Unassociated Document


    CONTRACT OF PURCHASE AND
SALE

     

    THIS
CONTRACT OF PURCHASE AND SALE (this “Contract”) is made as
of the 29th day of September, 2010, by and between OXFORD RISE PARTNERS LLC, a
Georgia limited liability company (“Oxford”) and WILLIAMS OPPORTUNITY
FUND, LLC, a Georgia limited liability company (“Williams”; Oxford and Williams
are hereinafter referred to individually as a “Seller” and collectively as
“Sellers”), and PREFERRED APARTMENT COMMUNITIES, INC., a Maryland corporation
(“Buyer”).

     

    RECITALS:

     

    1.           Sellers
are the owners of all of the membership interests in Oxford Rise JV LLC, a
Delaware limited liability company (the “Company”), including, without
limitation, all of Sellers’ right, title and interest in and to the capital,
profits and losses of the Company and its assets, property, rights, and
privileges, both real, personal and mixed, tangible and intangible, of every
kind and character whatsoever, including, without limitation, all monies and
distributions of property now due or to become due (herein referred to
collectively as the “Membership Interests”).

     

    2.           The
assets of the Company include the “Property” (as hereinafter defined) located at
900 Selwyn Place, West Vincent Township, Chester County, Pennsylvania,
consisting of a 216 unit apartment complex and related facilities more commonly
known as the Oxford Rise Apartments.

     

    3.           Sellers
desire to sell to Buyer, and Buyer desires to purchase from Sellers, on the
terms and conditions hereinafter set forth, the Membership Interests of Sellers,
including, without limitation, Sellers’ interest, through the Company, in the
Property, it being the intent of Sellers to transfer unto the Buyer all of
Sellers’ right, title and interest in and to the Company, its capital, profits,
losses and distributions and all the Company’s real and personal property and
assets of every type and description whatsoever and wherever
located.

     

    CONTRACT

     

    In
consideration of the agreements of Sellers and Buyer contained herein, the
receipt and sufficiency of which are hereby acknowledged, Sellers and Buyer,
each intending to be legally bound, agree and provide as follows:

     

    1.           Purchase and
Sale.

     

    Sellers
agree to sell and convey to Buyer, and Buyer agrees to purchase from Sellers,
for the purchase price and on the terms and conditions hereinafter set forth,
the Membership Interests, including, without limitation, the Company’s interest
in the following property:

     

    
      	
               
      

            	
              (A)

            	
              The
      land described in Exhibit “A”,
      which is attached hereto and incorporated herein by reference, together
      with all right, title and interest, if any, of the Company in and to the
      land lying within any street or roadway adjoining said land or any vacated
      or hereafter vacated street or alley adjoining said land (collectively,
      the “Land”);

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (B)

            	
              All
      structures, improvements, fixtures, and other items that constitute real
      property located on the Land (the “Improvements”);

            


    

     

    
      	
               
      

            	
              (C)

            	
              All
      easements and rights appurtenant to and/or benefiting all or any portion
      of the Land, (the “Easements”);

            


    

     

    
      	
               
      

            	
              (D)

            	
              All
      of the tangible personal property owned by the Company and used in
      connection with the operation, ownership, management or maintenance of the
      Land or the Improvements, including, without limitation, those items set
      forth on Exhibit
      “B” attached hereto and incorporated herein by reference
      (collectively, the “Tangible Personal
      Property”);

            


    

     

    
      	
               
      

            	
              (E)

            	
              All
      intangible assets relating to the Land, the Improvements or the Tangible
      Personal Property, including, without limitation, any warranties or
      guaranties relating to the foregoing, any trade or business name(s) for
      the Land, Improvements and/or Tangible Personal Property (including,
      without limitation, the name “Oxford Rise”), all telephone exchanges for
      the Improvements, and all licenses, permits and certificates of occupancy
      for the Land, Improvements and Tangible Personal Property (collectively,
      the “Other
      Assets”); provided, however, the use of the name “Oxford Rise”
      shall be limited to Buyer and its permitted assignee hereunder, and only
      as long as John A. Williams holds an executive position with Buyer and its
      permitted assignee hereunder;

            


    

     

    
      	
               
      

            	
              (F)

            	
              All
      service and other contracts pertaining to the ownership, use, operation,
      maintenance or repair of the Land or the Improvements, including without
      limitation, the contracts listed on Exhibit “C”
      attached hereto and made a part hereof and which Buyer elects to assume at
      closing (the “Contracts”);
      and

            


    

     

    
      	
               
      

            	
              (G)

            	
              All
      leases and occupancy Contracts for all or any part of the Land and/or
      Improvements and all amendments thereto, all as described in Exhibit “D”
      attached hereto and incorporated herein by reference, together with those
      leases, occupancy Contracts, and amendments thereto which may be entered
      into after the date hereof as provided herein (each, individually, a
      “Lease,”
      and all collectively referred to as the “Leases”), and
      all security deposits, pet deposits and other deposits owned by the
      Company in connection therewith (collectively, the “Security
      Deposits”).

            


    

     

    The
Company’s right, title and interest in and to the Land, the Improvements, the
Easements, the Tangible Personal Property, the Other Assets, the Contracts, the
Leases and the Security Deposits are collectively referred to herein as the
“Property”.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.           Purchase
Price.

