indicate the predictable results of operations of the Trust, or of ownership of the Secured Debentures. (f) The Subscriber acknowledges and understands that the Memorandum supersedes all previously given materials, if any, and nothing other than the Memorandum was relied upon in making a decision to subscribe for Secured Debentures. (g) The Subscriber understands that the Secured Debentures have not been registered under any federal securities laws or the laws of any State and are being offered under an exemption from registration thereunder; the Subscriber represents and warrants that the Secured Debentures will be acquired by the Subscriber solely for his/her own account, for investment purposes only, and not with a view to, or in connection with, any resale or other distribution thereof in a manner which would require registration under the Securities Act of 1933 (the “1933 Act”), or any applicable state securities laws; and the Subscriber does not now have any reason to anticipate any change in his/her or its circumstances or other particular occasion or event which would cause him/her or it to sell the Secured Debentures; the Subscriber further represents and warrants that he/she has no agreement or other arrangement, formal or informal, with any person to sell, transfer or pledge any part of the Secured Debentures subscribed for hereby. (h) The Subscriber understands that no federal or state agency has passed on the fairness for investment of, or

made any recommendation or endorsement of, the Secured Debentures. (i) If the Subscriber is an individual, he/she is at least 21 years of age. (j) Subscriber is a bona fide resident and domiciliary (not a temporary or transient resident) of the state or country set forth in the Questionnaire and has no present intention of becoming a resident or domiciliary of any other state or jurisdiction, and the Subscriber represents that these statements are now true and have been true since prior to the first offer to Subscriber of an opportunity to invest in the Trust. The address and social security number or federal tax identification number set forth below are the Subscriber’s true and correct residence and social security number or federal tax identification number. (k) The Subscriber will be the sole party in interest in the Secured Debentures and as such will be vested with all legal and equitable rights in the Secured Debentures. (l) Under penalties of perjury, Subscriber certifies that (i) the taxpayer identification number shown on this form is the Subscriber’s correct taxpayer identification number, and (ii) Subscriber is not subject to backup withholding either because (A) Subscriber has not been notified that Subscriber is subject to backup withholding as a result of a failure to report all interest or dividends, or (B) the Internal Revenue Service (the “IRS”) has notified Subscriber that Subscriber is no longer subject to backup withholding. Under penalties of perjury, unless express written disclosure to the contrary is delivered to the Trust together with this form, Subscriber certifies that Subscriber is not a non-resident alien individual, a foreign partnership, a foreign corporation, or a foreign estate or trust, which would be a foreign person within the meaning of Sections 1441, 1446 and 7701(a) of the Internal Revenue Code of 1986, as amended, and that Subscriber will notify the Trust before a change in Subscriber’s foreign status. [You must cross out item (ii) above if you have been notified by the IRS that you are subject to

backup withholding due to notified payee underreporting, and if you have not been notified by the IRS

advising you that backup withholding due to notified payee underreporting has terminated.] (m) Neither the Subscriber, nor any of its beneficial owners, appears on the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control of the United States Department of the Treasury or in the Annex to United States Executive Order 132224 – Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, nor are they otherwise a prohibited party under the laws of the United States. The Subscriber further represents that the monies used to fund the investment in the Trust are not derived from, invested for the benefit of, or related in any way to, the governments of, or persons within, any country under a U.S. embargo enforced by OFAC. The Subscriber further represents and warrants that the Subscriber: (i) has conducted thorough due diligence with respect to all of its beneficial owners, (ii) has established the identities of all beneficial owners and the source of each of the beneficial owner’s funds and (iii) will retain evidence of any such identities, any such source of funds and any such due diligence. The Subscriber further represents that the subscriber does not know or have any reason to suspect that (i) the monies used to fund the subscriber’s investment in the Trust have been or will be derived from or related to any illegal activities, including but not limited to, money laundering activities, and (ii) the proceeds from the Subscriber’s investment in the Trust will be used to finance any illegal activities. (n) All representations, warranties and covenants contained in this Subscription Agreement are true and correct as of the date hereof and will be true and correct as of the date this subscription is accepted by the Trust, if at all. 6. Indemnification. The Subscriber acknowledges that he/she or it understands the meaning and legal consequences of the representations, warranties and covenants in this Subscription Agreement, and that the Trust has relied upon such representations, warranties and covenants, and he/she hereby agrees to indemnify and hold harmless the Trust, Bluerock Real Estate, LLC, any soliciting broker-dealer, and their respective officers, managers, directors, affiliates, controlling persons, agents and employees from and against any and all loss, damage or liability due to or arising out of breach of any such representation, warranty or covenant. 7. Disputes. (a) Governing Law. The Subscriber hereby covenants and agrees that any dispute, controversy, or other claim arising under, out of or relating to this Subscription Agreement or any of the transactions contemplated hereby, or

any amendment thereof, or the breach or interpretation hereof or thereof, shall be determined in accordance with the laws of New York. (b) Venue. THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. THE TRUST MAY, AT ITS SOLE DISCRETION, ELECT (i) THE STATE OF NEW YORK, (ii) NEW YORK COUNTY, OR (iii) THE UNITED STATES OF AMERICA, SOUTHERN DISTRICT OF NEW YORK, AS THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO SUCH VENUE AS BEING AN INCONVENIENT FORUM. (c) Waiver of Jury Trial. THE PARTIES HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS AGREEMENT OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION HEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY THE PARTIES, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH OTHER PARTY, AS APPLICABLE. 8. Limitation on Transfer of Secured Debentures. The Subscriber acknowledges that he/she/it is aware that there are substantial restrictions on the transferability of the Secured Debentures. Since the Secured Debentures will not be, and the undersigned has no right to require that they be, registered under the 1933 Act, the Secured Debentures may not be, and the Subscriber agrees that they shall not be, sold, pledged, hypothecated or otherwise transferred unless such sale is exempt from such registration under the 1933 Act, and applicable state securities laws. The Subscriber further acknowledges that the Trust is under no obligation to aid him/her/it in obtaining any exemption from the registration requirements. The Subscriber also acknowledges that he/she/it shall be responsible for compliance with all conditions on transfer imposed by any securities administrator of any state and for any expense incurred by the Trust for legal or accounting services in connection with reviewing such a proposed transfer and/or issuing opinions in connection therewith. 9. Compliance with Private Placement Exemption Requirements. The Subscriber understands and agrees that the following restrictions and limitations are applicable to his/her/its purchase and his/her/its resales, hypothecations or other transfers of the Secured Debentures pursuant to federal and state securities laws: (a) Such Secured Debentures shall not be sold, pledged, hypothecated or otherwise transferred unless they are registered under the 1933 Act and applicable state securities laws or are exempt therefrom. (b) A legend in substantially the following form has been or will be placed on any certificate(s) or other document(s) evidencing the Secured Debentures: THE SECURITIES REPRESENTED BY THIS

INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT

BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE

STATE SECURITIES LAWS. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE

SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED AT ANY TIME

WHATSOEVER, EXCEPT UPON DELIVERY TO THE ISSUER OF AN OPINION OF COUNSEL THAT

REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE ISSUER

OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE ISSUER TO THE EFFECT

THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933,

AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION

PROMULGATED THEREUNDER.

(c) In addition, the legend described in subparagraph (b) above will be placed with respect to any new certificate(s) or other document(s) issued upon presentment by the undersigned of certificate(s) or other document(s)

for transfer.

10. Other Matters. (a) The Subscriber agrees to execute (with acknowledgment or affidavit, if requested by the Trust) promptly all such agreements, certificates, tax statements, tax returns and other documents as may be required of the Trust or the investors in the Trust by the laws of the United States of America, or any state in which the Trust conducts or plans to conduct business, or any political subdivision or agency thereof or of any foreign nation. The Subscriber agrees that, except as provided herein, this Agreement or any agreement made hereunder or pursuant hereto may not be canceled, terminated or revoked by him except with the written consent of the Trust. The Subscriber agrees that this Agreement and the foregoing acknowledgments, representations and covenants shall survive delivery, acceptance of the subscription, closing of the transactions contemplated by this Agreement and any investigation made by any party relying on the same. The Subscriber agrees to execute any and all further documents necessary or advisable, in the sole discretion of the Trust, in connection with his becoming a holder of Secured Debentures. The Subscriber agrees not to transfer or assign this Agreement, or any of his interest herein, and further agrees that the assignment and transfer of the Secured Debentures acquired pursuant hereto shall be made only in accordance with all applicable laws. (b) All notices or other communications given or made to the Trust hereunder shall be either (i) to the Trust in writing and delivered by hand or mailed by registered or certified mail, return receipt requested, postage prepaid, at BR Senior Secured Debenture Trust, LLC, c/o Bluerock Real Estate, 680 Fifth Avenue, 16th Floor, New York, NY 10019, or (ii) to the Subscriber at the street address set forth on the signature page hereto (or at such address as either party may, by notice given in the manner described herein, change its address for purposes of notice hereunder). (c) This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflict of laws principles of any jurisdiction. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof, and may be amended only by a writing executed by the party to be bound thereby. IN WITNESS WHEREOF, the Subscriber has hereby executed the Subscription Agreement, agreeing to all the terms and provisions thereof, as of the day set forth below. _____________________________________ ________________________________________

Signature of Subscriber Signature of Subscriber (if purchasing jointly)

_____________________________________

Date

CONSENT OF SPOUSE

(For individual purchasers in community property states, which are currently

Alaska, Arizona, California, Idaho, Louisiana, Nevada

New Mexico, Texas, Washington and Wisconsin)

I, , spouse of

[print name] [print name]

have read and hereby approve of the Instructions to Investors and Subscription Agreement for BR Senior Secured

Debenture Trust, LLC (the “Subscription Agreement”), which my spouse has signed. I hereby appoint my spouse as

my attorney-in-fact with respect to the exercise of any rights related to a purchase of any such Secured Debentures

and agree to be bound by the provisions of the Subscription Agreement and any other documents related to the

purchase of any such Secured Debentures (collectively, the “Purchase Documents”) insofar as I may have any rights

in said Purchase Documents or any property or interest subject thereto under the community property laws of the

State of ________________ or similar laws relating to marital property in effect in the state of our residence as of

the date of signing of the Subscription Agreement and/or the Purchase Documents.

Dated: _____________, 20___

[signature]

BROKER/DEALER REPRESENTATIONS AND WARRANTIES Standards of suitability have been established by BR Senior Secured Debenture Trust, LLC (the “Trust”) and fully disclosed in the section of the Memorandum entitled “WHO MAY INVEST.” The undersigned registered broker dealer hereby represents and warrants to the Trust and its affiliates that prior to recommending purchase of the Secured Debenture, the undersigned registered broker dealer and the registered representative named below had and continue to have reasonable grounds to believe, on the basis of information supplied by the Buyer concerning his or her investment objectives, other investments, financial situation and needs, and other pertinent information that: (i) the Buyer is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act; (ii) the Buyer meets any additional standards established by the Trust; (iii) the Buyer has a net worth and income sufficient to sustain the risks inherent in an investment in the Secured Debenture, including loss of the entire investment and lack of liquidity; and (iv) the Secured Debenture is otherwise a suitable investment for the Buyer. The undersigned will maintain in its files documents disclosing the basis upon which the suitability of the Buyer was determined. The undersigned further represents and warrants that the information set forth below is accurate and that the above subscription either does not involve a discretionary account or, if so, that the undersigned has made the Buyer aware, prior to subscribing for the Secured Debenture, of the risks entailed in investing in the Secured Debenture. Name of Customer: ______________________________________________________________________________________ Broker/Dealer Firm Contact Information: Broker/Dealer Firm Name: ________________________________________________________________________________ Main Address of Broker/Dealer Firm: _______________________________________________________________________ E-mail address: __________________________ Branch Phone Number: (________) _____________________

Due Diligence Representative Contact Information: Name of Broker/Dealer Contact for Due Diligence: ____________________________________________________________ Address of Due Diligence Contact: _________________________________________________________________________ E-mail address: __________________________ Phone Number: (________) _____________________

Representative: Registered Representative: ________________________________________________________________________________

(Please Print) _______________________________________________________________________________________________________ Registered Representative's BRANCH ADDRESS, City, State, Zip E-mail address: __________________________ Phone Number: (________) _____________________

I hereby certify that I am registered in ______________________________, the State of Sale. _______________________________________ ___________________________________________ Signature of Registered Representative Signature of Registered Principal* _______________________________________ ___________________________________________ Date Print Name ___________________________________________ Date Contact Number:____________________________

* PAPERWORK WILL NOT BE ACCEPTED WITHOUT THE SIGNATURE OF A MANAGING MEMBER OF THE BROKER/DEALER FIRM.

REGISTERED INVESTMENT ADVISOR REPRESENTATIONS AND WARRANTIES

Standards of suitability have been established by BR Senior Secured Debenture Trust, LLC (the

“Trust”) and are disclosed in the section of the Memorandum entitled “WHO MAY INVEST.” The undersigned

registered investment advisor (“RIA”) hereby represents and warrants to the Trust and its affiliates that prior

to recommending purchase of the Secured Debenture, the RIA has reasonable grounds to believe, on the basis of

information supplied by the prospective purchaser concerning his, her or its investment objectives, other

investments, financial situation and needs, and other pertinent information that: (i) the Buyer is an “accredited

investor” as defined in Rule 501(a) of Regulation D under the Securities Act; (ii) the Buyer meets any additional

investor suitability standards established by the Trust; (iii) the Buyer has a net worth and income sufficient to

sustain the risks inherent in an investment in the Secured Debenture, including loss of the entire investment

and lack of liquidity; and (iv) the Secured Debenture is otherwise a suitable investment for the Buyer. The

undersigned will maintain in its files documents disclosing the basis upon which the suitability of the Buyer

was determined. The RIA further warrants that he or she has informed the Buyer of all aspects of liquidity and

marketability, or lack thereof, of this investment and delivered the Memorandum (including all supplements

thereto) to the Buyer. Also, the RIA agrees that he or she will maintain in his or her files documents disclosing

the basis upon which the suitability of the Buyer was determined.

