GOVERNANCE AND VOTING AGREEMENT

 

THIS GOVERNANCE AND VOTING AGREEMENT (this “Agreement”) is made as of the 30th
day of January, 2015 by and among Roberts Realty Investors, Inc., a Georgia
corporation (the “Company”), A-III Investment Partners LLC, a Delaware limited
liability company (the “Purchaser”), and Charles S. Roberts, an individual
(“Roberts” and, together with the Company and the Purchaser, the “Parties” and
each a “Party”).

WHEREAS, the Company, Roberts Properties Residential, L.P, a Georgia limited
partnership, and the Purchaser have entered into a Stock Purchase Agreement (the
“Stock Purchase Agreement”), dated the 19th day of November, 2014, pursuant to
which, among other things, the Purchaser has agreed to purchase from the
Company, and the Company has agreed to issue and sell to the Purchaser,
8,450,704 shares of common stock, $.01 par value per share, of the Company (the
“Common Stock”) on the terms and subject to the conditions set forth in the
Stock Purchase Agreement; and

WHEREAS, upon the closing of the transactions contemplated by the Stock Purchase
Agreement (the “Closing”), the Purchaser and Roberts will each beneficially own
and have the power to direct the voting or disposition of certain shares of the
Company’s capital stock; and

WHEREAS, the Parties desire to enter into this Agreement to provide for the
composition of the Board of Directors of the Company (the “Board”) immediately
following the Closing and to provide for certain other rights and obligations of
the Purchaser, the Company and Roberts with respect to certain shares of the
Company’s capital stock beneficially owned by the Purchaser and Roberts, all in
accordance with the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the respective representations, warranties,
covenants and agreements set forth in the Stock Purchase Agreement and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

1.                  Initial Board Composition and Representation. In connection
with the Closing, the Company agrees to take all Necessary Actions (as defined
below) to effectuate the following results:

(a)                At the Closing, the existing Board shall take all Necessary
Actions to increase the number of directors on the Board from five to seven
effective upon the Closing, thereby creating two vacancies on the Board. In
accordance with the provisions of the Georgia Business Corporation Code, the
increase or decrease in the number of directors shall be so apportioned among
the classes as to make all classes as nearly equal in number as possible. In
that regard, the class of 2015 shall have two directors, the class of 2016 shall
have three directors and the class of 2017 shall have two directors. Each of the
seven directors shall be appointed into a particular class as described in
Sections 1(b) through 1(f) below.

(b)               Prior to the Closing, all five directors serving on the Board
immediately prior to the Closing (including Roberts, subject to Section 1(f)
below) shall deliver letters of resignation and release to the Company, and the
Company shall deliver copies of such letters to the Purchaser in accordance with
the requirements of the Stock Purchase Agreement. Such resignations shall be
effective only if the Closing occurs and otherwise at the times and in the
sequence described in Sections 1(c) through 1(f) below.

 

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(c)                At or immediately following the Closing, the resignations of
Weldon R. Humphries and Wm. Jarell Jones shall become effective, and the members
of the Board at that time shall appoint Weldon R. Humphries and Wm. Jarell Jones
(the “Purchaser Directors”) to fill two of the vacancies in the class of 2017.
Neither of the Purchaser Directors (or any replacement) shall be required to
qualify as an Independent Director (as defined below).

(d)               Immediately after the events described in the preceding
Section 1(c), the resignations of John L. Davis and Charles R. Elliott shall
become effective, and the members of the Board at that time shall appoint Bruce
D. Frank and Robert L. Loverd, each qualifying as an “Independent Director” as
defined below as of the Closing Date (each a “New Independent Director”), to
fill the two vacancies in the class of 2016. If either such person is unable or
unwilling to serve, another person designated in writing by the Purchaser and
qualifying as an “Independent Director” as defined below shall be appointed to
the class of 2016.

(e)                Immediately after the events described in the preceding
Sections 1(c) and 1(d) above, the resignation of Roberts (in which he shall
resign as a director and as an officer of the Company and its Affiliates (as
defined below)) shall become effective, and the members of the Board at that
time shall appoint Robert G. Koen and Kyle Permut, each qualifying as an
“Independent Director” as defined below as of the Closing Date (each a “New
Independent Director”), to fill the two newly created vacancies in the class of
2015. If either such person is unable or unwilling to serve, another person
designated in writing by the Purchaser and qualifying as an “Independent
Director” as defined below shall be appointed to the class of 2015. The two (2)
New Independent Directors in the class of 2015, together with the two (2) New
Independent Directors in the class of 2016, shall, collectively, be the “New
Independent Directors.”