     

    Subject
to the adjustments hereinafter set forth, the purchase price (the “Purchase Price”) to
be paid to Sellers by Buyer for the Membership Interests shall be Thirty Million
One Hundred Fifty Thousand and No/100 Dollars ($30,150,000.00) (the “Purchase Price”).
Sellers and Buyer acknowledge and agree that the Purchase Price
was determined by taking the average of the fair market value of the
Property established by two independent appraisals of the Property (the
“Appraisals”) commissioned by Buyer and conducted by CB Richard Ellis and
Cushman & Wakefield (collectively, the ‘Appraisers”). Sellers acknowledge
and agree that the Company shall be solely responsible for the payment of any
pre-payment penalty under the existing indebtedness (the “Existing
Indebtedness”) of Principal Life Insurance Company and Wachovia Bank, National
Association (collectively, “Lender”) encumbering the Property, and such
pre-payment penalty shall be deducted from the Purchase Price and paid to Lender
as a disbursement on Sellers’ behalf at Closing.

     

    The
Purchase Price shall be payable, as adjusted for the prorations and other
payments and credits specified in this Contract, by wire transfer of immediately
available U.S. Federal Funds at Closing through the Title Company to an account
designated in writing by Sellers.

     

    Sellers
and Buyer further agree that Sellers shall, on the date which is one year after
the Closing Date (the “Earn Out Date”), have two independent appraisals of the
Property conducted by the Appraisers for the purpose of determining the fair
market value of the Property as of the Earn Out Date. In the event the average
of the fair market value of the Property on the Earn Out Date (the “Earn Out
Value”) established by such appraisals of the Property is higher than the
Purchase Price, Sellers shall receive cash equal in value to the difference
between the Purchase Price and the Earn Out Value (the “Earn Out Payment”).
Provided, however, in the event that Buyer incurs out-of-pocket damages, costs
and expenses (including, without limitation, reasonable attorneys’ fees actually
incurred and court costs) after the Closing arising out of the breach by
Sellers’ of (i) their representations and warranties in Section 4 herein, or
(ii) any surviving indemnity of Sellers’ described herein, including, without
limitation, those contained in Section 20 herein, the amount of such damages,
costs and expenses incurred by Buyer shall be deducted from the Earn Out Payment
due Sellers by Buyer. Sellers and Buyer shall each pay one-half of the cost of
such appraisals.

     

    Sellers
and Buyer covenant and agree that their agreement to sell and purchase the
Membership Interests, respectively, together with Sellers’ and Buyer’s other
covenants contained herein, including, without limitation, Sellers’ covenants in
Section 7 herein and Buyer’s out-of-pocket expenses to be paid (i) to Buyer’s
attorneys in connection with the negotiation of this Contract and matters
related thereto, (ii) to any prospective lender as an application or commitment
fee, (iii) to CB Richard Ellis and Cushman & Wakefield for the Appraisals,
and (iv) to unrelated and unaffiliated third party consultants in connection
with the performance of examinations, inspections and/or investigations pursuant
to this Contract, constitutes good and valuable consideration and mutuality
under this Contract.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    3.           Closing.

     

    Provided
all conditions precedent to Sellers’ and Buyer’s respective obligations under
this Contract have been satisfied or waived in writing by the party entitled to
the benefit thereof, the consummation of the transaction contemplated hereby
(the “Closing”)
shall take place in escrow through the Title Company (as hereinafter defined) on
the later to occur of (i) the date which is thirty (30) days after the
expiration of the Inspection Period (as hereinafter defined), or (ii) the date
which is within five (5) business days following the closing of the initial
public offering of Preferred Apartment Communities, Inc. class A common stock
(the date of closing of such initial public offering is referred to herein as
the “IPO Closing Date”) pursuant to its registration statement on Form S-11,
Registration No. 333-168407, that was initially filed with the Securities and
Exchange Commission on July 29, 2010 (the day of Closing is herein referred to
as the “Closing
Date”); provided, however, in no event shall the Closing Date extend
beyond December 15, 2010.

     

    4.           Representations and
Warranties.

     

    Sellers,
as an inducement to Buyer to enter into this Contract, represent and warrant to
Buyer, and shall reaffirm to Buyer the continuing validity of such
representations and warranties at the Closing, as follows (which representations
and warranties shall survive the Closing Date for a period of one (1)
year):

     

    
      	
            	
              (A) 

            	
              Sellers
      are limited liability companies, duly organized and validly existing under
      the laws of the State of Georgia and are in good standing under the laws
      of the State of Georgia. All actions necessary to confer such power and
      authority upon the persons executing this Contract have been
      taken;

            


    

     

    
      	
            	
              (B) 

            	
              Sellers
      have the full right, power and authority to enter into and perform their
      obligations under this Contract and to convey the Membership Interests to
      Buyer as provided herein. The execution, delivery and performance of this
      Contract by Sellers does not and will not violate the organizational
      documents of Sellers, including, without limitation, that certain Limited
      Liability Company Agreement of Oxford Rise JV LLC dated May 9, 2007 (the
      “Operating Agreement”), or any contract, order, judgment or decree to
      which Sellers are a party or by which they or the Property is bound. The
      documents to be executed and delivered by Sellers at Closing pursuant to
      this Contract will be, at Closing, duly authorized, executed and delivered
      by Sellers and, at the Closing, will be legal, valid and binding
      obligations of Sellers and will not violate the provisions of any
      contract, order, judgment or decree to which the Sellers is a party or by
      which it or the Property is bound;

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (C)