The undersigned further represents and warrants that the information set forth below is accurate and

that the above subscription either does not involve a discretionary account or, if so, that the undersigned has

made the Buyer aware, prior to subscribing for the Secured Debenture, of the risks entailed in investing in the

Secured Debenture.

The RIA must sign below confirming all of the above statements. Also, by signing below, the RIA

asserts that he or she may lawfully offer the Secured Debentures in the state designated as the Buyer's address

or the state in which the sale is to be made, if different. Name of Client Investment Amount Name of Registered Investment Advisor Advisor Number (if applicable) RIA’s Branch Address Phone Number: ( )__________________ E-mail Address: ___________________________ I hereby certify that I am registered in ______________________________, the State of sale.

____________________________________________ _______________________________

Signature of Registered Investment Advisor Date

Direct Deposit Enrollment Request / Recurring Deposits Agreement

Authorization Agreement

Authorization agreement for automatic deposits (ACH credits) Trust (issuer) name: BR SENIOR SECURED DEBENTURE TRUST, LLC I hereby authorize: BR SENIOR SECURED DEBENTURE TRUST, LLC to make automatic deposits to my account at the financial institution named below. If monies to which I am not entitled are deposited to the specific account, I authorize the Trust (issuer) to direct the financial institution to return said funds. This authority will remain in effect until I have filed a new authorization, or until this authorization is revoked by me in writing with a reasonable time provided to act on such instructions.

Account Information

Name of Financial Institution: ___________________________________________________________

Name of Account Holder: ______________________________________________________________

ACH Routing Number: ___________________________________ Please note that your bank’s ACH routing number may be different than the Wire Transfer routing number

Checking Savings

Account Number: ___________________________________

Signature

First Name, Middle Initial,

Last Name: __________________________________________________________

Address: __________________________________________________________

City, State, Zip Code: __________________________________________________________

Daytime Phone Number: __________________________________________________________

Social Security Number: __________________________________________________________

Signature (required): ________________________________________ Date: ____________

Please attach a voided check and return this form to:

Attention: Investor Relations

Bluerock Real Estate, LLC, 16500 North Park Drive #202, Southfield, MI 48075

Fax to: (248) 424-5699 or email to: investor.relations@bluerockre.com

Exhibit B

Form of Collateral Agency Agreement

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COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT

This COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (this “Agreement”), dated as of April 30, 2009 is entered into among the Holders listed on the signature pages hereof (together with assignees of such Holders, the “Holders”), any Additional Creditors that may become parties to this Agreement, BR Senior Secured Debenture Trust, LLC, a Delaware limited liability company (the “Company”), and Mick & Associates, P.C., LLO, a Nebraska professional corporation, in its capacity as collateral agent for the Holders, the Company and the Additional Creditors (the “Collateral Agent”).

R E C I T A L S

A. The Company will issue and sell, from time to time, to the Holders 9.0% Senior Secured Debentures due December 31, 2013 in the aggregate principal amount of up to $25,000,000 (the “Debentures”), subject to increase to $35,000,000 in the sole discretion of the Company, pursuant to that certain Confidential Private Placement Memorandum dated April 30, 2009, as the same may be supplemented from time to time, describing the offering of the Debentures (the “Memorandum”). The Company intends to fund loans for the acquisition, development and financing of real estate projects as set forth in the Memorandum, subject to the provisions of Section 10(d) of this Agreement (the “Loans,” and each, a “Loan”).

B. The Company concurrently herewith is securing all present and future obligations to the Holders under the Debentures (all such obligations, including, without limitation, punctual payment of principal and interest, being referred to herein as the “Debentures Obligations”), and may secure all Additional Obligations (as defined herein), pursuant to the terms of that certain Pledge and Security Agreement dated as of the date hereof made by the Company to the Collateral Agent and any similar documents executed after the date hereof, as the same may be amended, supplemented or modified from time to time (the “Company Pledge Agreement”). At the time each Loan is funded by the Company, the Company intends to further secure the Debentures Obligations, and may secure all Additional Obligations with a Collateral Assignment of Deed of Trust, Assignment of Rents and Leases, Security Agreements and Fixture Filing and Other Loan Documents with respect to the deed of trust and related Loan documents for each Loan and a Promissory Note Pledge and Security Agreement with respect to the promissory note for each Loan, as the same may be amended, supplemented or modified from time to time (the “Loan

Security Documents,” and collectively with the Company Pledge Agreement, the “Security

Documents”). The Debentures Obligations and the Additional Obligations are collectively referred to as the “Obligations.” The Holders and the Additional Creditors are sometimes collectively referred to in this Agreement as the “Benefitted Parties” and individually referred to as a “Benefitted Party.” The Company Pledge Agreement grants to the Collateral Agent, for the ratable benefit of the Benefitted Parties, a valid, perfected and enforceable first priority lien on and a security interest in all assets of the Company (other than those secured by the Loan Security Documents), and the Loan Security Documents will grant to the Collateral Agent, for the ratable benefit of the Benefitted Parties, a valid and enforceable first priority lien on the promissory note and deed of trust (or mortgage) and related Loan documents for each Loan (hereinafter all of such collateral, shall be referred to collectively as the "Company Collateral").

C. As additional collateral for securing the Obligations, Bluerock Real Estate, LLC (“Bluerock”) grants to the Collateral Agent, for the ratable benefit of the Benefitted Parties, a valid, perfected and enforceable first priority lien on and a security interest in all of Bluerock’s membership interest in the Company and in the Company’s manager (the “Bluerock Collateral”), pursuant to that

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certain Pledge and Security Agreement dated as of even date hereof made by Bluerock to the Collateral Agent (the “Bluerock Pledge Agreement”). For the avoidance of doubt, Bluerock is granting no lien, collateral rights or secured interests in or to any of its assets, except in those specific membership interests in the Company and the Manager as provided in the Bluerock Pledge Agreement. The Company Collateral and the Bluerock Collateral are collectively referred to as the “Collateral.”

D. The Company may issue additional secured debt and/or enter into credit agreements, which will be pari passu with, but not senior to, the Debentures (together with the Debentures, the “Secured Debt”), with investors and/or lenders which become party to this Agreement (such investors and lenders, the “Additional Creditors”) the obligations under which are referred to herein as the “Additional Obligations.” The Holders and the Additional Creditors wish to set forth their understanding and agreement regarding their respective rights with respect to amounts recovered through payments received after a Triggering Event (as defined in Section 5(b) below) and proceeds of the Collateral.

E. Capitalized terms used herein without being defined shall have the meanings set forth in the Debentures, Security Documents and/or Memorandum.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and the mutual covenants and promises set forth herein, each of the parties to this Agreement agrees as follows:

1. Sharing.

(a) The liens of the Collateral Agent relating to the Collateral shall be held by the Collateral Agent for the benefit of the Benefitted Parties, and any proceeds realized in respect thereof shall be shared by the Benefitted Parties and distributed in accordance with the rights and priorities set forth in this Agreement. Any Collateral Proceeds, Triggering Event Balances or Triggering Event Payments (as such terms are defined in Section 2(b)) shall be shared by the Benefitted Parties and distributed in accordance with the rights and priorities set forth in this Agreement.

2. Cash Collateral Account; Application of Proceeds.

(a) The Collateral Agent has established an interest-bearing demand deposit cash collateral account (the “Cash Collateral Account”) in the name of the Collateral Agent for the ratable benefit of the Benefitted Parties into which the proceeds, payments and amounts described in subsections (b)(i), (b)(ii), and (b)(iii) below shall be deposited and from which only the Collateral Agent may effect withdrawals.

(b) The following proceeds, payments and amounts shall be deposited and held by the Collateral Agent in the Cash Collateral Account and shall be distributed from time to time by the Collateral Agent in accordance with Section 2(c) below:

(i) any proceeds of any collection, recovery, receipt, appropriation, realization or sale of any or all of the Collateral or the enforcement of any Debenture (including acceleration) or any Security Documents (the “Collateral Proceeds”) received by the Collateral Agent;

(ii) any amounts held in the Cash Collateral Account at the time a Triggering Event occurs (the “Triggering Event Balances”); and

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(iii) any payments received or otherwise realized by any Benefitted Party in respect of any Obligations on or after the date on which a Triggering Event has occurred (the “Triggering Event Payments”).

Each Benefitted Party agrees to deliver any Collateral Proceeds and any Triggering Event Payments to the Collateral Agent within two (2) Business Days after receipt (other than pursuant to subsection (c) below) of such Collateral Proceeds or Triggering Event Payments.

(c) The Collateral Agent shall distribute the proceeds described in subsections (b)(i), (b)(ii), and (b)(iii) above which are held in the Cash Collateral Account to the Collateral Agent and the Benefitted Parties in accordance with the following priorities:

first, to the reasonable costs and expenses of the Collateral Agent incurred in connection with the maintenance of the Cash Collateral Account and any collection, recovery, receipt, appropriation, legal proceeding (whether by or against any such party), realization or sale of any or all of the Collateral or the enforcement of any Secured Debt or any Security Document;

second, after payment in full of all amounts set forth in item first, to the Benefitted Parties in payment of any and all amounts owed to the Benefitted Parties for reimbursement of amounts paid by them to the Collateral Agent in accordance with Section 4(g) pro rata in proportion to such amounts owed to such Benefitted Parties;

third, after payment in full of all amounts set forth in item second, to the payment and permanent reduction of the principal amount of the outstanding Obligations, pro rata, based on the proportion that the principal amount of such outstanding Obligations held by each Benefitted Party at such time bears to the sum of the principal amount of all such Obligations;

fourth, after payment in full of all amounts set forth in item third, to the payment and permanent reduction of the amount of the outstanding Obligations representing interest, pro rata, based on the proportion that such outstanding Obligations representing interest held by each Benefitted Party at such time bears to the sum of all such Obligations representing interest; and

fifth, after payment in full of all amounts set forth in item fourth, to or at the direction of the Company or as a court of competent jurisdiction may otherwise direct.

The Collateral Agent shall make such distributions promptly after the deposit of any Collateral Proceeds, Triggering Event Balances, or Triggering Event Payments into the Cash Collateral Account. A Benefitted Party's pro rata share of the Obligations on any distribution date shall be determined by assuming that all Obligations are denominated in U.S. Dollars based upon the quoted spot rate at which the Collateral Agent's principal office offers to exchange any applicable currency for U.S. Dollars at 11:00 A.M. (local time at such principal office) on the Business Day preceding such distribution date (the “Applicable Exchange Rate”). For any distribution, the Collateral Agent shall exchange the relevant portion of such distribution into the applicable currency and make each such distribution in the applicable currency.

3. Payment of Obligations; Distributions Recovered.

(a) The Company agrees that any amounts received by a Benefitted Party and delivered by

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such Benefitted Party to the Collateral Agent pursuant to the terms of this Agreement will not be deemed to be a payment in respect of any Obligations owing to such Benefitted Party until such Benefitted Party receives its pro rata share of such amount from the Collateral Agent and then only to the extent of the actual payment and receipt of such pro rata share.

(b) Notwithstanding anything to the contrary contained in this Agreement, in each case in which any proceeds (or the value thereof) or payments are recovered as a preferential or otherwise voidable payment (whether by a trustee in bankruptcy or otherwise) from the party (the “Distributor”) which distributed those proceeds to another party or parties under this Agreement, each party (a “Distributee”) to whom any of those proceeds were ultimately distributed shall, upon the Distributor's notice of the recovery to the Distributee, return to the Distributor an amount equal to the Distributee's ratable share of the amount recovered, together with a ratable share of interest thereon to the extent the Distributor is required to pay interest thereon computed on the amount to be returned from the date of the recovery. For purposes of this Section 3(b), “proceeds” means any payment (whether made voluntarily or involuntary) from any source, including, without limitation, any offset of any deposit or other indebtedness, any security (including, without limitation, any guaranty or any collateral) or otherwise.

4. The Collateral Agent.

(a) By execution and delivery hereof, each Benefitted Party hereby appoints Mick & Associates, P.C., LLO as Collateral Agent and its representative hereunder, under the Security Documents and authorizes the Collateral Agent to act as such hereunder and thereunder on behalf of each such Benefitted Party. In consideration of the fees and expenses set forth on Exhibit B payable by the Company and for which all Benefitted Parties shall be severally responsible, the Collateral Agent agrees to act as such upon the express conditions contained in this Agreement. In performing its functions and duties under this Agreement and the Security Documents, the Collateral Agent shall act solely as agent of the Benefitted Parties to the extent, but only to the extent, provided in this Agreement and does not assume, and shall not be deemed to have assumed, any obligation towards or relationship of agency, fiduciary or trust with or for any other Person, other than as set forth in the Security Documents.

(b) The Collateral Agent shall take any action with respect to any Secured Debt or any Security Document only as directed in accordance with Section 5(c) hereof; provided that the Collateral Agent shall not be obligated to follow any directions given in accordance with Section 5(c) hereof to the extent that the Collateral Agent has received advice from its counsel to the effect that such directions are in conflict with any provisions of law, this Agreement, the applicable Debenture, the applicable Security Document or any order of any court or administrative agency; provided further that the Collateral Agent shall not, under any circumstances, be liable to any Benefitted Party or any other person for following the written directions received in accordance with Sections 5(a) or 5(c) hereof. Any directions given pursuant to Section 5(c) hereof may be withdrawn or modified by the party or parties who originally gave such directions by delivering written notice of withdrawal or modification to the Collateral Agent prior to the time when the Collateral Agent takes any action pursuant to such directions.

(c) Each Benefitted Party authorizes the Collateral Agent to take such action on such Benefitted Party's behalf and to exercise such powers hereunder as are specifically delegated to the Collateral Agent by the terms hereof and of the Security Documents, together with such powers as are reasonably incidental thereto. The Collateral Agent shall have only those duties and responsibilities that are expressly specified in this Agreement and the Security Documents, and it may perform such duties by or through its agents or employees. Nothing in this Agreement, any Secured

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Debt or any Security Document, express or implied, is intended to or shall be construed as imposing upon the Collateral Agent any obligations in respect of this Agreement or such Secured Debt or Security Document except as expressly set forth herein.