(f)                Immediately after the events described in the preceding
Sections 1(c), 1(d) and 1(e) above, Roberts shall immediately thereafter be
re-appointed as a director of the Company (but not as the Chairman of the Board)
in the Class of 2016 and re-appointed and employed as an officer of the Company
in accordance with that certain Employment Agreement between the Company and
Roberts dated as of the Closing Date (the “Employment Agreement”).

(g)               For purposes of this Agreement, a Person shall be deemed to be
an “Independent Director” if he or she satisfies the independence standards of
both (1) the Company’s articles of incorporation and bylaws, as in effect on the
date hereof and as of the Closing Date, and (2) the NYSE MKT or such other
national securities exchange or quotation system on which the Company’s
securities may become listed for trading or quotation (each an “Independent
Director”). Each New Independent Director must qualify as an Independent
Director throughout his or her term as a director. If at any time, the Board
determines that any Company director (other than Roberts and the Purchaser
Directors), does not qualify as an Independent Director, the Company shall give
prompt written notice to the Parties of such determination and the basis
therefor. Upon making such determination, or receiving notice thereof, the
Purchaser shall designate a replacement director, and the Company shall take
such actions as are necessary to cause such existing director to resign from the
Board, and the qualifying replacement director to be appointed or elected to the
Board, as soon as reasonably practical. To effectuate such requirement, each of
the New Independent Directors shall execute and deliver to the Company on the
Closing Date, and any replacement director therefor shall execute and deliver to
the Company on the date of his or her designation, a letter of resignation, in
the form attached as Exhibit A hereto, which resignation shall automatically
take effect upon a determination by the Board that such director has ceased to
qualify as an “Independent Director.”

 

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(h)               For purposes of this Agreement, “Necessary Actions” shall
mean, with respect to a specified result, all actions that are permitted by
applicable law and applicable stock exchange rules as shall be necessary to
cause such result. Such actions shall include, but are not limited to: (i)
adoption by the Board of resolutions or other similar action by the Board as
shall be required in order to increase the number of directors on the Board as
described in this Agreement, including but not limited to approving an amendment
to the Company’s bylaws; (ii) appointment by the Board of the individuals
identified under this Agreement to fill vacancies on the Board; (iii) including
individuals identified under this Agreement in the slate of nominees to the
Board recommended to the shareholders of the Company for election as directors;
(iv) soliciting proxies or consents in favor of the election of individuals
nominated for election to the Board; (v) voting (whether at an annual or special
meeting) or providing a written consent or proxy with respect to shares of
Common Stock; (vi) calling or attending meetings in person or by proxy for the
purposes of obtaining a quorum and causing the adoption of shareholders’
resolutions and amendments to the organizational documents of the Company; (vii)
causing members of the Board to act in a certain manner or causing them to be
removed if they do not act in such a manner; (viii) executing agreements and
instruments; and (ix) making or causing to be made, with governmental,
administrative or regulatory authorities, all filings, registrations or similar
actions that are required to achieve such result.

(i)                 For purposes of this Agreement, “Affiliate” shall mean, with
respect to any specified person, any other person who, directly or indirectly,
controls, is controlled by, or is under common control with such person,
including, without limitation, any general partner, managing member, officer or
director of such person.