            	
               The
      copy of the Operating Agreement previously provided by Sellers to Buyer is
      a true, correct and complete copy in effect on the date of this
      Contract;

            


    

     

    
      	
            	
              (D)

            	
              No
      suit or proceeding for the dissolution or liquidation of the Company has
      been instituted or is now
threatened;

            


    

    


    
      	
            	
              (E) 

            	
              The
      Company has no subsidiaries;

            


    

    


    
      	
            	
              (F)

            	
              The
      Company has no employees;

            


    

    


    
      	
            	
              (G) 

            	
              The
      Company has no Employee Benefit Plan. As used herein, “Employee Benefit
      Plan” means each “employee benefit plan” as defined in Section 3(3) of the
      Employee Retirement Income Security Act of 1974 (as amended, “ERISA”), and
      each other plan, policy, program, agreement, understanding and arrangement
      (whether written or oral) providing compensation or other benefits to any
      current or former director, officer, employee or consultant (or to any
      dependent or beneficiary thereof) of the Company which is now or has been
      maintained, sponsored, entered into or contributed to by the Company or
      under the terms of which the Company has or is reasonably likely to have
      any obligation or liability, whether actual or contingent, including,
      without limitation, all employment, consulting, severance, termination,
      incentive, bonus, deferred compensation, retention, retirement, pension,
      savings, profit sharing, retention, change in control, vacation, holiday,
      cafeteria, medical, health, dependent care, disability, life, accident,
      fringe benefit, welfare and stock-based or stock-linked compensation
      plans, policies, programs, agreements, understandings or
      arrangements;

            


    

    


    
      	
            	
              (H) 

            	
              Sellers
      have provided to Buyer all policies or binders of insurance of any kind or
      nature covering the Company or any of its properties or assets. All such
      policies are in full force and effect and are sufficient for compliance
      with all applicable laws and of all contracts to which the Company is a
      party. To the best of Sellers’ knowledge, the Company is not in default
      under any of such policies or binders, and the Company has not failed to
      give any notice or to present any claim under any such policy or binder in
      a due and timely fashion. To the best of Sellers’ knowledge, there are no
      facts upon which an insurer might be justified in reducing coverage or
      increasing premiums on existing policies or binders. There are no
      outstanding unpaid claims under any such policies or binders. Such
      policies and binders provide sufficient coverage for the risks insured
      against, are in full force and effect as of the date
    hereof;

            


    

    


    
      	
            	
              (I) 

            	
              Sellers
      are the owners of all of the membership interests in the
      Company;

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (J) 

            	
              Sellers
      own the Membership Interests free and clear of any security agreements,
      financing statements, liens, encumbrances, security interests or other
      claims of any kind, other than liens and encumbrances of record affecting
      the Property. The Membership Interests constitute all of Sellers’ interest
      in the Company, and Sellers have not entered into any side letters or
      other written instruments relating to their interest in the Company other
      than the Operating Agreement and any other agreement provided to or
      otherwise actually known to Buyer that relates to the
      Property;

            


    

     

    
      	
            	
              (K) 

            	
              Sellers
      have not conveyed or assigned any of its right, title or
      interest  in the Membership Interests to any third party,
      including any affiliates or related parties of Sellers. Sellers have not
      granted to any party any option, contract or other agreement with respect
      to the Membership Interests or any portion thereof or any interest
      therein. To Sellers’ knowledge, there are no attachments, executions or
      assignments of Sellers’ rights in the Membership Interests for the benefit
      of creditors, or voluntary or involuntary proceeds in bankruptcy or under
      any other debtor-relief laws pending or threatened against
      Assignor;

            


    

     

    
      	
            	
              (L) 

            	
              To
      the best of Sellers’ knowledge, no consent, approval, order or
      authorization of, or  registration, qualification, designation,
      declaration or filing with, any federal, regional, state or local
      governmental authority on the part of Sellers are required in connection
      with the consummation of the transactions contemplated by this Contract,
      or if the same is required, such consent, approval, order or authorization
      has been obtained, or such registration, qualification, designation,
      declaration or filing has been completed and satisfied, and any costs,
      fees or expenses associated therewith have been paid in full by
      Sellers;

            


    

     

    
      	
            	
              (M) 

            	
              Except
      as and to the extent reflected and adequately reserved against in the
      balance sheet of the Company provided to Buyer by Sellers, the Company has
      no material liability or obligation whatsoever, whether accrued, absolute,
      contingent or otherwise;

            


    

     

    
      	
            	
              (N) 

            	
              Except
      as set forth herein, to the best of Sellers’ knowledge, all tax returns of
      every kind (including, without limitation, returns of all income taxes,
      franchise taxes, real and personal property taxes, intangibles taxes,
      withholding taxes, employee compensation taxes and all other taxes of any
      kind applicable to the Company) that are due to have been filed in
      accordance with applicable law have been duly filed; and all taxes shown
      to be due on such returns have been paid in full. The amounts so paid have
      been adequate to pay all income, franchise, real and personal property,
      intangibles, withholding and employment compensation taxes and all other
      taxes of any kind whatsoever, including interest and penalties, due and
      payable by the Company for all periods ending on or before the date
      hereof. No deficiencies for any of such taxes have been asserted or
      threatened, and no audit of any such returns is currently underway or, to
      the knowledge of the Sellers, threatened. There are no outstanding
      agreements by the Company for the extension of time for the assessment of
      any tax. Notwithstanding the foregoing, Buyer acknowledges that Sellers
      have appealed the property tax assessment for the Property pursuant to the
      appeal procedures established by the municipality in which the Property is
      located, and Sellers final payment of the subject property taxes will not
      be completed until such appeal process is concluded in accordance with the
      appropriate appeal procedures, and Seller represents that funds necessary
      to pay property taxes have been accrued by the Company and are on account
      with the Company's lender for payment when the final amount of such
      property taxes is due;;