(d) The Collateral Agent shall not be responsible to any Benefitted Party for the execution, effectiveness, genuineness, validity, perfection, enforceability, collectibility, value or sufficiency of the Collateral, the Secured Debt or the Security Documents or for any representations, warranties, recitals or statements made in any document executed in connection with the Obligations or made in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by or on behalf of the Company to any Benefitted Party.

(e) The Collateral Agent shall not be liable to any Benefitted Party for any action taken or omitted hereunder or under any Secured Debt or any Security Document or in connection herewith or therewith except to the extent caused by the Collateral Agent's fraud, gross negligence or willful misconduct. The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any written statement, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons and, except as otherwise specifically provided in this Agreement, shall be entitled to rely upon the written direction of the Required Creditors (as defined in Section 5(b)) certifying that the persons signing such direction constitute the "Required Creditors," and shall be entitled to rely and shall be fully protected in relying on opinions and judgments of counsel, accountants, experts and other professional advisors selected by it in good faith and with due care. The Collateral Agent shall be entitled to refrain from exercising any power, discretion or authority vested in it under this Agreement, any Secured Debt or any Security Documents unless and until it has obtained the directions in accordance with Section 5(b) hereof with respect to the matters covered thereby. The Collateral Agent shall be entitled to request from each Benefitted Party a certificate setting out the amount of the respective Obligations held by it (including, without limitation, amounts representing principal or interest of such Obligations for purposes of calculating distributions pursuant to Section 2(c)).

(f) Each Benefitted Party agrees not to take any action whatsoever to enforce any term or provision of the Secured Debt or the Security Documents or to enforce any of its rights in respect of the Collateral, in each case except through the Collateral Agent acting in accordance with this Agreement.

(g) The Company, by its execution of the signature page of this Agreement, agrees to pay and save the Collateral Agent harmless from liability for payment of all costs and expenses of the Collateral Agent in connection with this Agreement and the Security Documents, other than liabilities, costs and expenses resulting from the Collateral Agent's fraud, gross negligence, willful misconduct or breach of the express terms of this Agreement. Each Benefitted Party severally agrees to indemnify the Collateral Agent, pro rata (to the extent set forth in the penultimate sentence of this Section 4(g)), to the extent the Collateral Agent shall not have been reimbursed by or on behalf of the Company or from proceeds of the Collateral or otherwise, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, reasonable expenses (including, without limitation, reasonable counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent in performing its duties hereunder or under the Secured Debt or the Security Documents in its capacity as the Collateral Agent in any way relating to or arising out of this Agreement, the Secured Debt, the Security Documents and/or the Collateral; provided that no Benefitted Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Collateral Agent's fraud, gross negligence, willful

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misconduct or breach of the express terms of this Agreement. For purposes of this Section 4(g), any pro rata calculation shall be on the basis of the outstanding principal amount of the Obligations (determined by assuming that all Obligations are denominated in U.S. Dollars based upon the Applicable Exchange Rate) held by or for each Benefitted Party at the time of the act, omission or transaction giving rise to the reimbursement or indemnity required by this Section 4(g). The provisions of this Section 4(g) shall survive the payment in full of all the Obligations and the termination of this Agreement and all other documents executed in connection with the Obligations.

(h) The Collateral Agent may resign at any time by giving thirty (30) days' prior written notice thereof to the Benefitted Parties and the Company, subject to the acceptance of its appointment by a successor Collateral Agent simultaneously with or prior to any resignation of the Collateral Agent. Upon any such notice of resignation, the Required Creditors (as defined in Section 5(c) below) shall have the right to appoint a successor Collateral Agent. The Collateral Agent may be removed at any time with or without cause, by an instrument in writing delivered to the Collateral Agent, the Company and the other Benefitted Parties by the Required Creditors. The Company must remove the Collateral Agent and appoint a successor Collateral Agent if: (i) the Collateral Agent is adjudged to be bankrupt or insolvent; or (ii) a receiver or other public officer takes charge of the Collateral Agent or its property. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Collateral Agent, and the retiring or removed Collateral Agent shall be discharged from its duties and obligations under this Agreement and the Security Documents; provided, however, that the retiring or removed Collateral Agent will continue to remain liable for all acts of, or the omission to act by, such retiring or removed Collateral Agent which occurred prior to such retirement or removal. If no successor Collateral Agent shall have been so appointed and shall have accepted such appointment within forty-five (45) days after the retiring Collateral Agent's giving of notice of resignation, then, upon five days' prior written notice to the Company and the Benefitted Parties, the retiring Collateral Agent may, on behalf of the Benefitted Parties, appoint a successor Collateral Agent, which shall be a bank or trust company organized under the laws of the United States or any state thereof (or under the laws of a foreign country and having a branch or agency located in the United States) having a combined capital and surplus of at least $500,000,000, and the short term unsecured debt obligations of which are rated at least P-1 by Moody's Investors Service or A-1 by Standard & Poor's, or any affiliate of such bank. After any retiring or removed Collateral Agent's resignation or removal hereunder as Collateral Agent, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent under this Agreement and the Security Documents.

(i) Except as expressly set forth herein, the Collateral Agent and each of its affiliates may accept deposits from, lend money to and generally engage in any kind of banking, trust or financial advisory business or any other business with the Company, or any affiliate thereof, and may accept fees and other consideration from the Company or any affiliate thereof for services in connection with this Agreement and otherwise without having to account for the same to any Benefitted Parties.

(j) The Collateral Agent shall not be liable for or by reason of (i) any failure or defect in the registration, filing or recording of any of the Security Documents, or any notice, caveat or financing statement with respect to the foregoing, (ii) any failure to do any act necessary to constitute, perfect and maintain the priority of the security interest created by the Security Documents, or (iii) for the Company’s use of proceeds from the sale of the Secured Debt, except as results from the Collateral Agent’s own fraud, gross negligence or willful misconduct.

(k) Notwithstanding anything to the contrary contained in this Agreement or any document

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executed in connection with any of the Obligations, the Collateral Agent, unless it shall have actual knowledge thereof through its own investigation pursuant to Section 5(g) or otherwise, shall not be deemed to have any knowledge of any Event of Default unless and until it shall have received written notice from the Company or any Benefitted Party describing such Event of Default in reasonable detail (including, to the extent known, the date of occurrence of the same).

(l) Upon receipt by the Collateral Agent of any direction by the Required Creditors, all of the Benefitted Parties will be bound by such direction.

(m) All original documents pertaining to the Company Pledge Agreement and the other Security Documents shall be retained by Collateral Agent for safekeeping; provided the Collateral Agent shall cancel and return such documents to the Company upon satisfaction of the obligations under the Secured Debt or upon a release of the applicable Collateral in accordance with this Agreement.

(o) Each Benefitted Party covenants to reimburse the Collateral Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Collateral Agent in the administration or execution of the collateral agency hereby created (including the fees and expenses payable as set forth on Exhibit B and the reasonable compensation and the disbursements of its counsel and all other advisers and assistants not regularly in its employ), to the extent not paid or reimbursed by or on behalf of the Company or recovered by the Collateral Agent from the Collateral Cash Account or from the proceeds of the Collateral or otherwise, both before any Triggering Event and thereafter until all duties of the Collateral Agent hereunder shall be finally and fully performed except any such expense, disbursement or advance as may arise out of or result from the Collateral Agent's fraud, gross negligence or willful misconduct.

5. Remedies.

(a) If an Event of Default (as such term is defined in any Debenture) shall occur and be continuing and has not been waived, the Collateral Agent, at the direction of the Benefitted Parties holding, in the aggregate, more than one-third (33.33%) of the then outstanding principal amount of the Obligations excluding any outstanding principal amount of the Obligations held by an affiliate of the Company (such amounts to be determined by assuming that all such Obligations are denominated in U.S. Dollars based upon the Applicable Exchange Rate), shall declare the unpaid principal amount of the outstanding Obligations together with any accrued interest thereon to be due and payable immediately by notice in writing to the Company, the Collateral Agent and the Benefitted Parties, as applicable, specifying the Event of Default and that it is a “notice of acceleration;” provided, however, if an Event of Default specified in Section 10(iii) of the Debenture occurs and is continuing, then all of the unpaid principal amount of the outstanding Obligations together with any accrued interest thereon shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Collateral Agent or the Benefitted Parties. At any time after the declaration of acceleration with respect to the Obligations as described in the preceding sentence, the Required Creditors (as defined in Section 5(c)) may rescind and cancel such declaration and its consequences if: (1) the rescission would not conflict with any judgment or decree; (2) if all existing Events of Default have been cured or waived except nonpayment of principal or accrued interest that has become due solely because of the acceleration; (3) to the extent payment of such interest is lawful, penalty interest under the Secured Debt, which has become due otherwise than by such declaration of acceleration, has been paid; and (4) in the event of a cure or waiver of an Event of Default specified in Section 10(iii) of the Secured Debt, the Collateral Agent has received a certificate of an authorized officer of Bluerock that such Event of Default has been cured or waived.

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The Required Creditors may waive any existing Event of Default and its consequences (e.g., acceleration or the charging of penalty interest), except a default in the payment of the principal or interest on any Secured Debt.

(b) As soon as practicable after the Collateral Agent has actual knowledge of an Event of Default (as such term is defined in any Secured Debt), the Collateral Agent shall cause a notice to be issued to the Benefitted Parties seeking their affirmative vote to declare that a Triggering Event has occurred. The Benefitted Parties may also seek to declare a Triggering Event without prior notice from the Collateral Agent. If the Benefitted Parties do not elect to declare a Triggering Event in accordance with this Section 5(b), the Collateral Agent may, in its sole discretion, issue similar notices for votes of the Benefitted Parties as required by Section 5(b)(2), but only during the pendency of the Event of Default and not more frequently than every 90 days. As used herein, a “Triggering Event”

shall be deemed to have occurred upon both (1) the occurrence and continued existence of an Event of Default; and (2) the affirmative vote by Benefitted Parties holding, in the aggregate, more than one-third (33.33%) of the then outstanding principal amount of the Obligations excluding any outstanding principal amount of the Obligations held by an affiliate of the Company (such amounts to be determined by assuming that all such Obligations are denominated in U.S. Dollars based upon the Applicable Exchange Rate), giving the Collateral Agent written notice of their intention to instruct the Collateral Agent to exercise the rights and remedies under this Agreement, any Secured Debt or any Security Document as to the Collateral following such Event of Default so long as it is continuing and has not been waived.

(c) The Required Creditors may, after any Triggering Event has occurred and by giving the Collateral Agent written notice of such election, specifically instruct and cause the Collateral Agent to exercise any one or more of the rights and remedies under this Agreement, any Secured Debt or any Security Document or to realize upon any or all of the Collateral, including without limitation the time, method and place of conducting such action for the benefit of all Benefitted Parties (a “Required Action”). The Collateral Agent shall follow the instructions of the Required Creditors with respect to the Required Action to be taken. For purposes of this Agreement, the term “Required Creditors” shall mean the Benefitted Parties holding, in the aggregate, more than fifty percent (50%) of the then outstanding principal amount of the Obligations, excluding any outstanding principal amount of the Obligations held by an affiliate of the Company (such amounts to be determined by assuming that all such Obligations are denominated in U.S. Dollars based upon the Applicable Exchange Rate).

(d) Except as provided in Section 5(a), the Collateral Agent shall not commence or otherwise take any action or proceeding to exercise its rights and remedies under this Agreement, any Secured Debt or any Security Document or to realize upon any or all of the Collateral unless and until the Collateral Agent has received instructions in accordance with Section 5(c) above. Upon receipt by the Collateral Agent of any such instructions as to a Required Action, the Collateral Agent shall use its commercially reasonable efforts to exercise the rights and remedies in accordance with such instructions and shall be entitled to make demand and institute judicial proceedings in equity or law for the collection of all amounts then payable under the Obligations, whether by declaration or otherwise, realize upon any or all of the Collateral, enforce judgments obtained and collect from the Company moneys adjudged due; provided that the Collateral Agent shall not be obligated to follow any such directions as to which the Collateral Agent has received a written opinion of its counsel to the effect that such directions are in conflict with any provisions of law, this Agreement, any Secured Debt, any Security Document or any order of any court or administrative agency, and the Collateral Agent shall not, under any circumstances, be liable to any Benefitted Party or any other Person for

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following the written directions received in accordance with Section 5(c) above.

(e) The duties and responsibilities of the Collateral Agent with respect to instructions delivered by the Required Creditors pursuant to Section 5(c) shall consist of and be limited to (i) selling, releasing, surrendering, realizing upon or otherwise dealing with, in any manner and in any order, all or any portion of the Collateral, (ii) exercising or refraining from exercising any rights, remedies or powers of the Collateral Agent under this Agreement, any Secured Debt or any Security Document or under applicable law in respect of all or any portion of the Collateral, (iii) making any demands or giving any notices under this Agreement, any Secured Debt or any Security Document, (iv) effecting amendments to and granting waivers under this Agreement, any Secured Debt or any Security Document in accordance with the terms hereof, (v) maintaining the Cash Collateral Account under its exclusive dominion and control for the ratable benefit of the Benefitted Parties and making deposits therein and withdrawals therefrom as necessary to effect the provisions of this Agreement, and (vi) with respect to a foreclosure of Bluerock Collateral, causing the transfer books of the Company to reflect the transferee/owner of the Bluerock Collateral, and if the Collateral Agent is the record owner of the Bluerock Collateral, manage the Company and its manager for the benefit of the Benefitted Parties until the appointment of a new manager of the Company or its manager.