2.                  Continuing Board Composition and Representation.

(a)                Purchaser Directors. Subject to Section 2(c) below, the
Company agrees to take all Necessary Actions to nominate each of the two
Purchaser Directors (or any replacement thereof designated by the Purchaser) for
re-election to the Board at each subsequent meeting of the shareholders of the
Company held to consider a vote on the election of directors of the class in
which such Purchaser Director serves, and not to take any action that is
designed to interfere with such election or re-election of each such Purchaser
Director to the Board. Only such individuals designated in accordance with
Section 1(c) above, or in accordance with the provisions of this Section 2,
shall be eligible for nomination or election as successors to the Purchaser
Directors. Subject to Section 2(c), if at any time a vacancy occurs on the Board
with respect to the directorship of either of the Purchaser Directors (by reason
of such director’s death, disability, resignation, removal or otherwise), the
Company agrees to take all Necessary Actions to cause a replacement director,
designated by the Purchaser (or its permitted assignees), to be appointed to
fill such vacancy promptly following his or her designation by the Purchaser (or
permitted assignees) hereunder. If the Purchaser fails to designate a
replacement director to be appointed to fill such vacancy, the Nominating and
Governance Committee shall be permitted to designate a nominee (who shall
qualify as an Independent Director) for election to the Board to fill such
vacancy at the next succeeding annual meeting of shareholders of the Company. If
the Purchaser fails to designate a replacement director to be appointed to fill
such vacancy and the Nominating and Governance Committee designates a nominee
for election to the Board to fill such vacancy as provided in the immediately
preceding sentence, the Purchaser’s rights under Sections 1 and 2 hereof shall
not be terminated and shall apply at the next succeeding meeting of shareholders
of the Company at which an election of directors occurs.

 

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(b)               New Independent Directors. Subject to Sections 2(c) below, the
Company agrees to take all Necessary Actions to nominate each of the four New
Independent Directors (or any replacement thereof designated by the Purchaser)
for re-election to the Board at each subsequent meeting of the shareholders of
the Company held to consider a vote on the election of the class in which each
such New Independent Director serves, and not to take any action that is
designed to interfere with such election or re-election of each such director to
the Board. Only such individuals designated in accordance with Section 1(d) and
1(e) above, or in accordance with the provisions of this Section 2, shall be
eligible for nomination or election as successors to the New Independent
Directors. Subject to Section 2(c), if at any time a vacancy occurs on the Board
with respect to the directorship of any of the New Independent Directors (by
reason of such director’s death, disability, resignation, removal or otherwise),
the Company and the Purchaser agree to take all Necessary Actions to cause a
replacement director, designated by the Purchaser (or its permitted assignees),
to be appointed to fill such vacancy promptly following his or her designation
by the Purchaser (or permitted assignees) hereunder. If the Purchaser fails to
designate a replacement director to be appointed to fill such vacancy, the
Nominating and Governance Committee shall be permitted to designate a nominee
(who shall qualify as an Independent Director) for election to the Board to fill
such vacancy at the next succeeding annual meeting of shareholders of the
Company. If the Purchaser fails to designate a replacement director to be
appointed to fill such vacancy and the Nominating and Governance Committee
designates a nominee for election to the Board to fill such vacancy as provided
in the immediately preceding sentence, the Purchaser’s rights under Sections 1
and 2 hereof shall not be terminated and shall apply at the next succeeding
meeting of shareholders of the Company at which an election of directors occurs.

(c)                Termination of Purchaser Board Designation Rights.
Notwithstanding any other provision in Section 2(a) or Section 2(b) above:

(i)                 The obligations of the Company under this Agreement to take
all Necessary Actions to appoint, or to nominate for election, the Purchaser
Directors, or to appoint or nominate replacements thereto, and to take all
Necessary Actions to appoint any Purchaser Director to serve on the Committees
(as defined below), in each case as designated by the Purchaser in accordance
with this Agreement, shall only apply if the Purchaser and its members, and
their respective Affiliates, collectively maintain continuous beneficial
ownership of an aggregate of at least 100% of the shares of Common Stock
initially acquired at the Closing (subject to adjustment for stock splits, stock
dividends and other similar adjustments to the shares of Common Stock).
“Beneficial ownership” shall have the meaning provided in Rule 13d-3 promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended.

 

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(ii)               The obligations of the Company under this Agreement to take
all Necessary Actions to nominate the New Independent Directors, or to take all
Necessary Actions to appoint or nominate replacements thereto, and to take all
Necessary Actions to appoint any new Independent Director to serve on the
Committees (as defined below), in each case as designated by the Purchaser in
accordance with this Agreement, shall only apply if the Purchaser and its
members, and their respective Affiliates, collectively maintain continuous
beneficial ownership of at least 100% of the shares of Common Stock initially
acquired at the Closing (subject to adjustment for stock splits, stock dividends
and other similar adjustments to the shares of Common Stock).

