Exhibit 10.3


 


SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT


 


THIS SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT (this “Amendment”), is made and entered into as of this 20th day of February, 2015 (the
“Date of Amendment”), by and between PARK KINGSTON INVESTORS, LLC, a North Carolina limited liability company
(“Seller”), and BLUEROCK REAL ESTATE, L.L.C., a Delaware limited liability company (“Buyer”).


 


WITNESSETH:


 


WHEREAS, Buyer and Seller
entered into that certain Purchase and Sale Agreement dated January 15, 2015, as amended by that certain Amendment to Purchase
and Sale Agreement dated January 17, 2015 (as amended, the "Purchase and Sale Agreement"), for purchase of that
certain apartment complex which is commonly known as Park & Kingston, located in the City of Charlotte, Mecklenburg County,
North Carolina, and which is more particularly described on Schedule B-1 and Schedule B-2 to the Purchase and Sale Agreement;


 


WHEREAS, in accordance
with Section 6.02 of the Purchase and Sale Agreement, Buyer desires to provide Seller notice of its election to proceed with the
transaction contemplated by the Purchase and Sale Agreement, as amended hereby;


 


WHEREAS, in accordance
with Section 8.02 of the Purchase and Sale Agreement, Buyer desires to provide Seller notice of which Service Contracts Buyer has
elected to cause Seller to terminate (but with certain qualification as more particularly discussed in Paragraph 2 of this Amendment);


 


WHEREAS, Seller and Buyer
also desire to amend the Purchase and Sale Agreement as set forth herein; and


 


WHEREAS, except as otherwise
expressly provided for herein, capitalized terms used herein shall have the meaning as set forth in the Purchase and Sale Agreement.


 


NOW, THEREFORE, in consideration
of the mutual covenants and agreements contained herein, Seller and Buyer agree as follows:


 


1.          Election
to Proceed. Pursuant to Section 6.02 of the Purchase and Sale Agreement, Buyer hereby provides notice of its election to proceed
with the transaction as contemplated by the Purchase and Sale Agreement, as amended hereby.


 


2.          Service
Contracts.         Pursuant to Section 8.02 of the Purchase and Sale Agreement,
Buyer hereby delivers notice of which Service Contracts Buyer has elected to cause Seller to terminate, such Service Contracts
being listed on Exhibit A attached hereto; provided, however, that Seller shall not terminate the submetering contract
with Conservice or either compactor rental contracts with Republic Waste unless and until receiving further written notice to
do so from Buyer. To the extent Buyer elects to terminate the submetering contract with Conservice or either compactor rental
contracts with Republic Waste, then Buyer agrees to pay all costs and fees associated with such termination.


 




    	 



    	 



    

 


3.          Purchase
Price. Section 2.01 of the Purchase and Sale Agreement shall be amended by deleting "$31,250,000.00" and replacing
it with "$30,720,000.00", so that the Purchase Price of the Property shall be $30,720,000.00.


 


4.          Extension
Deposit. Section 2.03(c) of the Purchase and Sale Agreement shall be amended by removing any reference to the Extension Deposit,
so that the Deposit shall consist only of the Initial Deposit, the Additional Deposit and the Final Deposit.


 


5.          Extension
Deposit Receipt. Section 2.04 of the Purchase and Sale Agreement shall be amended by removing any reference to the Extension
Deposit or the Extension Deposit Receipt. The Extension Deposit Receipt, which is attached to the Purchase and Sale Agreement as
an Escrow Agent signature page, shall be removed and deleted from the Purchase and Sale Agreement.


 


6.          Phase
I Closing Date. Section 3.01 of the Purchase and Sale Agreement shall be amended by deleting the first (1st) paragraph
of said Section 3.01 and replacing it with the following, so that the Phase I Closing Date shall be March 16, 2015:


 


3.01         Except
as otherwise provided in this Agreement, the Closing for the Phase I Real Property shall be conducted through an escrow administered
by Escrow Agent by means of concurrent delivery of the documents described in Sections 9 and 10 below and the applicable portion
of the Purchase Price on March 16, 2015 (the “Phase I Closing Date”), or such earlier date or place as Buyer
and Seller shall mutually agree in writing.


 


7.          Conditions
Precedent. New subsections viii, ix, x and xi of Section 3.02 shall be added to the Purchase and Sale Agreement which shall
state as follows:


 


viii.         Seller
shall complete the Pre-Closing ADA Compliance Actions, as such term is defined in Section 16.20 of this Agreement.