(f) In the event that the Collateral Agent proceeds to foreclose upon, collect, sell or otherwise dispose of or take any other action with respect to any or all of the Collateral or to enforce any provisions of the Security Documents or takes any other action pursuant to this Agreement, any Secured Debt or any provision of any Security Document or requests directions from the Required Creditors as provided herein, upon the request of the Collateral Agent or any Benefitted Parties, each of the Benefitted Parties agrees that such Benefitted Party (or any agent of or representative for such Benefitted Party) shall promptly notify the Collateral Agent in writing, as of any time that the Collateral Agent may specify in such request, (i) of the aggregate amount of the respective Obligations then owing to such Benefitted Party as of such date and (ii) such other information as the Collateral Agent may reasonably request.

(g) Collateral Agent agrees to use its commercially reasonable efforts to investigate and determine if an Event of Default has occurred. Each Benefitted Party hereby authorizes the Collateral Agent to make such investigation on their behalf, including, but not limited to, obtaining written evidence from the Company and Bluerock that any Obligations as and when due have been satisfied and that such parties are in compliance with the Security Documents, as applicable, inspecting the books and records of such parties and requiring an accounting of one or more of the parties. In addition to the compliance certificate required by Section 11(g), the Company and Bluerock each agree to: (a) provide Collateral Agent with (i) written evidence of the satisfaction of Obligations as and when due and compliance with the Security Documents, (ii) Internet access to the bank accounts of the Company solely for purposes of monitoring balances and transactions (and specifically not for withdrawals), (iii) information and documentation related to each Loan, including the appraisal used to determine the leverage limit set forth in Section 10(d) of this Agreement, and (iv) access upon reasonable notice to their respective books and records, including the Debentures register and Loan payment records, of the Company, provided, that, absent good reason, such physical access shall not be permitted more frequently than once every six months; (b) to perform an accounting, at the written request and cost of the Collateral Agent, of the Company, provided, that, absent good reason, an accounting from the Company shall not be required more frequently than once every six months; and (c) otherwise comply in a reasonable manner with the Collateral Agent’s investigation pursuant to this Section 5(g). The failure of the Company or Bluerock to abide by this Section 5(g) shall constitute a breach of this Agreement if not cured within thirty (30) business days after written notice from the

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Collateral Agent, provided, that, if such failure is subject to cure but cannot be cured within such thirty (30) day period, this Agreement shall not be deemed breached by reason of such failure if the Company or Bluerock promptly commences, and diligently pursues, the curing of such failure. After the occurrence of a Triggering Event, Collateral Agent shall, as requested in writing by the Required Creditors, audit, review or examine the Company’s records at the Company’s sole cost and expense, provided that such audit, review or examination of records shall be made at the respective locations where the Company’s records are kept. Promptly after the Collateral Agent receives written notice of the occurrence of any Event of Default or becomes aware of an Event of Default through its investigation under this Section 5(g), it shall promptly notify each of the Benefitted Parties. The Company may also engage the Collateral Agent to provide monitoring services that are complementary to or exceed the duties of the Collateral Agent provided in this Section 5(g) (the “Monitoring Services Engagement”) and the fees and expenses payable by the Company to the Collateral Agent as set forth on Exhibit B shall apply to cover any and all services provided by the Collateral Agent under the Monitoring Services Engagement; provided, that a breach, default or termination of the Monitoring Services Agreement by any party thereto will not constitute a breach of or event of default under this Agreement, any Secured Debt or any Securities Document or have any effect under this Agreement, any Secured Debt or any Security Document. 6. Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and their respective successors and assigns, and no other person or entities are intended to be third party beneficiaries hereunder or to have any right, benefit, priority or interest under, or shall have any right to enforce this Agreement.

7. Relation of Benefitted Parties. This Agreement is entered into solely for the purposes set forth herein, and no Benefitted Party assumes any responsibility to any other party hereto to advise such other party of information known to such other party regarding the financial condition of the Company or of any other circumstances bearing upon the risk of nonpayment of any Obligation. Each Benefitted Party specifically acknowledges and agrees that nothing contained in this Agreement is or is intended to be for the benefit of the Company or Bluerock and nothing contained herein shall limit or in any way modify any of the Obligations of the Company to the Benefitted Parties.

8. Notice of Event of Default. Each Benefitted Party and the Company agree that upon the occurrence of an Event of Default of which it has actual knowledge, it shall promptly notify the Collateral Agent of the occurrence of such Event of Default. Upon the Collateral Agent’s actual knowledge of an Event of Default, it shall promptly provide notice thereof to the Company and each Benefitted Party. In addition, each Benefitted Party agrees to provide to the Collateral Agent the amount and currency of its Obligations at such reasonable times as may be necessary to determine such Benefitted Party’s pro rata share of the outstanding principal amount and interest of the Obligations.

9. Security Documents. Concurrently herewith, the Company has executed and delivered to Collateral Agent the Company Pledge Agreement and the Bluerock has executed and delivered to Collateral Agent the Bluerock Pledge Agreement. At the time a Loan is funded by the Company, the Company will concurrently enter into and deliver to Collateral Agent the Loan Security Documents for such Loan, and failure to do so shall constitute a breach of this Agreement if not cured within five (5) business days after written notice from the Collateral Agent.

10. Covenants of the Company. The Company covenants to the Collateral Agent and the Holders as follows, and a failure of the Company to abide by any covenant in this Section 10 shall constitute a breach of this Agreement if not cured within thirty (30) business days after written notice from the Collateral Agent, provided, that, if such failure is subject to cure but cannot be cured within

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such thirty (30) day period, this Agreement shall not be deemed breached by reason of such failure if the Company promptly commences, and diligently pursues, the curing of such failure.

(a) The Company shall do or cause to be done, at its own cost and expense, all things necessary to preserve and keep in full force and effect its existence as a limited liability company and the material rights (charter and statutory) of the Company, and shall not amend its Limited Liability Company Agreement in effect as of the date of this Agreement without the prior written consent of the Collateral Agent. Bluerock shall at all times be the sole member of the Company.

(b) The Company will not, directly or indirectly, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of any indebtedness other than Permitted Indebtedness. “Permitted Indebtedness” means, without duplication, each of the following: (1) the Secured Debt; (2) indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, that such indebtedness is extinguished within five (5) business days of incurrence; (3) indebtedness of the Company to the extent the net proceeds thereof are promptly used to redeem the Secured Debt in full in accordance with the Secured Debt; and (4) minor and incidental trade debt reasonably and actually incurred in the operation of its business.

(c) The Company will not, directly or indirectly, create, incur, assume or permit or suffer to exist any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (a “Lien”) against or upon any property or assets of the Company whether owned on the date of this Agreement or hereafter acquired, or any proceeds therefrom, or assign or otherwise convey any right to receive income or profits therefrom, except for Permitted Liens. “Permitted Liens” means (1) Liens for taxes, assessments or governmental charges or claims either (a) not yet delinquent or (b) contested in good faith by appropriate proceedings and as to which the Company shall have set aside on its books such reserves as may be required pursuant to U.S. GAAP; (2) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law or pursuant to customary reservations or retentions of title incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by U.S. GAAP shall have been made in respect thereof; (3) Liens upon specific items of inventory or other goods and proceeds of any person securing such person’s obligations in respect of bankers’ acceptances issued or created for the account of such person to facilitate the purchase, shipment or storage of such inventory or other goods; (4) Liens permitted under the deed of trust, mortgage, loan agreement or other loan documents for each Loan, or otherwise contractually subordinated to the lien of such Loan; (5) Liens securing the Secured Debt and all other obligations under this Agreement; and (6) Liens in favor of the Company.

(d) The Company shall not make any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable) or other extensions of credit (including guarantees or other similar arrangements) or capital contribution to any person (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition for value of capital stock or other equity interests, indebtedness or other similar instruments in any person, other than Loans. Each Loan will be approved by the Investment Committee of the Company prior to funding. Each Loan will: (1) be secured by a first position mortgage, deed of trust or deed to secure debt on real estate; (2) at the date of the Loan closing, have a maximum loan to collateral value ratio that does not exceed 75% based on the appraised value of the real estate provided in an appraisal report dated within sixty (60) days of

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the Loan closing and prepared by a nationally or regionally prominent appraiser certified and in good standing as a Member of the Appraisal Institute (an “Appraisal”); and (3) a promissory note with an initial maturity no longer than six (6) months from the date of the Loan closing; provided, however, in the sole discretion of the Company, such maturity date may be extended for an additional six (6) months if at the time of the extension, the Loan is in good standing and free from defaults, and that, if the maturity date of the promissory note is extended past the extended maturity date, the Loan must be re-underwritten and approved by the investment committee of the Company and otherwise meet the criteria set forth in this Section 10(d) (subject to the borrower contributing additional cash collateral to bring the Loan into compliance with the maximum loan-to-value limitation).

(e) Upon attaining the minimum offering amount for the offering of any Secured Debt, the Company will deposit all gross proceeds of the such offering received by it or its escrow agent for the offering of the Secured Debt into a trust account established for the benefit of the Benefitted Parties (the "Trust Account”). The Company will only withdraw and disburse funds from the Trust Account for the purposes of: (1) funding and servicing the Loans; (2) the application of the gross proceeds of the offering and sale of the Secured Debt as described in the Memorandum and any other associated private placement memorandum; (3) expenditures as permitted under the Limited Liability Company Agreement of the Company; (4) making payments of interest and principal to the Benefitted Parties, as and when due, whether as scheduled or due to acceleration; provided, that the Company may establish and disburse funds to a separate interest account to facilitate such payments; and (5) distributions of Company profits to Bluerock. Unless and until the Collateral Agent provides notice to the Company that a Triggering Event has occurred, the Company shall have the right to access the Trust Account, including a right of deposit, withdrawal and disbursement. Upon notice of a Triggering Event, the Company will have no right to access the Trust Account without the prior written consent of the Collateral Agent. Any and all interest earned on amounts held in the Trust Account pending disbursement shall be retained by the Company in the Trust Account.

(f) The Company will not consummate an Asset Sale. “Asset Sale” means any direct or indirect sale, issuance, conveyance, transfer, lease, assignment or other transfer, whether or not for value, of any property or assets of the Company, other than the sale or transfer of Loans for consideration not less than the outstanding principal and interest with respect to such Loan and associated reserves. The funding of a Loan shall not constitute an “Asset Sale.”

(g) The Company will deliver to the Collateral Agent, within ninety (90) days after the end of each year, a certificate stating that:

(1) A review of the activities of the Company during the preceding fiscal year has

been made under the supervision of the signing officers with a view to determining whether the Company has kept, observed, performed and fulfilled their respective obligations under this Agreement; and

(2) As to each such officer signing the certificate, that to the best of his or her knowledge:

(i) The Company has kept, observed, performed and fulfilled in all material respects each and every covenant contained in this Agreement, the Secured Debt and the Security Documents and is not in default in the performance or observance of any of the terms, provisions and conditions of this Agreement, the Secured Debt and the Security Documents (or, if an Event of Default shall have

13

occurred, describing all such events of default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto); and

(ii) No event has occurred and remains in existence by reason of which

payments on account of the principal of or interest, if any, on the Secured Debt is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.

11. Meetings. The Collateral Agent, the Company or the Benefitted Parties holding not less than ten percent (10%) in aggregate principal amount of the outstanding Obligations may request in writing that the Collateral Agent call a meeting of Benefitted Parties to take any action to be taken by the Benefitted Parties provided for under this Agreement.

12. Miscellaneous.

(a) Notices. All notices and other communications provided for herein, (including, without limitation, any modifications of, or waivers or consents under this Agreement) shall be sent (i) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (ii) by registered or certified mail with return receipt requested (postage prepaid), or (iii) by a recognized overnight delivery service (with charges prepaid) to the intended recipient at the address for notices specified beneath the signature of such party hereto; or as to any party at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communication shall be deemed to have been duly given when actually received.

(b) Amendments, Waivers, Consents. The Collateral Agent and the Company may amend this Agreement, any Secured Debt or any Security Document without the consent of any Benefitted Party (i) to cure any ambiguity, defect or inconsistency in such document, or (ii) to make any change that does not materially adversely affect the rights of the Benefitted Parties. The Company and the Collateral Agent may amend this Agreement, any Secured Debt or any Security Document with the written consent of the Required Creditors, and the Required Creditors may waive compliance by the Company without notice to any Benefitted Party; provided, that, without the consent of each Benefitted Party adversely affected, an amendment or waiver may not: (s) reduce the amount of Secured Debt whose Benefitted Parties must consent to an amendment or waiver; (t) reduce the rate or extend the time for payment of interest on any Secured Debt; (u) reduce the principal amount of any Secured Debt or extend the maturity date of any Secured Debt beyond any permitted extension; (v) make any Secured Debt payable in money other than that stated in the applicable Secured Debt; or (w) materially modify or amend any duties or obligations of the Collateral Agent. Entry into a Security Document by the Collateral Agent shall not be construed as an amendment of this Agreement.

(c) Releases of Collateral. The parties hereto agree that the Collateral Agent shall release all or any portion of the Collateral (other than in connection with the exercise of its rights and remedies pursuant to Section 5) only upon the receipt by the Collateral Agent of (i) a written approval from the Required Creditors, or (ii) so long as no Event of Default exists, an officers’ certificate of Bluerock, which shall be true and correct, (x) stating that the Collateral subject to such release has been repaid in full or is being sold, transferred or otherwise disposed of in compliance with the terms of the applicable Security Document, and (y) specifying the Collateral being sold, transferred or otherwise disposed of in the proposed transaction. Upon the receipt of such written approval or

14

officers' certificates (so long as the Collateral Agent has no reason to believe that the officers' certificates delivered with respect to such disposition are not true and correct), the Collateral Agent shall, at the Company's expense, promptly execute and deliver such releases of its security interest in such Collateral to be released, and retain a copy of such releases. In connection therewith, the Benefitted Parties hereby irrevocably authorize the Collateral Agent from time to time to release such Collateral or consent to such release in accordance with the terms of this Agreement.