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (O) 

            	
              The
      Company is not a “foreign person”, as that term is defined in Section 1445
      of the Internal Revenue Code of 1986, as
  amended;

            


    

     

    
      	
            	
              (P) 

            	
              To
      the best of Sellers’ knowledge, there are no actions, suits, judgments,
      summonses or proceedings pending relating to or arising out of any actual
      or alleged violation or breach of any code, law, rule, requirement or
      regulation of any entity or authority having jurisdiction over the
      Property, the Company has received no notice of any alleged violation of
      any codes, ordinances, laws, rules, regulations or private restrictions
      affecting the Property, and Sellers shall cause the Company to promptly
      deliver any such notice, whether received prior to or after Closing, to
      Buyer (which covenant shall survive Closing but shall not be limited by
      the one-year limitations period prescribed for the representations and
      warranties contained in this Section
4);

            


    

     

    
      	
            	
              (Q) 

            	
              There
      are no eminent domain, condemnation or similar proceedings pending, or, to
      the best of Sellers’ knowledge, threatened with respect to the Property or
      any portion thereof;

            


    

     

    
      	
            	
              (R) 

            	
              There
      are no leases, subleases, licenses or other rental or occupancy contracts
      (oral or written) with respect to or affecting the Property other than the
      Leases set forth on the rent roll attached hereto as Exhibit “D” and
      incorporated herein by reference (the “Rent
      Roll”);

            


    

     

    
      	
            	
              (S) 

            	
              There
      are no service or maintenance contracts or other contracts now in force
      between the Company and any other party with respect to or affecting the
      Property, except for the Contracts set forth on Exhibit “C”
      attached hereto and by reference incorporated herein, and Sellers has
      delivered to Buyer true, correct and complete copies of all of the
      Contracts and all amendments thereto set forth on Exhibit “C”. To
      the best of Sellers’ knowledge, none of the parties to the Contracts is in
      default of its obligations thereunder, and each of the Contracts is in
      full force and effect;

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (T) 

            	
              Sellers
      have no actual knowledge of any noncompliance or violation of
      Environmental Laws (hereinafter defined) related to the Property or the
      presence or release of Hazardous Materials (hereinafter defined) on or
      from the Property except as disclosed in any environmental reports in
      Sellers’ possession which will be delivered to Buyer on or before the
      Effective Date of this Contract. The term “Environmental
      Laws” shall include, without limitation, the Clean Air Act, 42
      U.S.C. § 7401 et seq.; the Clean
      Water Act, 33 U.S.C. § 1251 et seq., and the
      Water Quality Act of 1987; the Federal Insecticide, Fungicide, and
      Rodenticide Act (“FIFRA”), 7
      U.S.C. § 136 et seq.; the
      Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. § 1401
      et seq.; the
      National Environmental Policy Act, 42 U.S.C. §4321 et seq.; the Noise
      Control Act, 42 U.S.C. § 4901 et seq., the
      Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; the
      Resource Conservation and Recovery Act (“RCRA”) 42
      U.S.C. § 6901 et seq., as
      amended by the Hazardous and Solid Waste amendments of 1984; the Safe
      Drinking Water Act, 42 U.S.C § 300f et seq.; the
      Comprehensive Environmental Response, Compensation and Liability Act
      (“CERCLA”), 42
      U.S.C. § 9601 et seq.; as
      amended by the Superfund Amendments and Reauthorization Act, and the
      Emergency Planning and Community Right-to-Know Act; the Toxic Substance
      Control Act (“TSCA”), 15
      U.S.C. § 2601 et seq.; and the
      Atomic Energy Act, 42 U.S.C. § 2011 et seq.; all as
      may be amended as of the date of the Contract, together with their
      implementing regulations and guidelines as of the date of this Contract.
      The term “Environmental
      Laws” shall also include all state, regional, county, municipal and
      other local laws, regulations, and ordinances that are equivalent or
      similar to the federal laws recited above or that purport to regulate
      Hazardous Materials. The term “Hazardous
      Materials” shall include, without limitation, any hazardous
      substance, pollutant, or contaminant regulated under CERCLA; oil and
      petroleum products and natural gas, natural gas liquids, liquefied natural
      gas, and synthetic gas usable for fuel; pesticides regulated under FIFRA;
      asbestos, polycholorinated byphenyls, and other substances regulated under
      TSCA; source material; special nuclear material, and byproduct materials
      regulated under the Atomic Energy Act; industrial process and pollution
      control wastes to the extent regulated under applicable Environmental
      Laws, and any and all substances and materials which may pose a threat of
      harm to human health or the environment or which may be regulated by any
      Environmental Laws;

            


    

     

    
      	
            	
              (U) 

            	
              The
      information and documents set forth in the exhibits to this Contract or
      delivered pursuant hereto are true, correct and complete in all material
      respects;

            


    

     

    
      	
            	
              (V) 