 


ix.         Seller
shall record a modification to that certain Post-Construction Stormwater Best Practices Operations and Maintenance Agreement and
Easement Agreement, by and between Park Kingston Investors, LLC and the City of Charlotte recorded in Book 28993, Page 804, Official
Records of Mecklenburg County, North Carolina (the "Stormwater Agreement"), which modification shall be executed
by Seller and the City of Charlotte and include exhibits, acceptable to Purchaser, Seller and the City of Charlotte in their mutual
reasonable discretion, which were omitted from said instrument as originally recorded; provided, however, if the City of Charlotte
is unwilling to execute the foregoing or cooperate with Seller or Buyer in this regard, then such event shall not be deemed an
event of default on the part of Seller hereunder. 


 




    	 



    	 



    

 


x.         Seller
shall provide to the City of Charlotte the Declaration of Transfer of Inspection/Maintenance Responsibilities of Stormwater BMP
Facilities in the form necessary to satisfy Paragraph 11 of the Stormwater Agreement.


 


xi.            Buyer
shall have obtained written confirmation from its lender that such lender has approved the environmental condition of the Property
without imposing any additional conditions upon Buyer in connection with such approval, including, without limitation, any expansions
or enhancements to the lender's standard carve-outs to non-recourse liability; provided, however, if Buyer does not waive this
condition xi. on or before 5:00 pm Eastern Time on February 27, 2015, then Seller thereafter shall have the right, but not the
obligation, to terminate this Purchase and Sale Agreement by delivering written notice thereof to Buyer, in which event, the entire
Deposit shall be returned to Buyer and neither party shall have any further obligation to the other hereunder, except for those
matters which would otherwise survive termination pursuant to the terms hereof.


 


8.          Representations
and Warranties Regarding Stormwater Agreement. New subsections (m) and (n) of Section 5.01 shall be added to the Purchase and
Sale Agreement immediately after subsection (l) of Section 5.01 which shall state as follows:


 


(m)          to
Seller's knowledge (which knowledge is based solely on assurances from Seller’s engineers), the BMP Facilities, as such term
is defined in the Stormwater Agreement, were constructed in accordance with the approved plans and specifications attached hereto
as Schedule 5.01(m) as well as the City of Charlotte Post-Construction Stormwater Ordinance (§18-101 et. seq. of the Charlotte
City Code of Ordinances) and Seller is in compliance with all inspection obligations for said BMP Facilities as set forth in Paragraph
7 of the Stormwater Agreement. 


 


(n)          to
Seller's knowledge, Seller is not in default under the Stormwater Agreement, nor has Seller received any notice from the City of
Charlotte, Charlotte-Mecklenburg Storm Water Services, or any other party with the authority to enforce the restrictions and covenants
within the Stormwater Agreement, of any such default or any pending default under said Stormwater Agreement.


  




    	 



    	 



    

 


9.          ADA
Escrow. A new Section 16.20 shall be added to the Purchase and Sale Agreement, which shall state as follows:


 


16.20         ADA
Compliance.


 


(a)          At
Closing, Seller shall deposit into escrow with Escrow Agent an amount equal to $107,750.00, but subject to adjustment
pursuant to subsection (b) below (the "Escrowed ADA Funds") to cure certain Americans with Disabilities Act
("ADA") deficiencies which are highlighted blue on the spreadsheet attached hereto as Schedule
16.20.1 (the “Post-Closing ADA Compliance Actions”). On or prior to the Phase I Closing Date, Seller
and Buyer shall enter into an escrow agreement with Escrow Agent (the "ADA Escrow Agreement") whereby Buyer
shall have the right to draw upon the Escrowed ADA Funds to pay costs and expenses associated with the Post-Closing ADA
Compliance Actions. If the Escrowed Funds are not sufficient to perform all of the Post-Closing ADA Compliance Actions, any
additional cost shall be borne entirely by Buyer. The ADA Escrow Agreement shall provide that it will expire no later than
three (3) years after the Phase I Closing Date, after which any remaining Escrowed ADA Funds shall be returned to
Seller.