(d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. At the time of any assignment of all or any portion of the Obligations by a Benefitted Party, such assigning Benefitted Party, as the case may be, shall cause its assignee (each an “Additional Benefitted Party”) to execute a Counterpart Collateral Agency and Intercreditor Agreement substantially in the form attached hereto as Exhibit A (a “Counterpart”) and become a party to this Agreement.

(e) Execution by Benefitted Parties. Upon the execution of a Counterpart by any Benefitted Parties (either directly or through their agents duly appointed attorneys) and delivery of such Counterpart to the other parties hereto, such entity or entities shall be as fully a party to this Agreement as a Benefitted Party as if such entity or entities were an original signatory hereof without any action required to be taken by any other party hereto. Each other party to this Agreement expressly agrees that its rights and obligations arising hereunder shall continue after giving effect to the addition of such Benefitted Parties as parties to this Agreement.

(f) Captions. The captions and Section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

(g) Conflicts. In the event of a conflict between the terms of this Agreement and the terms of any Secured Debt or any of the Security Documents, the terms of this Agreement shall control.

(h) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together will constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart.

(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK .

(j) Merger. This Agreement and the Security Documents supersede all prior agreements, written or oral, among the parties with respect to the subject matter of such agreements.

(k) Independent Investigation. None of the Benefitted Parties, nor any of their respective directors, officers, agents or employees, shall be responsible to any of the others for the solvency or financial condition of the Company or the ability of the Company to repay any of the Obligations, or for the value, sufficiency, existence or ownership of any of the Collateral, or the statements of the Company, oral or written, or for the validity, sufficiency or enforceability of any of the Obligations or any document or agreement executed or delivered in connection with or pursuant to any of the foregoing. Each Benefitted Party has entered into its respective financial agreements with the Company based upon its own independent investigation, and makes no warranty or representation to the other, nor does it rely upon any representation by any of the others, with respect to the matters identified or referred to in this Section.

15

(1) Severability. In case any one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

(m) Effect of Bankruptcy or Insolvency. This Agreement shall continue in effect notwithstanding the bankruptcy or insolvency of any party hereto.

(n) Consent to Jurisdiction and Venue. The parties hereto hereby irrevocably (a) consent and submit to the exclusive in personam jurisdiction and venue of the Civil Branch of the Supreme Court of the State of New York, New York County or the U.S. District Court for the Southern District of New York, in any action or proceeding arising out of or in any way relating to this Agreement, any Secured Debt, or any of the Security Documents, (b) agree that all claims in respect of such action or proceeding may be heard and determined in such above-referenced state or federal court located in New York, (c) consent to the service of any and all process in any such action or proceeding by the mailing of copies of such process in conformity with the notice provision hereof, and (d) agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(o) WAIVER OF JURY TRIAL. COLLATERAL AGENT, COMPANY, AND THE BENEFITTED PARTIES, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT ANY MAY HAVE TO A TRAIL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY SECURED DEBT, OR ANY OF THE SECURITY DOCUMENTS, OR ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (VERBAL OR WRITTEN) OR ACTION OF ANY PARTY.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

COLLATERAL AGENT:

MICK & ASSOCIATES, P.C., LLO,

a Nebraska professional corporation By:

Name: Title:

Address for Notices: 11422 Miracle Hills Drive, Suite 401 Omaha, NE 68154 Attention: Bryan S. Mick Facsimile: 402-504-3951 COMPANY:

BR SENIOR SECURED DEBENTURE TRUST, LLC,

a Delaware limited liability company By: Bluerock Real Estate, LLC, its Sole Member

By:

Name: Jordan Ruddy Title: Chief Operating Officer

Address for Notices: 680 5th Avenue, 16th Floor New York, NY 10019 Attention: R. Ramin Kamfar Facsimile: (646) 278-4220

HOLDERS:

By: Name: Title:

Address for Notices: Attention: Facsimile:

By: Name: Title:

Address for Notices: Attention: Facsimile:

By: Name: Title:

Address for Notices: Attention: Facsimile:

THE UNDERSIGNED HEREBY ACKNOWLEDGES AND AGREES AND CONSENTS TO THE FOREGOING, INCLUDING, WITHOUT LIMITATION, SECTION 5(G).

BLUEROCK REAL ESTATE, LLC,

a Delaware limited liability company

By: Name: Jordan Ruddy Title: Chief Operating Officer Address for Notices: 680 5th Avenue, 16th Floor New York, NY 10019 Attention: R. Ramin Kamfar Facsimile: (646) 278-4220

A-1

EXHIBIT A

Counterpart Collateral Agency and Intercreditor Agreement

IN WITNESS WHEREOF, the undersigned has caused this Counterpart Collateral Agency and Intercreditor Agreement, dated as of ___________ (this "Counterpart"), to be duly executed and delivered by its duly authorized officer. Upon execution and delivery of this Counterpart, the undersigned shall be a Benefitted Party under the Collateral Agency and Intercreditor Agreement and shall be as fully a party to the Collateral Agency and Intercreditor Agreement as if such Benefitted Party were an original signatory to the Collateral Agency and Intercreditor Agreement.

[Name of Additional Holder]

By: Name:

Title:

B-1

EXHIBIT B

Fee Schedule

Collateral Agent shall be compensated by the Company at the rate of $5,000.00 per calendar quarter (first quarter pro-rated, beginning the date that the Offering escrow is broken and the Offering proceeds are distributed to the Trust Account). Such compensation shall cover all of the Collateral Agent’s costs and expenses under this Agreement and the Monitoring Services Engagement; provided however, Collateral Agent may at its option maintain detailed billing and expense records for its services (kept in the ordinary course and at the same hourly rates and pass-through expense costs normally charged in connection with its legal and due diligence expenses) and to the extent such billings and expenses exceed the quarterly payments above, then the Collateral Agent shall be compensated in that manner, but not to exceed $7,500.00 per calendar quarter. All such calculations shall be on a cumulative (not quarter-by-quarter) basis. Notwithstanding the foregoing, after the occurrence and during the continued pendency of a Triggering Event, the $7,500.00 per quarter cap shall not apply. Compensation shall be paid to the Collateral Agent quarterly in arrears.

Exhibit C

Form of Secured 9.0% Secured Debentures

Form of Debenture

(Face of Debenture)

BR SENIOR SECURED

DEBENTURE TRUST, LLC

9.0% Senior Secured Debenture Date of Debenture: ________, 20__ Principal Amount of Debenture: $_________

BR SENIOR SECURED DEBENTURE TRUST, LLC promises to pay to _______________________________________________________________ or its registered assigns, the principal sum of ______________________________________ U.S. Dollars on ___________, 20__. Interest payment dates: by the fifteenth day of the month following the end of each calendar month, or if any such day is not a business day, on the next succeeding business day. Record Dates: the final day of each calendar month. Dated as of _______________, 20___ BR SENIOR SECURED DEBENTURE TRUST, LLC, a Delaware limited liability company By: Bluerock Senior Secured Debenture Trust Manager, LLC,

a Delaware limited liability company Its: Manager By: Name: Its:

(Back of Debenture)

9.0% Senior Secured Debenture This Debenture has not been registered under the Securities Act of 1933, as amended (the “Securities

Act”), and this Debenture may not be offered, sold, pledged or otherwise transferred except pursuant

to an effective Registration Statement or in accordance with an applicable exemption from the

registration requirements of the Securities Act (subject to the delivery of such evidence required

pursuant to the terms of this Debenture) and in accordance with any applicable securities laws of any

state of the United States or any other jurisdiction.

1. Interest. BR Senior Secured Debenture Trust, LLC, a Delaware limited liability company (the “Trust”), promises to pay interest on the principal amount of this debenture (the “Debenture”) at the rate of 9.0% per annum, non-compounding. Interest on this Debenture will begin to accrue on the date of the Debenture, and will be paid monthly by the fifteenth day of the month to the holder of record (the “Holder”) as of the close of business on the last day of the month preceding the month in which the interest payment date occurs. If the Trust exercises the extension option pursuant to Section 2, the Debenture will begin accruing interest on January 1, 2014 at an annual rate of 10.0%, non-compounding. Interest shall be computed on the basis of a year of 365 days and the actual number of days occurring in the monthly period for which payable. Upon the occurrence of an event of default, the Debentures will begin accruing interest at an annual rate of 2.0%, non-compounding, in excess of the then current interest rate on the Debentures. 2. Maturity. This Debenture will mature on December 31, 2013 (the “Maturity Date”). The Trust, in its sole discretion, may extend the Maturity Date of the Debentures for up to one additional year without prior written notice to the Holder. Principal and any unpaid interest shall be due and payable in full at the Maturity Date or earlier redemption. 3. Cross-Defaulted. This Debenture is being issued to the Holder pursuant to the terms set forth in the Trust’s Confidential Private Placement Memorandum dated April 30, 2009, as amended or supplemented from time to time (the “Memorandum”). Pursuant to the Memorandum, the Trust may also issue additional debentures, including debentures with different maturities and coupon rates, that are pari

passu in right of payment to the Debenture (the “Additional Debentures,” and collectively with the Debentures, the “Debentures”). The Debenture is cross-defaulted with any Additional Debentures, and the collateral described in Section 5 of this Debenture will serve as collateral for all of the Debentures for the benefit of all holders of the Debentures (the “Holders”). Each of the Debentures shall be pari passu with each of the other Debentures with respect to all rights and preferences of such Debentures.

4. Redemption. This Debenture may be redeemed by the Trust in its sole and absolute discretion, in whole or in part, at any time upon at least 30 days notice to the Holders after December 31, 2010, without premium or penalty. If less than all the Debentures are to be redeemed, the Debentures will be redeemed on a pro rata basis. Debentures called for redemption become due and payable on the redemption date at an amount equal to the applicable pro rata portion of the outstanding principal amount thereof plus accrued but unpaid interest. At least 30 days before a redemption date, the Trust will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder at its registered address. The notice will state: (a) the redemption date; (b) the redemption price; (c) if a partial redemption is being made, the portion of the interest and principal amount of the Debentures to be redeemed; and (d) such other procedures necessary to effect the redemption.

5. Collateral. Mick & Associates, P.C., LLO, a Nebraska professional corporation, will serve as the collateral agent (the “Collateral Agent”) for the benefit of the Holders, pursuant to a Collateral Agency Agreement by and among the Collateral Agent, the Trust and each Holder dated as of April 30, 2009 (the “Collateral Agency Agreement”), with respect to the following collateral (collectively, the “Collateral”):

a. Loan Collateral. The Trust shall collaterally assign all of the Trust’s rights in the first mortgages and deeds of trust and related collateral which the Trust will receive as security for its Loans, to include (a) all borrower promissory notes, (b) all mortgages and

deeds of trust secured by the underlying properties, which will be recorded, (c) all mortgagee title insurance policies, on which the Collateral Agent shall be named an additional insured, and (d) such other and additional loan documents and security instruments as an independent commercial mortgage lender would normally require at the closing of a similar loan. The Trust shall also pledge the borrower promissory note evidencing the Loan to the Collateral Agent for the benefit of the Holders pursuant to a Promissory Note Pledge and Security Agreement, both dated of even date with each respective Loan.

b. Trust Collateral. The Trust has pledged all of its assets, including any of the Trust’s bank and trust accounts (but excluding the mortgage documents and related security interests for each Loan, which will be separately assigned and pledged) (the “Trust Collateral”), to the Collateral Agent for the benefit of the Holders pursuant to that certain Pledge and Security Agreement made by the Trust to the Collateral Agent dated April 30, 2009. The Collateral Agent’s secured interest in the Trust Collateral will be perfected through the filing of UCC-1 financing statements in Delaware.

c. Bluerock Collateral. Bluerock Real Estate, LLC, a Delaware limited liability company (“BR”), the sole member of the Trust and of BR Senior Secured Debenture Trust Manager, LLC (“Manager”), has pledged all of its membership interests in the Trust and the Manager (the “Bluerock Collateral”) to the Collateral Agent for the benefit of the Holders pursuant to that certain Pledge and Security Agreement made by BR to the Collateral Agent dated April 30, 2009. The Collateral Agent’s secured interest in the Bluerock Collateral will be perfected through the filing of UCC-1 financing statements in Delaware.

Collectively, these pledge and security agreements are referred to the “Security Documents.” Upon a Triggering Event under the Collateral Agency Agreement, the Collateral Agent will have the right, among other remedies, to foreclose on the Collateral on behalf of the Holders upon an affirmative vote by Holders holding, in the aggregate, more than 50% of the then outstanding principal amount of the Debentures, excluding any outstanding principal amount of the Debentures held by affiliates of the Trust. 6. Method of Payment. Payments of principal and interest will be made by check mailed to the Holder at its address set forth in the Trust’s records, provided, however, for an additional transfer fee, such payment by wire or ACH transfer of immediately available funds will be required with respect to principal of, and interest on, this Debenture, for which the Holder shall have provided wire or ACH transfer instructions to the Trust. All payments shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 7. Debenture Registrar. The Trust will act as registrar for the Debentures. 8. Persons Deemed Owners. The registered Holder of this Debenture will be treated as its owner for all purposes. 9. No Recourse Against Others. A manager, member, officer or employee of the Trust or the Manager, as such, shall not have any liability for any obligations of the Trust under the Debentures or for any claim based on, in respect of, or by reason of, such obligations or their creation. By accepting this Debenture, the Holder waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Debentures.

10. Defaults. “Events of Default” include: (i) a failure to pay interest when due on any Debenture, if such default continues for thirty (30) days after the applicable interest payment date; (ii) a failure to repay principal on any Debenture at the Maturity Date or by declaration of acceleration, notice of redemption or otherwise, as applicable; (iii) an event of bankruptcy with respect to the Trust; or (iv) a breach by the Trust in any material respect, after applicable grace periods, if any, of (a) the Collateral Agency Agreement, (b) any Debenture, (c) any Security Documents, or (d) the “single purpose entity”

provisions of the Trust’s Limited Liability Trust Agreement. Upon the occurrence of an Event of Default, the Debentures will begin accruing interest at an annual rate of 2.0%, non-compounding in excess of the then-current interest rate on the Debentures until cured, if curable. Holders holding more than 50% of the then aggregate outstanding principal amount of the Debentures (excluding any outstanding principal amount of the Debentures held by affiliates of the Trust) may waive any existing Event of Default and its consequences, except a default in the payment of the principal or interest on any Debenture, in which event any such waiver will bind all Holders of the Debentures (the “Required Holders”).