(d)               Designation of Nominees. The Company shall give the Purchaser
written notice (the “Company Designation Request”) (i) requesting that the
Purchaser designate directors pursuant to the terms of Sections 2(a) and 2(b),
(ii) stating the Company’s intention to take all Necessary Actions to include
such designees in its upcoming proxy statement to shareholders, and (iii)
providing the date on which the proxy statement is to be mailed (the “Mailing
Date”), such Company Designation Request to be delivered not less than 45 days
prior to the Mailing Date. To designate a director pursuant to the provisions of
Sections 2(a) and 2(b), the Purchaser shall be required to have given the
Company written notice of the Purchaser’s designees, together with all
information relating to such designee or designees required to be included by
the Company in such proxy statement under applicable laws, including the federal
proxy rules (the “Designation Notice”), on or before the tenth day prior to the
Mailing Date (the “Designation Date”). If the Purchaser shall have failed to
designate nominees for election to fill any of the Purchaser Director or New
Independent Director slots on the Board as provided in this Section 2 by the
Designation Date, such director nominees shall instead be designated by the
Nominating and Governance Committee not later than two days before the Mailing
Date (the “Final Designation Date”), and such director shall, if elected, (i)
serve until the end of such director’s term and until his or her successor is
duly elected and qualifies, (ii) be an Independent Director (if not an Purchaser
Director), (iii) assume all Committee positions previously held by the prior
Purchaser Director or New Independent Director, as applicable, and (iv)
otherwise be deemed the Purchaser Director or New Independent Director, as
applicable, for purposes of this Agreement, until the next meeting of Company
shareholders at which the shareholders vote for the election of directors of the
class in which such Purchaser Director or New Independent Director serves.

(e)                Vacancies. If a vacancy shall have occurred in the position
of either Purchaser Director or any New Independent Director during any period
during which the Purchaser (or any permitted assignee thereof) has the right to
designate a replacement director to be appointed to fill such vacancy, yet the
Purchaser fails to designate a replacement director pursuant to Section 2(a) or
2(b), as applicable, for a period of more than 45 days after the vacancy in such
position has occurred, then and until such replacement is so named, the
replacement director for the Purchaser Director and/or New Independent Director
shall be designated by the Nominating and Governance Committee (i) to serve
until the end of such director’s term and until his or her successor is duly
elected and qualifies, (ii) be an Independent Director (if not an Purchaser
Director), (iii) assume all Committee positions previously held by the prior
Purchaser Director or New Independent Director, as applicable, and (iv)
otherwise be deemed the Purchaser Director or New Independent Director, as
applicable, for purposes of this Agreement.

 

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(f)                Chairman of the Board. At all times during which the
Purchaser has the right to designate the Purchaser Directors for election to the
Board, the Company agrees to take all Necessary Actions so that one of the
Purchaser Directors identified by the Purchaser shall be appointed to serve as
the Chairman of the Board.

(g)               Roberts Board Right. So long as Roberts continuously maintains
beneficial ownership of at least 1,100,000 shares of Common Stock (subject to
adjustment for stock splits, stock dividends and other similar adjustments to
the shares of Common Stock) during the one year period after the Closing Date,
the Company and the Purchaser agree to take all Necessary Actions to nominate
Roberts for re-election to the Board at any meeting of the shareholders of the
Company held after the Closing and before the first anniversary of the Closing
Date to consider a vote on the election of directors of the class in which
Roberts serves (or, to the extent the Company has de-classified the Board, which
the parties acknowledge is the Company’s intent, to consider a vote on the
election of all directors), and not to take any action that is designed to
interfere with the election or re-election of Roberts to the Board during such
one-year period. Roberts agrees to resign from the Board immediately upon the
first to occur of the following two events: (i) in the event he fails to
continuously maintain beneficial ownership of at least 1,100,000 shares of
Common Stock (subject to adjustment for stock splits, stock dividends and other
similar adjustments to the shares of Common Stock) and (ii) the first
anniversary of the Closing Date. While he serves as a director, Roberts shall be
authorized to incur, and shall be reimbursed for, all reasonable travel expenses
incurred in carrying out his duties as a director. “Reasonable” is defined as
that which enables Roberts to perform his duties as a director (including meals
and travel) comfortably but not extravagantly. Roberts shall provide to the
Company receipts or other reasonable documentation of such expenses for any
individual expenditure over $25, and the Company shall reimburse Roberts for
such expenses promptly and in any event not later than 30 days after Roberts
provides such documentation to the Company.