            	
              Except
      as set forth on the Rent Roll, no rental under any of the Leases has been
      collected more than one (1) month in advance, and, except as disclosed on
      the Rent Roll, there are no concessions, bonuses, free months’ rental,
      rebates, or other matters affecting the rental under any of the Leases. To
      the best of Sellers’ knowledge and except as disclosed in the Rent Roll,
      no tenant under any of the Leases is in monetary default
      thereunder;

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              (W) 

            	
              No
      leasing commissions are payable by the “landlord” or “lessor” under any
      Lease, except as set forth on the Rent
Roll;

            


    

     

    
      	
            	
              (X) 

            	
              The
      Tangible Personal Property is free and clear of any liens, charges and
      encumbrances benefiting persons or entities claiming by, through or under
      the Company, other than liens, charges and encumbrances to be canceled at
      or prior to Closing; and

            


    

     

    
      	
            	
              (Y) 

            	
              Neither
      Sellers or the Company (without reference to its constituent entities) are
      now nor shall they be at any time prior to or at the Closing an
      individual, corporation, partnership, joint venture, association, joint
      stock company, trust, trustee, estate, limited liability company,
      unincorporated organization, real estate investment trust, government or
      any agency or political subdivision thereof, or any other form of entity
      (collectively, a “Person”) named in any executive orders or lists
      published by the Office of Foreign Assets Control, Department of the
      Treasury (“OFAC”) as Persons with whom a United States Citizen (“U.S.
      Person”) may not transact business or must limit their interactions to
      types approved by OFAC (“Specially Designated Nationals and Blocked
      Persons”).

            


    

     

    Any
reference to Sellers’ “knowledge” or words of similar import shall be deemed to
mean, and shall be limited to, the actual (as distinguished from implied,
imputed or constructive) knowledge of Jack Hinrichs, Richard Denny and Dan
Faulk, without such persons having any obligation to make an independent inquiry
or investigation.

     

    5.           Survey and Inspection
Materials.

     

    Sellers
shall provide to Buyer on or before the Effective Date a copy of the most recent
plat of survey of the Property which Sellers have in their possession, custody
or control (such survey being referred to as the “Initial
Survey”).  Buyer shall pay the cost of any amendment or
updating of the Initial Survey (and any Initial Survey so updated being referred
to as the “Survey”).  On
or before the Effective Date, Sellers shall provide to the Buyer true, correct
and complete copies of the inspection materials in Sellers’ possession, custody
or control as set forth on Exhibit “E” attached
hereto and incorporated herein by reference (the “Inspection
Materials”)  In the event all of the Inspection Materials have
not been provided to Buyer within three (3) days of the Effective Date, then the
Inspection Period (as hereinafter defined) shall automatically be extended by
one day for each day beyond such deadline until all of the Inspection Materials
have been provided to Buyer.  Buyer shall deliver written notice to
Sellers indicating the extension of the Inspection Period as provided in this
Section 5.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    6.           Inspection Period and
Title.

     

    
      	
               
      

            	
              (A)

            	
              Inspection
      Period.  Buyer, its agents, contractors, consultants, and
      employees shall have from and after the Effective Date until 5:00 P.M.,
      Atlanta, Georgia time on that day which is thirty (30) days after the
      Effective Date (subject to the provisions of Section 5 hereof) (the “Inspection
      Period”) to (i) examine title to the Property, (ii) obtain an
      updated survey of the Property, (iii) inspect or otherwise cause the
      inspection of the Property and documents in Sellers’ possession which
      relate to the Property (including, without limitation, Sellers’ books and
      records pertaining to the Property); (iv) conduct such due diligence,
      including without limitation, non-destructive tests and studies on the
      Property, as Buyer shall deem advisable; and (v) to object to matters
      affecting title to or survey of the Property.  Sellers agree to
      cooperate with Buyer in connection with Buyer’s examination and inspection
      of the Property pursuant to this Section 6, and Sellers agrees to provide
      Buyer with full and free access to the Property in furtherance thereof,
      subject, however, to the rights of tenants under the Leases.  In
      the event Buyer fails to deliver to Sellers on or before the expiration of
      the Inspection Period a written notice stating that Buyer has completed
      its inspection of the Property and has determined to go forward with the
      purchase of the Membership Interests in accordance with the terms and
      conditions of this Contract (the “Election
      Notice”), this Contract shall automatically and without any further
      action on the part of Sellers and/or Buyer be deemed to have been
      terminated effective as of the expiration of the Inspection Period, and
      Sellers and Buyer shall thereafter have no further rights or obligations
      hereunder except those which explicitly survive termination of this
      Contract.  In the event Buyer delivers the Election Notice to
      Sellers on or before the expiration of the Inspection Period, Buyer shall
      have no further right to terminate this Contract under this Section
      6(A).  On or before the expiration of the Inspection Period,
      Buyer shall have the right to terminate this Contract for any reason or no
      reason, and upon such termination (whether by express election by Buyer or
      whether by automatic operation of this Section 6(A)), Sellers and Buyer
      shall thereafter have no further rights or obligations hereunder except
      those which explicitly survive termination of this
    Contract.

            


    

     

    Buyer
hereby agrees to indemnify and hold Sellers harmless from and against any and
all costs, liabilities, losses, judgments, fees and expenses (including, without
limitation, reasonable attorneys’ fees actually incurred) (collectively, “Costs”) suffered by
Sellers and arising out of Buyer’s, or its agents’, contractors’, consultants’
or employees’ entry on and inspection of the Property pursuant to this Section
6(A), excluding, however, Costs incurred by Sellers and caused by (i) Sellers’
negligence or intentional misconduct or (ii) the condition of the Property prior
to Buyer’s inspection thereof.