11. Acceleration. If an Event of Default shall occur and be continuing and has not been

waived, the Collateral Agent, at the direction of the Holders holding, in the aggregate, more than one-third (33.33%) of the then outstanding principal amount of the Debentures excluding any outstanding principal amount of the Debentures held by an affiliate of the Trust, shall declare the unpaid principal amount of the outstanding Debentures together with any accrued interest thereon to be due and payable immediately by notice in writing to the Trust, the Collateral Agent and the Holders, as applicable, specifying the Event of Default and that it is a “notice of acceleration;” provided, however, if an Event of Default specified in Section 10(iii) of the Debenture occurs and is continuing, then all of the unpaid principal amount of the outstanding Obligations together with any accrued interest thereon shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Collateral Agent or the Holders. At any time after the declaration of acceleration with respect to the Debentures as described in the preceding sentence, Holders holding, in the aggregate, more than 50% of the then outstanding principal amount of the Debentures (excluding any outstanding principal amount of the Debentures held by affiliates of the Trust) may rescind and cancel such declaration and its consequences if: (1) the rescission would not conflict with any judgment or decree; (2) all existing Events of Default have been cured or waived except nonpayment of principal or accrued interest that has become due solely because of the acceleration; (3) to the extent payment of such interest is lawful, penalty interest under the Debenture, which has become due otherwise than by such declaration of acceleration, has been paid; and (4) in the event of a cure or waiver of an Event of Default specified in Section 10(iii) of the Debenture, the Collateral Agent has received a certificate of an authorized officer of Bluerock that such Event of Default has been cured or waived.

12. Other Remedies. Upon the occurrence of an Event of Default, the Holders may elect to

declare a Triggering Event; as used herein, a “Triggering Event” shall be deemed to have occurred upon both (1) the occurrence and continued existence of an Event of Default; and (2) the affirmative vote by Holders holding, in the aggregate, more than one-third (33.33%) of the then outstanding principal amount of the Debentures excluding any outstanding principal amount of the Debentures held by an affiliate of the Trust, giving the Collateral Agent written notice of their intention to instruct the Collateral Agent to exercise the rights and remedies under the Collateral Agency Agreement, any Debenture or any Security Document as to the Collateral following such Event of Default. The Required Holders may, after any Triggering Event has occurred and by giving the Collateral Agent written notice of such election, specifically instruct and cause the Collateral Agent to exercise any one or more of the rights and remedies under the Collateral Agency Agreement, any Debenture or any Security Document or to realize upon any or all of the Collateral, including without limitation the time, method and place of conducting such action.

13. Liability. This Debenture is an obligation of the Trust solely and is not an obligation of BR or of any of its members, officers or employees. Neither BR nor any member, officer or employee of BR shall have any liability for the payment of the Debentures or for any of the Trust’s obligations. The Holder shall look exclusively to the Trust and the Collateral and not to BR or any of its members, officers or employees for satisfaction of all such obligations, and shall not seek to enforce any deficiency for payment thereof against them or seek to collect payment thereof against them.

14. Transfers. No Holder shall have any right to assign or otherwise transfer all or any part of any Debenture without the express prior written consent of the Trust, which consent may be withheld in the sole discretion of the Trust. Without limiting the generality of the preceding sentence, the Trust may withhold consent to a proposed transfer unless the Trust determines that such proposed transfer is exempt from federal and state securities registration and that the proposed transferee and transferor have satisfied all the other conditions set forth below to the satisfaction of the Trust:

a. Such proposed transferor and transferee shall execute an approved form of assignment, including a counterpart to the Collateral Agency Agreement, and prepay all costs to be incurred by the Trust in connection with such proposed transfer, including attorneys’ fees and costs.

b. Such proposed transferee shall execute a subscription agreement to verify that the

proposed transferee satisfies the suitability requirements set forth in the “WHO MAY INVEST” section of the Memorandum, to represent that such proposed transferee has read the Memorandum, as supplemented, all subsequent reports of the Trust and the Trust’s financial statements, and is aware of, and assumes the risks of, investing in this Debenture as summarized in the “RISK FACTORS” section of the Memorandum.

c. The Trust shall have received, if the Trust so requests, an opinion of legal counsel,

satisfactory to the Trust in the Trust’s sole discretion, confirming that the proposed transfer is exempt from securities registration and the assignment is in proper legal form and enforceable against the proposed transferee.

An approved transferee shall take the place of the transferor on the effective date of the

transfer, as determined by the Trust, and, thereafter, the transferee shall be treated as the Holder and owner of the Debenture transferred for all purposes of this Debenture and the other transaction documents. The Trust need not exchange or register the transfer of any Debenture or portion of a Debenture selected for redemption, except for the unredeemed portion of any Debenture being redeemed in part. Also, the Trust need not exchange or register the transfer of any of the Debentures for a period of fifteen (15) days before a Debenture or portion of a Debenture is selected for redemption or during the period between the Record Date and the corresponding interest payment date.

15. Waiver. The Trust, for itself and for its successors, transferees, assigns, endorsers, and

signers, hereby waives all valuation and appraisement privilege, presentment and demand for payment, protest, dishonor and notice of dishonor, bringing of suit, lack of diligence and delays in collection or enforcement of this Debenture and notice of the intention to accelerate, the release of any party liable and the release of any security for the debt, the taking of any additional security and any other indulgence or forbearance. This Debenture may be extended or renewed from time to time without in any way affecting or diminishing the Trust’s liability under this Debenture.

16. Headings; Definitions. The subject headings or titles of paragraphs or sections of this Debenture are included for purposes of convenience of reference only and shall not affect the meaning, construction, or effect of any of its provisions. Any undefined terms used herein shall have the meanings provided in the Collateral Agency Agreement.

17. Governing Law and Severability. This Debenture is made pursuant to, and shall be construed and governed by, the laws of the State of New York, and all rules and regulations promulgated thereunder, excluding the conflicts of laws provisions thereof. If any provision of this Debenture is construed or interpreted by a court of competent jurisdiction to be void, invalid, or unenforceable, such construction or interpretation shall affect only those provisions so construed or interpreted and shall not affect the remaining provisions of this Debenture.

18. Jury Trial; Jurisdiction; Venue. Jurisdiction and venue for, and waiver of jury trial in respect of any action, suit or other proceeding arising out of, under, or in connection with this Debenture, are controlled by the provisions of the Collateral Agency Agreement.

[End of Debenture]

Exhibit D

Monitoring Services Engagement Letter

Mr. Bryan S. Mick, Esq.

MICK & ASSOCIATES, P.C. LLO

11422 Miracle Hills Dr. Suite 401

Omaha, NE 68154

Re: Engagement for Monitoring Services

Bluerock Senior Secured Debenture Trust, LLC (the “Program”)

Dear Mr. Mick:

We, BR Senior Secured Debenture Trust, LLC (the “Company”), are pleased to engage

your firm to advise and represent the managing broker-dealer, Orchard Securities, LLC, and the

selling group broker-dealers identified on Exhibit A, as will be supplemented by notice to you on

a regular basis during the term of the Program (collectively, the “BD Clients”). During the

course of your engagement, you will not be representing us with respect to the services more

fully specified below in a lawyer/client or any other capacity, and we acknowledge that: 1)

pursuant to this engagement, you will not be representing the BD Clients with regard to the

initial due diligence investigation of the Program or advising them or us as to any other matter

except as outlined below, 2) you currently and will hereafter advise the BD Clients as to the

propriety of its registered representatives offering private placements sponsored by other firms,

specifically including private placement offerings that may be competitive with, and superior in

structure to the Program, to retail customers; and 3) your engagement as defined herein, and our

payment of the fees set forth below, will have no bearing or influence upon your factual

reporting, analysis, and ongoing recommendations to the BD Clients with respect to the Program,

nor will it influence you favorably with respect to any due diligence investigation and legal

opinion you may issue in the future with respect to any private placement or registered offering

that may be affiliated with the undersigned. We waive any current or prospective claim of a

lawyer/client relationship in this regard, and understand that you may withdraw from further

engagement hereunder should an ethical conflict arise with BD Clients relating to the services to

be provided hereunder.

You agree to provide, no less frequently than on a calendar year basis, your commercially

reasonable investment monitoring services, including forensic examination, legal review,

financial reporting and structural and qualitative analyses with regard to the Program and the

loans made by the Program as described in the Confidential Private Placement Memorandum of

the Program (the “Qualified Loans”) for the specific purpose of monitoring the occurrence of an

event of default (whether actual or potential) (“Event of Default”) under the 9.0% Senior

Secured Debentures due December 31, 2013, subject to a one-year extension in our sole

discretion (the “Debentures”) issued by the Program (each, a “Review”). Your duties in

connection with this engagement, to be exercised in your sole but reasonable discretion, shall

include and be limited to:

1. Reviewing all Qualified Loan documentation, including but not limited to

mortgages/deeds of trust, loan agreements, promissory notes, assignments of rents

and leases, title insurance, indemnities and real estate closing files;

2. Reviewing Program-level operating information, including general ledgers,

payment histories, physical checks and online bank account review;

3. Following the initial extension of the term of a Qualified Loan made to an affiliate

of the Program, reviewing operating information for such Qualified Loan

borrower, including, with respect to such borrower only, interim financial

statements, general ledgers, payment histories, physical checks and online bank

account review, to the extent such items can be reasonably produced by or are

reasonably accessible to the Program;

4. Reviewing any material agreements entered into by the Program;

5. Reviewing all Underwriting Criteria, Appraisals, third party reports, valuation

analyses and Investment Committee minutes for Qualified Loans;

6. Determining the status of real estate taxes and insurance coverages for projects

securing the Qualifying Loans and communicating with the BD Clients regarding

payment, any delinquency and the effects thereof;

7. Reviewing financial performance information of the Program; and

8. Communicating directly with the officers, employees, accountants and attorneys

of the Company actively working on matters related to the Program regarding any

subject matter you deem relevant to the duties set forth above, and we will waive

confidentiality to ensure you have adequate access to all relevant information.

We understand that you will require communication with one representative of our

company as the primary contact for document and information flow. That person’s contact

information is set forth in full below:

Company representative: Printed Name: Michael L. Konig

Mailing Address: c/o Bluerock Real Estate, LLC

680 5th

Avenue, 16th

Floor

New York, New York 10019

Phone: (212) 843-1601

E-mail: mkonig@bluerockre.com

We acknowledge that you will be reporting the findings of your Review in writing to the

BD Clients and that we are not entitled to approve such work product, but you agree to provide

us with an opportunity to review and comment on any such Review before it is disseminated to

BD Clients. Without limitation, you have agreed to discuss with us certain findings that may

allow our firm to revise processes, address compliance, client information security, acquisition

documentation or underwriting processes, investor and broker-dealer reporting and other

pertinent matters to accomplish our mutual goal of transparency and private placement offering

quality for the benefit of all stakeholders. In particular, you agree to notify Bluerock of any

Event of Default (whether actual or potential) discovered by you at least three (3) business days

prior to reporting such Event of Default to the BD Clients or any other party.

Your compensation for services rendered under this Agreement shall be as provided in

that certain Collateral Agency Agreement entered into simultaneously herewith. Your

compensation as provided in the Collateral Agency Agreement is intended to cover all costs and

expenses under it and under this Agreement.

This Agreement may be terminated by your firm or our firm for any reason upon at least

thirty (30) days prior written notice. Termination shall be effective on the date stated in such

notice, and no party will have any further obligation or liability to the other after such effective

date of termination. If not so terminated, this Agreement will continue in effect until such time

that all obligations under the Debentures have been repaid in full.

As the above terms conform with our understanding of our agreement, we sign this letter

below and will return it to you via telefax at (402) 504-3951, email pdf to

joanne@mickandassociates.com, or regular mail to the address above, along with a true and

correct copy of all initial Program offering documents when available.

Company Name: BR Senior Secured Debenture Trust, LLC

By (signed):

Printed Name: Jordan Ruddy

Title: Chief Operating Officer, Bluerock Real Estate, LLC, its Sole Member

Date: April 30, 2009

Seen and agreed to:

Mick & Associates, P.C., LLO,

a Nebraska professional corporation

By:

Name:

Title:

Exhibit E

Form of Pledge and Security Agreement by Bluerock

PLEDGE AND SECURITY AGREEMENT

This PLEDGE AGREEMENT AND SECURITY AGREEMENT (this

“Agreement”), dated as of April [ ], 2009, made by Bluerock Real Estate, LLC, a Delaware

limited liability company (“Bluerock”), to Mick & Associates, P.C., LLO, a Nebraska

professional corporation (“Collateral Agent”), as agent pursuant to that certain Collateral Agency Agreement (as defined herein), for the ratable benefit of the Holders (as defined herein) recites and provides:

RECITALS

A. Pursuant to that certain Confidential Private Placement Memorandum (as

amended or supplemented from time to time, the “Memorandum”) of BR Senior Secured

Debenture Trust, LLC (the “Company”), dated April [ ], 2009, the Company intends to offer and sell up to an aggregate principal amount of $25,000,000 (subject to increase to $35,000,000) in 9.0% Senior Secured Debentures.

B. The Company is a wholly-owned subsidiary of Bluerock.

C. The Company is managed by BR Senior Secured Debenture Trust Manager, LLC

(the “Manager”). D. Bluerock intends to grant Collateral Agent a security interest in the Pledged

Collateral (as defined herein) to secure its present and future Obligations under the Debentures in accordance with the provisions hereof.

Agreement:

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce Holders to purchase Debentures in accordance with the Memorandum, Bluerock hereby covenants and agrees as follows:

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

“Additional Creditors” shall have the meaning assigned thereto in the Collateral Agency Agreement.