3.                  Committee Representation.

(a)                At or immediately following the Closing, the Company agrees
to take all Necessary Actions to set the number of directors on the Board’s (i)
Audit Committee, (ii) Compensation Committee, and (iii) Nominating and
Governance Committee (each a “Committee” and collectively, the “Committees”) at
three (3) directors per Committee.

(b)               At or immediately following the Closing, the Company agrees to
take all Necessary Actions to cause three of the New Independent Directors
designated by the Purchaser to be appointed, and thereafter to be re-appointed,
to serve on each of the Committees. The members of each Committee shall
designate a Committee Chairman from among such Committee members. If, at any
time, the Board determines that a director serving on a Committee does not
qualify as an Independent Director, the Company shall give prompt written notice
of such determination and the basis therefor to the director in question and the
Purchaser. Upon making such determination, or receiving notice thereof, the
director whom the Board has determined does not qualify as an Independent
Director shall resign from all Committees as soon as reasonably practical, and
the Purchaser shall designate a replacement director who qualifies as an
Independent Director to fill the vacancy created by such resignation.

 

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4.                  Voting. From and after the Closing,

(a)                The Purchaser agrees to vote all shares of Common Stock (and
any other shares of the Company’s capital stock held by Purchaser and entitled
to vote) beneficially owned by it and entitled to vote, and Roberts agrees to
vote all shares of Common Stock beneficially owned by him and entitled to vote,
in favor of the election or re-election, as the case may be, of the directors
designated by the Parties as provided in this Agreement at any meeting (or
written consent in lieu of a meeting) of the Company’s shareholders held to
consider the election of any such designated director; provided, however, that
(i) the Purchaser’s foregoing obligations with respect to the election of
Roberts as a director shall only apply while Roberts has the right to be
nominated for election as a director pursuant to Section 2(g) and (ii) Roberts’
foregoing obligations with respect to the election of the Purchaser Directors
and the New Independent Directors designated by the Purchaser for election as
directors shall terminate upon the first to occur of the termination of Roberts’
right to be nominated for election as a director pursuant to Section 2(g) and
Roberts’ resignation from the Board.

(b)               Roberts agrees to vote all shares of the Company’s capital
stock beneficially owned by him and entitled to vote in favor of any resolution
or proposal approved by a majority of the Independent Directors and recommended
by the Board for approval by shareholders of the Company; provided, however,
that Roberts’ voting obligations shall expire upon the first to occur of the
termination of Roberts’ right to be nominated for election as a director
pursuant to Section 2(g) and Roberts’ resignation from the Board. Such matters
may include, but are not limited to, any of the following matters, which the
Company and the Purchaser have stated that they intend to effectuate as soon as
is practicable after the Closing:

(i)                 Any proposal to reincorporate the Company as a Maryland
corporation, whether through an affiliated merger or otherwise;

(ii)               Any proposal to de-classify the Board of Directors of the
Company;

(iii)             Any proposal to effectuate a reverse split of the Company’s
common stock;

(iv)             Any proposal to amend the Company’s charter or bylaws to waive
the application of the corporate opportunity doctrine to the Purchaser Directors
with respect to investment opportunities identified by them or their Affiliates
for the benefit of the other investment funds and accounts managed by them or
their Affiliates; and

(v)               Any proposal to adopt an amended or restated charter of the
Company in furtherance of any of the foregoing matters that requires such an
amendment or restatement.

 

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(c)                So long as the Purchaser and its members, and their
respective Affiliates, collectively maintain continuous beneficial ownership of
an aggregate of at least 100% of the shares of Common Stock initially acquired
at the Closing (subject to adjustment for stock splits, stock dividends and
other similar adjustments to the shares of Common Stock), Roberts shall maintain
beneficial ownership of a sufficient number of shares of Common Stock that will
allow the Purchaser and Roberts to collectively maintain beneficial ownership of
a majority of the shares of Common Stock outstanding upon completion of the
Closing; provided, however, that Roberts’ obligations under this Section 4(c)
(i) shall expire upon the first to occur of the termination of Roberts’ right to
be nominated for election as a director pursuant to Section 2(g) and Roberts’
resignation from the Board and (ii) shall never require that Roberts purchase
additional shares of Common Stock.