     

    
      	
               
      

            	
              (B)

            	
              Title.  During
      the Inspection Period, Buyer shall have the right, at its expense, to
      obtain a pro forma endorsement to the Company’s existing title insurance
      policy (the “Title Policy”) for the Property (the “Title
      Endorsement”) issued by Fidelity National Title Insurance Company
      (“Title Company”). Buyer shall have the right, on or before the expiration
      of the Inspection Period, to notify Sellers in writing of any objections
      Buyer may have to title to the Property as shown in the Title Policy,
      Title Endorsement or the Survey of the Property.  If Buyer fails
      to give any such objections on or prior to the expiration of the
      Inspection Period, all matters affecting title to and the Survey of the
      Property shall be deemed to be permitted title exceptions (hereinafter
      collectively referred to as the “Permitted
      Exceptions”).  If Buyer does give notice of objections on
      or prior to the expiration of the Inspection Period, then Sellers shall
      have five (5) days after the effective date of such objections (the “Sellers Election
      Deadline”) to elect to cure some, all or none of Buyer’s title and
      survey objections; provided, however, if either (i) such objection
      can be cured within ten (10) days and at a cost not to exceed $50,000.00,
      or (ii) such objection is to a monetary lien or encumbrance which can be
      cured by the payment of money, Sellers agree to cure same out of the
      proceeds of the purchase of the Membership Interests by Buyer at Closing
      (collectively, the “Removable
      Liens”).  Sellers’s failure on or before the Sellers
      Election Deadline to notify Buyer of which objections it elects to cure
      shall be deemed to be an election by Sellers to cure none of Buyer’s
      objections, subject to Sellers’ mandatory obligation to cure the Removable
      Liens. If Sellers elect to cure less than all of the title and survey
      objections (subject to Sellers’ mandatory obligation to cure the Removable
      Liens), it shall so notify Buyer on or before the Sellers Election
      Deadline, and Buyer shall have seven (7) business days after the Sellers
      Election Deadline to elect either (A) to terminate this Contract,
      whereupon all rights and obligations hereunder shall immediately terminate
      (other than those obligations expressly set forth in this Contract which
      specifically survive such termination), or (B) to close the purchase and
      sale contemplated hereby in which case all of Buyer’s uncured title and
      survey objections and, subject to the last sentence of this Section 6(B),
      any other title matters, shall be added to and be made a part of the
      Permitted Exceptions.  The immediately preceding sentence shall
      not relieve the Sellers of their obligation to cure the Removable
      Liens.  If Buyer does not so respond within seven (7) business
      days after the Sellers Election Deadline, then Buyer shall be deemed to
      have elected to terminate this Contract, and all rights and obligations
      hereunder shall immediately terminate (other than obligations expressly
      set forth in this Contract which specifically survive such
      termination).  As to title defects arising after the effective
      date of the Title Endorsement and survey defects arising after the date of
      the Survey, Buyer shall be entitled to object thereto within five (5)
      business days after becoming aware of such defect, but no later than the
      Closing Date, and Sellers shall have a reasonable time, not to exceed
      five (5) days, to elect the options set forth above upon the same
      conditions set forth above (unless such defect was caused by the act or
      failure to act of Sellers, in which event Sellers are obligated to cure
      same and the same shall be deemed to be a “Removable Lien”), and the
      Closing Date shall be extended to the extent necessary, not to exceed
      thirty (30) days, to provide said additional time
  period.

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    7.           Covenants of
Sellers.

     

    Between
the date hereof and the Closing Date, Sellers shall:

     

    
      	
               
      

            	
              (A)

            	
              Maintain
      (or cause the maintenance of) the Property in its current condition,
      ordinary wear and tear and casualty excepted, but, in any event, in a
      manner consistent with reasonable and prudent business practices,
      including, without limitation, maintaining the same levels of staffing and
      personnel at the Property as currently maintained on the
      Property;

            


    

     

    
      	
               
      

            	
              (B)

            	
              Maintain
      (or cause the maintenance of) all casualty, liability and hazard insurance
      currently in force with respect to the
Property;

            


    

     

    
      	
               
      

            	
              (C)

            	
              Not
      cause the Property, or any interest therein, to be alienated, encumbered
      (other than by mechanics’ or materialmen’s liens or claims which Sellers
      shall promptly pay or bond off so as to discharge the same from record
      prior to Closing) or otherwise
transferred;

            


    

     

    
      	
               
      

            	
              (D)

            	
              Continue
      to conduct business with respect to the Property in the same manner in
      which said business has been heretofore conducted (but in any event in
      accordance with good business
practices);

            


    

     

    
      	
               
      

            	
              (E)

            	
              Except
      as otherwise expressly provided in this Contract, shall not, without the
      prior consent of Buyer, allow the Company to enter into any contract,
      commitment or undertaking (other than New Leases, as hereinafter defined
      and separately addressed), make any change in or acceleration of the
      Company’s normal and customary billing practices, or make any change in
      the Company’s normal and customary advertising, promotional or maintenance
      practices, and Sellers shall not, without first obtaining Buyer’s prior
      written consent, allow the Company to enter into any other contract or
      Contract affecting the Property unless such contract or Contract is
      terminable without cause by the owner of the Property on not more than
      thirty (30) days’ notice and without the payment of any termination fee or
      penalty;