 


(b)          To
the extent any of the Post-Closing ADA Compliance Actions are completed by Seller (to the reasonable satisfaction of Buyer) prior
to the Phase I Closing Date, then the Escrowed ADA Funds shall be reduced by an amount proportional to the Post-Closing ADA Compliance
Actions so completed by Seller and in accordance with the cost schedule set out in Schedule 16.20.2 attached hereto.


 


(c)          Prior
to the Phase I Closing Date, Seller shall perform those installations and repairs necessary to cure certain other ADA deficiencies
which are highlighted yellow on the spreadsheet attached hereto as Schedule 16.20.1 (the "Pre-Closing ADA Compliance
Actions"). Failure to complete the Pre-Closing ADA Compliance Actions shall constitute the failure of a condition precedent
to Buyer's obligation to consummate the transaction pursuant to Section 3.02 of this Agreement.



 


10.         Intentionally
Deleted.


 


11.         Allocated
Purchase Price. Schedule A to the Purchase and Sale Agreement shall be amended to reflect the new Purchase Price by deleting
"$3,400,000.00" as the Allocated Purchase Price for Phase II and replacing it with "$2,870,000.00", so that
the Allocated Purchase Price for Phase II shall be $2,870,000.00. Schedule A to the Purchase and Sale Agreement shall also be amended
by removing the column labeled "Allocated Portion of the Extension Deposit."


 


12.         Entirety
and Amendments. The Purchase and Sale Agreement, as amended hereby, embodies the entire agreement between the parties
and supersedes all prior agreements and understandings relating to the Property. There are no oral agreements or understandings
between the parties that are not expressly set forth in the Purchase and Sale Agreement, as amended hereby. 


 


13.         Continued
Effect. Except as amended hereby, the Purchase and Sale Agreement shall remain in full force and effect in accordance with
its original terms and conditions.


 




    	 



    	 



    

 


14.         Counterpart
and Facsimile Execution. This Amendment may be executed in a number of identical counterparts, and an electronic or facsimile
transmission shall be binding on the party or parties whose signatures appear thereon. If so executed, each of such counterparts
is to be deemed an original for all purposes, and all such counterparts shall, collectively, constitute one agreement.


[SIGNATURES ON NEXT PAGE]


 




    	 



    	 



    

 


IN WITNESS WHEREOF, the parties hereto have
executed this Amendment under seal as of the Date of Amendment.


 


	 	SELLER:
	 	 
	 	PARK KINGSTON INVESTORS, LLC
	 	a North Carolina limited liability
	 	 
	 	By: 	/s/ George S. Warren
	 	Name:	George S. Warren
	 	Title:	Executive Vice President,
    Marsh Properties, LLC,
	 	 	its Manager
	 	 
	 	BUYER:
	 	 
	 	BLUEROCK REAL ESTATE, L.L.C.
	 	a Delaware limited liability company
	 	 
	 	By: 	/s/ Jordan Ruddy
	 	Name:	Jordan Ruddy
	 	Title:	Authorized Signatory


 




    	 



    	 



    

 


EXHIBIT A


 


LIST OF SERVICE CONTRACTS
TO TERMINATE


 


	Supplier	 	Service Provided
	TASCO	 	Answering Service
	Conservice	 	Submetering
	Republic Waste	 	Compactor Rental
	Republic Waste	 	Compactor Rental


 




    	 



    	 



    

 


SCHEDULE 5.01(m)


 


APPROVED
PLANS AND SPECIFICATIONS FOR BMP FACILITIES


 


[BEGINS
ON NEXT PAGE]


 




    	 



    	 



    

 


SCHEDULE 16.2.1


 


ADA
COMPLIANCE SPREADSHEET


 


[BEGINS
ON NEXT PAGE]


 




    	 



    	 



    

 


SCHEDULE 16.2.2


 


ADA
COMPLIANCE COST SCHEDULE


 


	Task	 	Number	 	 	Cost	 	 	Total	 
	Repair shower D unit	 	 	8	 	 	$	3,000	 	 	$	24,000	 
	Repair kitchen sink E unit	 	 	16	 	 	$	3,000	 	 	$	48,000	 
	Move outlet C unit	 	 	75	 	 	$	250	 	 	$	18,750	 
	Move switch E unit	 	 	24	 	 	$	250	 	 	$	6,000	 
	Contingency	 	 	 	 	 	 	 	 	 	$	11,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total	 	 	123	 	 	 	 	 	 	$	107,750