5.                  Right of First Offer.

(a)                Grant. For a period of three (3) years following the Closing
(as defined in the Stock Purchase Agreement), subject to the terms of Section
5(d), Roberts hereby unconditionally and irrevocably grants to the Purchaser and
any of its Affiliates, collectively referred to as the Purchaser for this
Section 5, the right (the “Right of First Offer”), but not the obligation, to
purchase some or all of the Common Stock beneficially owned by Roberts
(“Transfer Stock”) with respect to any proposed assignment, sale, offer to sell,
disposition of or any other like transfer of the Transfer Stock (a “Proposed
Transfer”), at the price and on the same terms and conditions as those specified
in any Proposed Transfer Notice (as defined below).

(b)               Notice. In the event of a Proposed Transfer, Roberts must
deliver to the Purchaser a written notice setting forth the terms and conditions
of a Proposed Transfer (a “Proposed Transfer Notice”) not later than five (5)
business days prior to the consummation of such Proposed Transfer. Such Proposed
Transfer Notice shall contain the material terms and conditions (including
price) of the Proposed Transfer. To exercise its Right of First Offer, the
Purchaser must deliver a written notice notifying Roberts that the Purchaser
intends to exercise its Right of First Offer as to some or all of the Transfer
Stock with respect to any Proposed Transfer within five (5) business days after
Purchaser’s receipt of the Proposed Transfer Notice (“Purchaser Notice”).

(c)                Periods of Sale and Sale Price. If the Purchaser has not
delivered a Purchaser Notice and the five (5) business day period for the
Purchaser to deliver the Purchaser Notice has ended (“Refusal Date”), Roberts
may consummate a Proposed Transfer directly related to the Proposed Transfer
Notice only if the following conditions have been met: (i) for a sale price that
is 95% or more of the sale price specified in the Proposed Transfer Notice and
(ii) (a) within a period of ninety (90) days from the Refusal Date in the event
of a private, unregistered sale of Transfer Stock or (b) within a period of
fifteen (15) business days from the Refusal Date in the event of a publicly
registered sale of Transfer Stock. Any Proposed Transfer not consummated at the
price or within the timeframe referenced above will be subject to the
requirements referenced in Section 5(b).

 

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(d)               Exempted Transfers. Notwithstanding the foregoing or anything
to the contrary herein, the provisions of Section 5(a) and 5(b) shall not apply
to: (i) bona fide gifts of Common Stock beneficially owned by Roberts to the
immediate family members of Roberts or (ii) sales of Common Stock beneficially
owned by Roberts sold under Roberts’ 10b5-1 plan which plan currently allows
Roberts to sell up to 100,000 shares of Common Stock on a quarterly basis at a
price per share of at least $1.40. Roberts shall have the irrevocable right to
continue to have a 10b5-1 plan in accordance with applicable securities laws and
any sales under such 10b5-1 plan shall continue to be Exempted Transfers. The
Company shall take all Necessary Actions to enable Roberts to exercise his right
to continue to have a 10b5-1 plan for so long as Roberts is a director or
officer of the Company.

(e)                Closing. The closing of the purchase of Transfer Stock by the
Purchaser shall take place, and all payments from the Purchaser shall have been
delivered to Roberts, by the fifteenth (15th) day following the delivery of the
Purchaser Notice. Upon Purchaser’s payment of the purchase price to Roberts as
set forth in the Purchase Notice for the applicable number of shares of Common
Stock being purchased by Purchaser, Roberts shall deliver to Purchaser good,
valid and marketable title to such Transfer Stock being purchased, free and
clear of any and all liens, encumbrances, charges, claims, restrictions,
pledges, security interests or impositions, and shall execute and deliver to the
Purchaser an irrevocable stock power providing for the sale and assignment of
such Transfer Stock.