            


    

     

    
      	
               
      

            	
              (F)

            	
              Take,
      or cause to be taken, all actions necessary to cause each of the
      warranties and representations in this Contract to remain true and correct
      from the date hereof to the Closing Date and refrain from taking any
      action which would cause, or threaten to cause, any of such warranties and
      representations to become incorrect or untrue at any time during such
      period;

            


    

     

    
      	
               
      

            	
              (G)

            	
              Shall
      not, without Buyer’s prior written consent, allow the Company to enter
      into any (i) new lease for any part of the Property, (ii) amendment,
      modification, or renewal of an existing Lease, (iii) accept the surrender
      of premises under any Lease, (iv) consent to sublease, or (v) terminate
      any existing Lease or dispossess any tenant under an existing Lease (each
      of (i), (ii), (iii), (iv) and (v) being herein collectively referred to as
      a “New
      Lease”) which is a departure from the Company’s current leasing
      guidelines it has in place with its current Property management
      team;

            


    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (H)

            	
              Not
      remove any of the Tangible Personal Property except as may be required for
      necessary repair or replacement (provided that any replacement shall be of
      equal quality as existed at the time of removal) and, in the case of
      supplies, except for those items consumed in the ordinary course of
      business;

            


    

     

    
      	
               
      

            	
              (I)

            	
              Cause
      the Company to perform its obligations under the Leases and Contracts;
      and

            


    

     

    
      	
               
      

            	
              (J)

            	
              Unless
      this Contract is terminated pursuant to any termination provisions
      contained herein, not enter into any contracts for the sale of the
      Membership Interests to any other
party.

            


    

     

    8.           Sellers’ Obligations at
Closing.

     

    Unless
required to be delivered sooner pursuant to the terms of this Contract, at or
prior to the Closing, Sellers shall deliver to Buyer or Title Company, as the
case may be, the following documents (“Sellers’s Closing
Documents”), in form and substance reasonably satisfactory to
Buyer:

     

    
      	
               
      

            	
              (A)

            	
              Assignment Agreement
      and Bill of Sale.  Duly executed and acknowledged
      Assignment Agreement and Bill of Sale in the form attached hereto as Schedule 1, conveying to
      Buyer the Membership Interests;

            


    

     

    
      	
               
      

            	
              (B)

            	
              Non-Foreign and
      Residency Affidavits.  A sworn affidavit from an
      authorized officer of each Seller to the effect that each Seller is not a
      “foreign person” as that term is defined in Section 1445(f)(3) of the
      Internal Revenue Code of 1986, as amended (the “Code”) in the
      form attached hereto as Schedule
    2;

            


    

     

    
      	
               
      

            	
              (C)

            	
              Transfer Tax and
      Withholding Tax Declarations.  All such tax, transfer and
      other declarations and returns, and withholding affidavits and information
      returns, duly executed and sworn to by Sellers, as may be required of
      Sellers by law in connection with the conveyance of the Membership
      Interests to Buyer, including, without limitation, a Realty Transfer Tax
      Declaration of Acquisition;

            


    

     

    
      	
               
      

            	
              (D)

            	
              Contracts.  Original
      executed counterparts of all of the
Contracts;

            


    

     

    
      	
               
      

            	
              (E)

            	
              Leases.  Original
      executed counterparts of all of the
Leases;

            


    

     

    
      	
               
      

            	
              (F)

            	
              Deposits.  All
      Security Deposits (including, without limitation, security, pet, and other
      deposits) held by the Company shall be paid over to Buyer, together with
      any and all interest accrued
thereon;

            


    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (G)

            	
              1099 Reporting
      Affidavit.  Sellers shall deliver any affidavit necessary
      to complete the 1099 Filing required under the Internal Revenue
      Code;

            


    

     

    
      	
               
      

            	
              (H)

            	
              Closing
      Statement.  A statement setting forth the Purchase Price
      with all adjustments shown and including a proration
      statement;

            


    

     

    
      	
               
      

            	
              (I)

            	
              Sellers’
      Certificate.  A duly executed and acknowledged
      certificate in a form attached hereto as Schedule 3 executed by
      an authorized representative of each Seller indicating that all of
      Sellers’ representations and warranties made in this Contract are true and
      correct as of the Closing Date as if then
made;

            


    

     

    
      	
               
      

            	
              (J)

            	
              Authority and Owner’s
      Affidavit.  If required by the Title Company in
      connection with the issuance of the Title Endorsement, an owner’s
      affidavit substantially in the form attached hereto as Schedule 4, evidencing
      Sellers’ authority acceptable to the Title Company to enter into the
      transaction contemplated by this Contract, and an “owner’s affidavit” and
      a “broker’s lien affidavit” in form and substance acceptable to Title
      Company and sufficient for the Title Company to delete any standard title
      and survey exceptions from the Title Endorsement, including, without
      limitation, those exceptions for (w) mechanics’ or materialmen’s liens,
      (x) broker’s liens arising from brokers engaged by Sellers, (y) parties in
      possession, other than tenants as tenants only under unrecorded leases as
      set forth on the Revised Rent Roll (hereinafter defined), and
      (z) matters not shown in the public
  records;

            


    

     

    
      	
               
      

            	
              (K)

            	
              Property
      Files.  Sellers’ or the Company’s Property files, if
      any;