“Bluerock” shall mean Bluerock Real Estate, LLC, a Delaware limited liability company.

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“Collateral Agency Agreement” shall mean the Collateral Agency Agreement of even date herewith among, the Company, the Holders, Collateral Agent, the Additional Creditors and Bluerock.

“Collateral Assignments” shall mean each Collateral Assignment of Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing and other Loan Documents and Promissory Note Pledge and Security Agreement in connection with each Loan.

“Company” shall mean BR Senior Secured Debenture Trust, LLC, a Delaware limited liability company.

“Company Pledge Agreement” shall mean that certain Pledge and Security Agreement made by the Company to the Collateral Agent, for the ratable benefit of the Holders, dated as of even date hereof.

“Debentures” shall mean the 9.0% Senior Secured Debentures of the Company in an aggregate principal amount of $25,000,000 (subject to increase to $35,000,000), as well as any series of secured debentures or credit agreements of the Company issued on a pari passu basis

with the Debentures. “Debenture” shall mean any individual debenture issued constituting part of the Debentures.

“Holders” shall have the meaning assigned thereto in the Collateral Agency Agreement.

“Loan” shall have the meaning assigned thereto in the Collateral Agency Agreement.

“Manager” shall mean BR Senior Secured Debenture Trust Manager, LLC, a Delaware limited liability company.

“Membership Interests” shall mean any and all membership interests of Bluerock in the Company and in the Manager at any time and from time to time included in the Pledged Collateral.

“Obligations” shall mean the payment, when and as due, of any and all outstanding principal and interest of the Debentures.

“Pledged Collateral” shall mean all the rights, title, interests, and properties of Bluerock in which Collateral Agent is granted a security interest, lien, other encumbrance, or other interest for the ratable benefit of Holders pursuant to Section 2 hereof.

“Proceeds” shall mean any and all “proceeds,” as defined in the UCC, of any and all Pledged Collateral and, in any event, at any time whatsoever arising or receivable, any and all cash, shares of stock, instruments, other securities, rights, properties, interests, claims, and other proceeds arising in connection with any collection, exchange, sale, transfer, or other disposition of any Pledged Collateral or interest therein or into which any Pledged Collateral or interest therein is voluntarily or involuntarily converted, and other amounts from time to time paid or payable under or in connection with any Pledged Collateral.

“Security Documents” shall have the meaning assigned thereto in the Collateral Agency Agreement.

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“Transaction Documents” shall mean the Memorandum, the Debentures, the Collateral Agency Agreement, this Agreement, the Collateral Assignments, and the Company Pledge Agreement.

Section 2. Pledge and Grant of Security Interest. As collateral security for the punctual payment, performance, and satisfaction, when and as due, of all Obligations by Bluerock, and in order to induce Holders to purchase the Debentures in accordance with the terms of the Memorandum, Bluerock hereby deposits with, pledges, assigns, hypothecates, transfers, and delivers to Collateral Agent for the ratable benefit of Holders, and grants to Collateral Agent for the ratable benefit of Holders a security interest in, all Bluerock’s right, title, and interest (but none of Bluerock’s obligations) in, to, and under the following, with full authority to sell, transfer, and rehypothecate:

(a) 100% of the Membership Interests that Bluerock at any time and from time to time may have in Company and the Manager; and

(b) all dividends and other distributions, whether in cash, property, obligations,

or any other form whatsoever, from time to time paid, payable, or otherwise distributed or distributable in respect of or in exchange for any or all of the Membership Interests; and

(c) all right, title and interest of Bluerock to participate in the management of the

Company and the Manager; and

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

(e) any and all Proceeds of any and all of the foregoing, whether or not

constituting any kind or type of tangible or intangible personal or real property whatsoever and whether now owned or hereafter acquired, including without limitation certificates, instruments, shares of stock, other securities, and rights, privileges, and options pertaining to any thereof, whether arising in connection with the exercise of any of Collateral Agent’s rights, powers, or remedies under this Agreement or otherwise,

in each case, howsoever Bluerock’s interest therein may arise or appear, whether by ownership, security interest, claim, or otherwise; PROVIDED, HOWEVER, the Collateral Agent, for itself and on behalf of the Holders, agrees, that if and so long as an Event of Default (as defined herein) shall not have occurred, Bluerock shall have the right to receive all distributions and payments in respect of the Pledged Collateral paid in cash or in other property.

Section 3. General Covenants. So long as any Obligations remain unpaid, Bluerock covenants and agrees that, unless Collateral Agent otherwise expressly consents in writing:

Section 3.1. Perfected Lien. This Agreement creates a valid senior lien on and security interest in the Pledged Collateral that, together with appropriate financing statements, when filed or possessed by the Collateral Agent, in either case as may be required by the UCC in order to

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perfect a security interest in the Pledged Collateral, shall create a perfected first priority lien on and security interest in the Pledge Collateral enforceable against all third parties and securing the payment of the Obligations.

Section 3.2. Limitations on Dispositions, etc. Bluerock shall not directly or indirectly (a) suffer any amendment or other modification of any Membership Interests or (b) sell, assign (by operation of law or otherwise), exchange, liquidate, grant, or otherwise dispose of any Membership Interests or any lien or other interest therein.

Section 3.3. Changes in Bluerock’s Name. Bluerock shall not change, or suffer or permit any change of, Bluerock’s name or identity which could in any manner make any financing or continuation statement filed in connection herewith (including without limitation under this Section 3) “seriously misleading,” as defined in the UCC, unless (a) Bluerock shall have given Collateral Agent no less than ninety (90) days’ prior written notice thereof, (b) Bluerock shall have, prior to such change, delivered to Collateral Agent acknowledgment copies of financing statements duly completed, executed, and filed in each jurisdiction necessary or advisable to ensure the continuous perfection of all security interests granted pursuant to this Agreement, and (c) Bluerock shall have taken all other action or actions necessary, or reasonably requested by Collateral Agent, to preserve and protect all such security interests, including without limitation the continuous perfection thereof.

Section 3.4. Voting, etc., of Pledged Collateral. So long as no Event of Default shall have occurred and be continuing, Bluerock may vote any Membership Interests for any purpose and to any effect to the extent not inconsistent with the provisions of the Transaction Documents, and, upon Bluerock’s reasonable written request therefor, Collateral Agent will execute and deliver (or cause to be executed and delivered) to Bluerock any such proxy or other instrument as is reasonably necessary to enable Bluerock to vote any Membership Interests for any such purpose and to any such effect.

Section 3.5. Certain Rights respecting Pledged Collateral. Collateral Agent shall have the right, exercisable at any time and from time to time in Collateral Agent’s sole discretion, to cause the interest of Collateral Agent in any Pledged Collateral to be duly noted on any transfer books for Membership Interests or other records therefor, and to have the Membership Interests certificated in the name of the Collateral Agent and delivered to Collateral Agent. The Company and the Manager hereby agree to comply with any request for transfer or certification.

Section 3.6. Title. Except for the security interest granted by this Agreement, Bluerock has, or on acquisition will have, full title to the Pledged Collateral free and clear from any lien, security interest, encumbrance or claim.

Section 3.7. Financing Statement. No financing statement covering any of the Pledged Collateral, or any part of the proceeds of the Pledged Collateral, is on file in any public office.

Section 3.8. Confirmation of Compliance. As requested in writing from time to time by the Collateral Agent, Bluerock shall provide Collateral Agent written confirmation of compliance with the terms of this Agreement to the reasonable satisfaction of Collateral Agent.

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Section 4. Default.

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

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

(b) If any “Triggering Event” shall occur under the Collateral Agency

Agreement, as defined therein.

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

Section 4.2.1. Acceleration. Collateral Agent may declare any and all Obligations to be immediately due and payable, without regard to any scheduled interest payment dates or maturity dates.

Section 4.2.2. Accounts, etc. Until the occurrence of an Event of Default, Bluerock may collect, for its own benefit, any and all amounts owing under or in connection with any Pledged Collateral, which Holders hereby expressly authorize Bluerock to do, but, after the occurrence of an Event of Default, (a) Collateral Agent may curtail or terminate such authority at any time and from time to time and Bluerock shall, at all times after Bluerock’s receipt of notice from Collateral Agent so to do, segregate all such amounts from Bluerock’s funds and other property, and shall, immediately upon Bluerock’s receipt thereof, deliver actual possession of all such amounts to Collateral Agent and (b) Bluerock shall hold all such amounts in trust for Holders and as Holders’ bailee until such delivery to Collateral Agent has been made.

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

(a) without demand of payment or performance or other demand,

advertisement, or notice of any kind (all and each of which demands, advertisements, and notices, excepting only the notice of time and place of public or private sale specified in this Section 4.2.3 and any other demand, advertisement, or notice which by law may not be waived, Bluerock hereby expressly waives) to or upon Bluerock or any other person

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or entity, Collateral Agent may (1) immediately enter Bluerock’s premises without legal process and without any liability therefor, (2) immediately collect, receive, appropriate, and realize upon any Pledged Collateral, (3) immediately sell, lease, assign, give any options to purchase, or otherwise dispose of and deliver any Pledged Collateral (or contract to do so) at any public or private sale, at any exchange, broker’s board, Collateral Agent’s offices, or elsewhere, at such prices as Holders may in good faith deem appropriate, for cash, on credit, or for future delivery with or without assumption of any credit risk, and (4) require Bluerock to assemble any Pledged Collateral, and Bluerock shall make all such Pledged Collateral available to Collateral Agent at such place or places as Collateral Agent shall select, which in any event shall be reasonably convenient to Collateral Agent; and

(b) Collateral Agent and each Holder shall have the right upon

any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase any Pledged Collateral so sold, free of any right or equity of redemption in Bluerock; and

(c) Collateral Agent need not give more than fifteen (15) days’

prior written notice of the time and place of any public sale or of the time after which any private sale may occur, which notice shall constitute reasonable notification thereof; and

(d) to the extent permitted by applicable law, Bluerock waives

all claims, damages, and demands against Collateral Agent or any Holder arising out of the repossession, retention, or usage by Collateral Agent or any employee, agent, or other representative thereof of any Pledged Collateral.

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

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

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

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(b) causing Company and the Manager to permit Collateral

Agent and Holders, such prospective purchasers, and their respective employees, agents, and other representatives to enter the premises of Company or the Manager to inspect the Company’s or Manager’s properties, books, and records and to make such abstracts and copies thereof as any thereof may desire; and

(c) executing and delivering, and causing Company, the

Manager and the managers thereof to execute and deliver, all instruments and documents, and doing, and causing to be done, all acts and things Collateral Agent may deem necessary or advisable to register any Pledged Collateral under applicable securities laws and to cause any registration statement with respect thereto to become and remain effective for such period as applicable securities laws may require; and

(d) making or causing to be made all supplements, amendments,

and other modifications to any of the foregoing and to any prospectus or prospectuses which Collateral Agent may deem necessary or advisable for compliance or continued compliance with applicable securities laws; and

(e) causing any Pledged Collateral to qualify under any

applicable state securities laws, including without limitation “Blue Sky” laws; and

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

(g) doing or causing to be done any other act or thing Collateral

Agent may deem necessary or advisable for such sale or other disposition to be valid, binding, and in compliance with applicable law.

Section 4.3.2. Voting, etc., of Pledged Collateral. Bluerock shall not vote or take any other steps with respect to the Pledged Collateral without Collateral Agent’s express prior written consent and Collateral Agent shall have the sole right, in Collateral Agent’s sole discretion without any notice to Bluerock or any other person or entity, to transfer all or any part of the Pledged Collateral into Collateral Agent’s name for the ratable benefit of Holders and to vote any and all Membership Interests as Collateral Agent may deem advisable for the protection of Holders’ interests.

Section 5. Miscellaneous.

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

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Section 5.2. Jury Trial; Jurisdiction; Venue. Jurisdiction and venue for, and waiver of jury trial in respect of, any action, suit, or other proceeding arising out of, under, or in connection with this Agreement or any course of conduct, course of dealing, statements (verbal or written) or action of any party thereto, whether in connection with any Transaction Document or otherwise, are controlled by the provisions of the Collateral Agency Agreement relating thereto.

Section 5.3. Notices. All notices, reports, or writings required or permitted to be given hereunder shall be in writing and shall be served by delivering the same personally to the other party, or by sending the notice postage prepaid by certified U. S. first class mail, return receipt requested, or by a reputable national guaranteed overnight delivery service. Any and all such notices shall be delivered to the parties at their respective addresses specified in this Section 5.3. Any such notice deposited in the mail shall be conclusively deemed delivered to and received by the addressee on the third business day after the day on which such notice is delivered to the U. S. postal service for mailing if all of the foregoing conditions shall have been satisfied.

To Bluerock: Bluerock Real Estate, LLC 680 5th Avenue, 16th Floor New York, NY 10019 With a copy to: BR Senior Secured Debenture Trust, LLC c/o BR Senior Secured Debenture Trust Manager, LLC 680 5th Avenue, 16th Floor New York, NY 10019 To Collateral Agent: Mick & Associates, P.C., LLO 11422 Miracle Hills Drive, Suite 401 Omaha, NE 68154

Section 5.4. Time of Essence. Time is of the essence with respect to every term, covenant, condition, representation, warranty, obligation, and other provision of this Agreement.

Section 5.5. Counterparts. This Agreement may be executed and delivered in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument.

Section 5.6. Successors and Assigns; Third Party Beneficiaries. The terms, covenants, conditions, and other provisions of this Agreement shall be binding upon the administrators, successors, and assigns of Bluerock, and shall, together with all rights, powers, and remedies of Collateral Agent and Holders hereunder, inure to the benefit of Holders and any one or more present or future Holders, successors, pledgees, assignees, or endorsees from any Holder, and their respective successors and assigns, subject to all applicable provisions of the Debentures and Collateral Agency Agreement. Subject to the foregoing, no term, covenant, condition, representation, warranty, obligation, or other provision hereof is for the benefit of any person or entity not a party hereto.