(f)                Effect of Failure to Comply.              (i) Transfer Void;
Equitable Relief. Any Proposed Transfer not made in compliance with the
requirements of this Section 5 shall be null and void ab initio, shall not be
recorded on the books of the Company or its transfer agent and shall not be
recognized by the Company. Each party hereto acknowledges and agrees that any
breach of this Section 5 would result in substantial harm to the other parties
hereto for which monetary damages alone could not adequately compensate.
Therefore, the parties hereto unconditionally and irrevocably agree that any
non-breaching party hereto shall be entitled to seek protective orders,
injunctive relief and other remedies available at law or in equity (including,
without limitation, seeking specific performance or the rescission of sales and
other transfers of Transfer Stock not made in accordance with this Section 5),
and the Company acknowledges and agrees to enforce the provisions of this
Section 5(f).

6.                  Severalty of Obligations. The obligations under this
Agreement of each Party and the separate and several obligations of that Party
and are not joint obligations with respect to any other person. No Party shall
be responsible or liable for the obligations of or any action taken or omitted
to be taken by any other Party hereunder.

7.                  Miscellaneous Provisions.

(a)                Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each
Party and delivered to each other Party. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic means shall be considered
original executed counterparts for purposes of this Section, provided that
receipt of copies of such counterparts is confirmed.

 

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(b)               Notices. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed effectively
given upon the earlier of actual receipt or: (a) personal delivery to the party
to be notified, (b) when sent, if sent by electronic mail during normal business
hours of the recipient, and if not sent during normal business hours, then on
the recipient’s next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d)
one (1) business day after deposit with a nationally recognized overnight
courier, freight prepaid, specifying next business day delivery, with written
verification of receipt. All communications shall be sent to the respective
parties at their address or email address as set forth on the signature page
hereof, or to such other address or email address as subsequently modified by
written notice given in accordance with this Section 7(b).

(c)                Governing Law. This Agreement shall be governed by and
construed in accordance with, the laws of the State of Georgia without regard,
to the fullest extent permitted by law, to the conflicts of law provisions
thereof which might result in the application of the laws of any other
jurisdiction.

(d)               Entire Agreement. This Agreement (including its exhibits,
appendices and schedules) and the other documents delivered pursuant to this
Agreement constitute a complete and exclusive statement of the agreement between
the Parties with respect to its subject matter, and supersede all other prior
agreements, arrangements or understandings by or between the Parties, written or
oral, express or implied, with respect to the subject matter of this Agreement.
This Agreement is not intended to confer upon any Person who is not a Party (or
their successors and assigns) any rights or remedies hereunder.

(e)                Specific Performance. The Parties acknowledge and agree that
a breach or threatened breach, of any agreement contained herein will cause
irreparable damage, and the other Parties will have no adequate remedy at law or
in equity. Accordingly, each Party agrees that injunctive relief or other
equitable remedy, in addition to remedies at law or in damages, is the
appropriate remedy for any such failure and will not oppose the granting of such
relief.

(f)                Assignment and Successors. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the Parties.
This Agreement and all the provisions hereof are personal to each of the
Parties, and except as otherwise provided in the next succeeding sentence, shall
not inure to a Party’s respective successors and may not be assigned by a Party
without the prior written consent of the other Parties. Any assignment in
violation of the foregoing shall be void and of no effect. Notwithstanding the
foregoing to the contrary, the Purchaser may assign its rights, benefits and
obligations under this Agreement, including but not limited to its rights to
designate the Purchaser Directors or New Independent Directors (or replacements
thereto) and its rights, benefits and obligations under Section 4 hereof, to any
Qualified Institutional Buyer that purchases all but not less than all of the
shares of Common Stock purchased by the Purchaser at the Closing.

(g)               Headings. The Section, Article and other headings contained in
this Agreement are inserted for convenience of reference only and will not
affect the meaning or interpretation of this Agreement.

 

10

 

(h)               Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by (i) the
Company and (ii) each Party then entitled to designate a director of the Company
pursuant to the provisions hereof (each Party described in this clause (ii)
being an “Amending Party,” it being understood, for purposes of this Section
7(h), that no Party entitled at any time to designate a director hereunder shall
cease to be an Amending Party unless and until such Party shall have expressly
and permanently surrendered, forfeited or assigned any and all of such
designation rights). Any Party may, only by an instrument in writing, waive
compliance by any other Party with any term or provision hereof on the part of
such other Party to be performed or complied with. The waiver by any Party of a
breach of any term or provision hereof shall not be construed as a waiver of any
subsequent breach.

(i)                 Interpretation; Absence of Presumption.

(i)                 For the purposes hereof, (A) words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held
to include the other gender as the context requires; (B) the terms “hereof,”
“herein,” “hereto” and “herewith” and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Article, Section and paragraph
references are to the Articles, Sections and paragraphs to this Agreement unless
otherwise specified; (C) the word “including” and words of similar import when
used in this Agreement shall mean “including, without limitation,” unless the
context otherwise requires or unless otherwise specified; (D) the word “or”
shall not be exclusive; and (E) provisions shall apply, when appropriate, to
successive events and transactions.

(ii)               This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the Party
drafting or causing any instrument to be drafted.

(iii)             Capitalized terms used herein but not otherwise defined shall
have the meanings set forth in the Stock Purchase Agreement.

(j)                 Severability. If any provision of this Agreement or the
application of such provision to any Person or circumstances shall be held
invalid or unenforceable by a court of competent jurisdiction, such provision or
application shall be unenforceable only to the extent of such invalidity or
unenforceability, and the remainder of the provision held invalid or
unenforceable and the application of such provision to Persons or circumstances,
other than the Party as to which it is held invalid, and the remainder of this
Agreement, shall not be affected.

(k)               Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION
AGREEMENTS OR THE TRANSACTIONS. EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, AS APPLICABLE, BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(k).

 

11

 

(l)                 Further Assurances. The Parties agree that, from time to
time, each of them will, and will cause their respective Affiliates to, execute
and deliver such further instruments and take such other action as may be
necessary to carry out the purposes and intents hereof.

(m)             Share Adjustments. All references to numbers of shares in this
Agreement shall be appropriately adjusted to reflect any stock dividend, split,
combination or other recapitalization affecting such shares occurring after the
date of this Agreement.

[Signature pages follow.]

 

12

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the
day and year first above written.

 

  COMPANY:           ROBERTS REALTY INVESTORS, INC.  

 

 

  By: /s/ Charles S. Roberts     Name:    Charles S. Roberts     Title: CEO and
President  

 

 

  Address:
c/o Avenue Capital Group
399 Park Avenue
New York, New York 10022
Attention: Edward Gellert
Telephone: 212-850-7534
Email: egellert@avenuecapital.com           THE PURCHASER:           A-III
INVESTMENT PARTNERS LLC  

 

 

  By: /s/ Edward Gellert     Name:   Edward Gellert     Title: Authorized
Signatory  

 

 

  Address:
c/o Avenue Capital Group
399 Park Avenue
New York, New York 10022
Attention: Edward Gellert
Telephone: 212-850-7534
Email: egellert@avenuecapital.com           ROBERTS:                     /s/
Charles S. Roberts     Signature           Address:
375 Northridge Road
Suite 330
Atlanta, GA 30350
Attention: Charles S. Roberts
Telephone: 770-394-6000
Email: cr@robertsproperties.com  

 

 

Signature Page to Governance and Voting Agreement

 

 

 

 

Exhibit A

 

[________________] [__], 20[__]

 

Board of Directors

Roberts Realty Investors, Inc.

 

 

To the Board of Directors:

 

I hereby tender my conditional resignation, as a member of the board of
directors of Roberts Realty Investors, Inc. (the “Company”), and as a member of
any and all committees thereof, upon the terms set forth herein. I acknowledge
that (i) my execution and delivery of this letter is a condition to my
eligibility to serve in such capacity, (ii) this letter shall be deemed
reaffirmed, upon each and every subsequent instance of my election or
re-election to the board of directors of the Company, by my acceptance of such
position (whether or not in writing) without the requirement of re-execution or
re-delivery of a letter of like tenor, and (iii) other than with respect to the
conditions set forth herein, this letter shall be irrevocable.

 

My resignation herein tendered shall be effective upon, and only upon, a
determination by the board of directors of the Company that I do not satisfy the
independence standards of both (1) the Company’s charter and bylaws, as in
effect on the date hereof, and (2) the NYSE MKT or such other exchange as the
Company’s shares of Common Stock are then listed.

 

Sincerely,

 

 

 

[INSERT NAME OF DIRECTOR]