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

BLUEROCK: Bluerock Real Estate, LLC, a Delaware limited liability company By: Name: Title:

COLLATERAL AGENT: Mick & Associates, P.C., LLO, a Nebraska professional corporation By: Name: Title:

For purposes of the covenants and agreements of such parties set forth herein:

COMPANY: BR Senior Secured Debenture Trust, LLC, a Delaware limited liability company By: BR Senior Secured Debenture Trust Manager, LLC, a Delaware limited liability company, its Manager By:

MANAGER: BR Senior Secured Debenture Trust Manager, LLC, a Delaware limited liability company By:

Exhibit F

Form of Pledge and Security Agreement by the Trust

PLEDGE AND SECURITY AGREEMENT

This PLEDGE AGREEMENT AND SECURITY AGREEMENT (this “Agreement”), dated

as of April [ ], 2009, made by BR Senior Secured Debenture Trust, LLC, a Delaware limited liability

company (the “Company”), to Mick & Associates, P.C., LLO, a Nebraska professional corporation

(“Collateral Agent”), as agent pursuant to that certain Collateral Agency Agreement (as defined herein), for the ratable benefit of the Holders (as defined herein) recites and provides:

RECITALS

A. Pursuant to that certain Confidential Private Placement Memorandum (as amended or

supplemented from time to time, the “Memorandum”) of the Company, dated April [ ], 2009, the Company intends to offer and sell an aggregate principal amount of $25,000,000 (subject to increase to $35,000,000) in 9.0% Senior Secured Debentures.

B. The Company is a wholly-owned subsidiary of Bluerock Real Estate, LLC, the

Company’s Manager ( “Bluerock”). C. The Company intends to grant Collateral Agent a security interest in the Pledged

Collateral (as defined herein) to secure its present and future Obligations under the Debentures in accordance with the provisions hereof.

Agreement:

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce Holders to purchase Debentures in accordance with the Memorandum, the Company hereby covenants and agrees as follows:

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

“Additional Creditors” shall have the meaning assigned thereto in the Collateral Agency Agreement.

“Collateral Agency Agreement” shall mean the Collateral Agency Agreement of even date herewith among the Company, the Holders, the Collateral Agent, the Additional Creditors and Bluerock.

“Company” shall mean BR Senior Secured Debenture Trust, LLC, a Delaware limited liability company.

“Debentures” shall mean the 9.0% Senior Secured Debentures of the Company in an aggregate principal amount of $25,000,000 (subject to increase to $35,000,000), as well as any series of secured

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debentures or credit agreements of the Company issued on a pari passu basis with the Debentures.

“Debenture” shall mean any individual debenture issued constituting part of the Debentures.

“Holders” shall have the meaning assigned thereto in the Collateral Agency Agreement.

“Loan” shall have the meaning assigned thereto in the Collateral Agency Agreement.

“Obligations” shall mean the payment, when and as due, of any and all outstanding principal and interest of the Debentures.

“Pledge Agreement” shall mean that certain Pledge and Security Agreement made by Bluerock

to the Collateral Agent, for the ratable benefit of the Holders, dated as of even date hereof.

“Pledged Collateral” shall mean all the rights, title, interests, and properties of the Company in which Collateral Agent is granted a security interest, lien, other encumbrance, or other interest for the ratable benefit of Holders pursuant to Section 2 hereof.

“Proceeds” shall mean any and all “proceeds,” as defined in the UCC, of any and all Pledged Collateral and, in any event, at any time whatsoever arising or receivable, any and all cash, shares of stock, instruments, other securities, rights, properties, interests, claims, and other proceeds arising in connection with any collection, exchange, sale, transfer, or other disposition of any Pledged Collateral or interest therein or into which any Pledged Collateral or interest therein is voluntarily or involuntarily converted, and other amounts from time to time paid or payable under or in connection with any Pledged Collateral.

“Security Documents” shall have the meaning assigned thereto in the Collateral Agency Agreement.

“Transaction Documents” shall mean the Memorandum, the Debentures, the Collateral Agency Agreement, this Agreement, the Collateral Assignments, and the Pledge Agreement.

“UCC” shall mean the Delaware Uniform Commercial Code, as amended.

Section 2. Pledge and Grant of Security Interest. As collateral security for the punctual payment, performance, and satisfaction, when and as due, of all Obligations and in order to induce Holders to purchase the Debentures in accordance with the terms of the Memorandum, the Company hereby deposits with, pledges, assigns, hypothecates, transfers, and delivers to Collateral Agent for the ratable benefit of Holders, and grants to Collateral Agent for the ratable benefit of Holders a security interest in, all of the Company’s right, title, and interest (but none of the Company’s obligations) in, to, and under the following, whether now owned by the Company or hereafter acquired, and whether now existing or hereafter coming into existence, and wherever located, with full authority to sell, transfer, and rehypothecate:

(a) all shares of stock or equity interests in corporations, limited liability companies, partnerships or other entities (whether certificated or not) from time to time acquired by the Company in any manner, and the certificates representing such shares or interests, and all dividends, distributions (whether in respect of income, capital or otherwise), cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares or interests; and

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(b) all accounts (as defined in the UCC) of the Company; and

(c) all instruments (as defined in the UCC) of the Company, including, without limitation, any negotiable instrument or any other writing that evidences a right to payment of any monetary obligation; and

(d) all deposit accounts (as defined in the UCC) of the Company, including without

limitation, any demand, time, savings, passbook or similar account maintained in a bank or other financial institution; and

(e) all cash, commercial tort claims, investment properties, cash proceeds and promissory

notes (as such terms are defined in the UCC) of the Company; and

(f) all personal property of the Company not included in (a) through (e) above; and (g) any and all cash and non-cash proceeds of any and all of the foregoing, whether or

not constituting any kind or type of tangible or intangible personal or real property whatsoever and whether now owned or hereafter acquired, including without limitation certificates, instruments, shares of stock, other securities, and rights, privileges, and options pertaining to any thereof, whether arising in connection with the exercise of any of Collateral Agent’s rights, powers, or remedies under this Agreement or otherwise,

in each case, howsoever the Company’s interest therein may arise or appear, whether by ownership, security interest, claim, or otherwise; PROVIDED, HOWEVER, the Pledged Collateral does not include and will not include any mortgage, deed of trust, instrument, promissory note or other loan documentation in connection with any Loan funded or acquired by the Company, which shall be separately secured pursuant to a Collateral Assignment of Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing and other Loan Documents, and Promissory Note Pledge and

Security Agreement in connection with each Loan (each, a “Collateral Assignment,” and collectively,

the “Collateral Assignments”); PROVIDED, FURTHER, and the Collateral Agent, for itself and on behalf of the Holders, agrees, that if and so long as an Event of Default (as herein defined) shall not have occurred, the Company shall have the right to receive all distributions and payments in respect of the Pledged Collateral paid in cash or in other property.

Section 3. General Covenants. So long as any Obligations remain unpaid, the Company covenants and agrees that, unless Collateral Agent otherwise expressly consents in writing:

Section 3.1. Perfected Lien. This Agreement creates a valid senior lien on and security interest in the Pledged Collateral that, together with appropriate financing statements, when filed or possessed by the Collateral Agent, in either case as may be required by the UCC in order to perfect a security interest in the Pledged Collateral, shall create a perfected first priority lien on and security interest in the Pledge Collateral enforceable against all third parties and securing the payment of the Obligations.

Section 3.2. Changes in the Company’s Name. The Company shall not change, or suffer or permit any change of, the Company’s name or identity which could in any manner make any financing or continuation statement filed in connection herewith (including without limitation under this Section 3.2) “seriously misleading,” as defined in the UCC, unless (a) the Company shall have given Collateral Agent no less than ninety (90) days’ prior written notice thereof, (b) the Company shall have,

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prior to such change, delivered to Collateral Agent acknowledgment copies of financing statements duly completed, executed, and filed in each jurisdiction necessary or advisable to ensure the continuous perfection of all security interests granted pursuant to this Agreement, and (c) the Company shall have taken all other action or actions necessary, or reasonably requested by Collateral Agent, to preserve and protect all such security interests, including without limitation the continuous perfection thereof.

Section 3.3. Title. Except for the security interest granted by this Agreement, the Company has, or on acquisition will have, full title to the Pledged Collateral free and clear from any lien, security interest, encumbrance or claim.

Section 3.4. Financing Statement. No financing statement covering any of the Pledged Collateral, or any part of the proceeds of the Pledged Collateral, is on file in any public office.

Section 3.5. Confirmation of Compliance. As requested in writing from time to time by the Collateral Agent, the Company shall provide Collateral Agent written confirmation of compliance with the terms of this Agreement to the reasonable satisfaction of Collateral Agent.

Section 4. Default.

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

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

(b) If any “Triggering Event” shall occur under the Collateral Agency

Agreement, as defined therein.

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

Section 4.2.1. Acceleration. Collateral Agent may declare any and all Obligations to be immediately due and payable, without regard to any scheduled interest payment dates or maturity dates.

Section 4.2.2. Accounts, etc. Until the occurrence of an Event of Default, the Company may collect, for its own benefit, any and all amounts owing under or in connection with any Pledged Collateral, which Holders hereby expressly authorize the Company to do, but, after the occurrence of an Event of Default, (a) Collateral Agent may curtail or terminate such authority at any time and from time to time and the Company shall, at all times after the

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Company’s receipt of notice from Collateral Agent so to do, segregate all such amounts from the Company’s funds and other property, and shall, immediately upon the Company’s receipt thereof, deliver actual possession of all such amounts to Collateral Agent and (b) the Company shall hold all such amounts in trust for Holders and as Holders’ bailee until such delivery to Collateral Agent has been made.

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

(a) without demand of payment or performance or other demand,

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

(b) Collateral Agent and each Holder shall have the right upon any such

public sale, and, to the extent permitted by law, upon any such private sale, to purchase any Pledged Collateral so sold, free of any right or equity of redemption in the Company; and

(c) Collateral Agent need not give more than fifteen (15) days’ prior

written notice of the time and place of any public sale or of the time after which any private sale may occur, which notice shall constitute reasonable notification thereof; and

(d) to the extent permitted by applicable law, the Company waives all

claims, damages, and demands against Collateral Agent or any Holder arising out of the repossession, retention, or usage by Collateral Agent or any employee, agent, or other representative thereof of any Pledged Collateral.

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

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committee, or other person or entity whatsoever, including without limitation any nominee of any thereof.

Section 4.4. Exercise of Rights. In the absence of an Event of Default and subject to the Collateral Agency Agreement, the Company may continue to exercise all of its rights under the Pledged Collateral. Collateral Agent shall not, as a result of this Agreement, be deemed to be undertaking any of the obligations of the Company under the Pledged Collateral.

Section 5. Miscellaneous.

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

Section 5.2. Jury Trial; Jurisdiction; Venue. Jurisdiction and venue for, and waiver of jury trial in respect of, any action, suit, or other proceeding arising out of, under, or in connection with this Agreement or any course of conduct, course of dealing, statements (verbal or written) or action of any party thereto, whether in connection with any Transaction Document or otherwise, are controlled by the provisions of the Collateral Agency Agreement.

Section 5.3. Notices. All notices, reports, or writings required or permitted to be given hereunder shall be in writing and shall be served by delivering the same personally to the other party, or by sending the notice postage prepaid by certified U. S. first class mail, return receipt requested, or by a reputable national guaranteed overnight delivery service. Any and all such notices shall be delivered to the parties at their respective addresses specified in this Section 5.3. Any such notice deposited in the mail shall be conclusively deemed delivered to and received by the addressee on the third business day after the day on which such notice is delivered to the U. S. postal service for mailing if all of the foregoing conditions shall have been satisfied.

To Company: BR Senior Secured Debenture Trust, LLC c/o BR Senior Secured Debenture Trust Manager, LLC 680 5th Avenue, 16th Floor New York, NY 10019 To Collateral Agent: Mick & Associates, P.C., LLO 11422 Miracle Hills Drive, Suite 401 Omaha, NE 68154

Section 5.4. Time of Essence. Time is of the essence with respect to every term, covenant, condition, representation, warranty, obligation, and other provision of this Agreement.

Section 5.5. Counterparts. This Agreement may be executed and delivered in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument.

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Section 5.6. Successors and Assigns; Third Party Beneficiaries. The terms, covenants, conditions, and other provisions of this Agreement shall be binding upon the administrators, successors, and assigns of the Company, and shall, together with all rights, powers, and remedies of Collateral Agent and Holders hereunder, inure to the benefit of Holders and any one or more present or future Holders, successors, pledgees, assignees, or endorsees from any Holder, and their respective successors and assigns, subject to all applicable provisions of the Debentures and Collateral Agency Agreement. Subject to the foregoing, no term, covenant, condition, representation, warranty, obligation, or other provision hereof is for the benefit of any person or entity not a party hereto.

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

COMPANY: BR Senior Secured Debenture Trust, LLC, a Delaware limited liability company By: BR Senior Secured Debenture Trust Manager, LLC, a Delaware limited liability company, its Manager By: Name: Title:

COLLATERAL AGENT: Mick & Associates, P.C., LLO, a Nebraska professional corporation By: Name: Title:

BR SENIOR SECURED DEBENTURE TRUST, LLC

Confidential Offering Memorandum

$25,000,000 Offering (Subject to increase to $35,000,000)

9.0% Senior Secured Debentures Due 2013

Minimum Subscription: $50,000

April 30, 2009

The Trust has not authorized any person to make any representations or furnish any information with respect to the Offering or the Secured Debentures, other than as set forth in this Memorandum or other documents or information the Trust or Bluerock may furnish to you upon request. This Memorandum constitutes an offer only to the person whose name appears in the appropriate space on the cover page. Furthermore, the delivery of this Memorandum to you will not constitute an offer, or solicitation of an offer, to purchase Secured Debentures to anyone in any jurisdiction in which such an offer or solicitation is not authorized.