            


    

     

    
      	
               
      

            	
              (L)

            	
              Revised Rent
      Roll.  A certified rent roll for the Property current as
      of the business day immediately prior to the Closing Date and stating the
      amount of all of the Security Deposits held by the Company under each
      Lease (the “Revised Rent
      Roll”), with such Certification being in the form attached hereto
      as Schedule
      5;

            


    

     

    
      	
               
      

            	
              (M)

            	
              Keys.  All
      keys to the Property, labeled for
  identification;

            


    

     

    
      	
               
      

            	
              (N)

            	
              Property Management
      Agreement.  A copy of the document or agreement
      terminating the Company’s current management agreement for the Property;
      and

            


    

     

    
      	
               
      

            	
              (N)

            	
              Such
      other documents as may be reasonably requested by Buyer or Title Company
      to effect the Closing of the transactions contemplated by this
      Contract.

            


    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    9.           Buyer’s Obligations at
Closing.

     

    At or
prior to the Closing, Buyer shall deliver to Sellers or Title Company, as the
case may be, the following items (“Buyer’s Closing
Items”), in form and substance reasonably satisfactory to
Sellers:

     

    
      	
               
      

            	
              (A)

            	
              Subject
      to the adjustments provided for in this Contract, the balance of the
      Purchase Price;

            


    

     

    
      	
               
      

            	
              (B)

            	
              Assignment Agreement
      and Bill of Sale.  An executed counterpart of the
      Assignment Agreement and Bill of Sale specified in Section 8(A)
      above;

            


    

     

    
      	
               
      

            	
              (C)

            	
              Closing
      Statement.  An executed counterpart of the Closing
      Statement specified in Section 8(H) above;
and

            


    

     

    
      	
               
      

            	
              (D)

            	
              Such
      other documents as may be reasonably requested by Sellers or Title Company
      to effect the Closing of the transactions contemplated by this
      Contract.

            


    

     

    10.           Additional
Documents.

     

    All
parties agree that they will execute and deliver to each other such additional
documents, certificates and other matters as may be reasonably requested by any
one party or its attorney, whether before or subsequent to the Closing, in order
to effectuate the transactions contemplated by this Contract and to carry out
the parties’ intent as expressed in this Contract, provided that such additional
documents, certificates and other matters shall be provided without material
expense to the party so providing such items.

     

    11.           Prorations and
Adjustments.

     

    Prorations.  All
prorations between the Sellers and Buyer will be effected in accordance with the
provisions of this Section 11.  If the proration of an item
subject to proration is not specifically provided for herein, it is the
intention of Sellers and Buyer that such item be prorated on the Closing Date on
the basis of the number of days the Company was owned by Sellers during the
applicable period relative to the number of days the Property was owned by Buyer
during the applicable period. Sellers shall be entitled to all income and
responsible for all expenses for the period up to but not including the Closing
Date, and Buyer shall be entitled to all income and responsible for all expenses
for the period of time from, after and including the Closing
Date.  Such adjustments shall be shown on the closing statement (with
such supporting documentation as the parties hereto may require being attached
as exhibits to the closing statement) and shall increase or decrease (as the
case may be) the Purchase Price.  If accurate allocations cannot be
made at Closing because current bills are not obtainable (as, for example, in
the case of utility bills), Sellers and Buyer shall allocate such income or
expenses at Closing on the best available information, subject to adjustment
upon receipt of the final bill or other evidence of the applicable income or
expense.  This covenant shall survive Closing.  Any income
received or expense incurred by Sellers or Buyer with respect to the Property
after the Closing Date shall be promptly allocated in the manner described
herein and Sellers and/or Buyer shall promptly pay or reimburse any amount
due.  This covenant also shall survive Closing.

     

    
      	
               
      

            	
              (A)

            	
              Real and Personal
      Property Taxes.  Real estate and personal property taxes
      and special assessments (“Taxes”) on the
      Property which are paid by the Company shall be prorated as of the Closing
      Date.  If any Taxes for the calendar year in which the Closing
      occurs have not been determined on the Closing Date, the proration of
      Taxes shall be based upon the Taxes assessed against the Property for the
      calendar year immediately preceding the calendar year in which the Closing
      occurs, subject to any notice of reassessment which may have been received
      prior to Closing.  After the actual amount of Taxes for the year
      of the Closing is known, and is different than the amount of Taxes used
      for prorations performed at Closing, Sellers and Buyer
      shall recalculate the
      prorated amount of the Taxes payable by each party.  If the
      actual prorated amount of such Taxes payable by either party is greater
      than $2500 lower or higher than the prorated amount allocated to such
      party pursuant to the prorations used at Closing, then Buyer shall
      pay to Sellers or Sellers shall pay to Buyer, as applicable, the
      difference between the actual prorated amount of Taxes and the prorated
      amount of Taxes allocated at Closing, so that Sellers shall pay only the
      actual amount of Taxes attributable to the period occurring prior to the
      Closing Date and Buyer shall pay only the actual Taxes attributable to the
      period occurring on and subsequent to the Closing Date.  Any
      taxes, charges, assessments and personal property taxes after the Closing
      Date which are attributable to periods prior to the Closing Date shall be
      paid by Sellers and any refunds or rebates which are attributable to the
      period prior to the Closing Date shall be paid to
  Sellers.

            


    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (B)

            	
              Utilities.  Amounts
      due for all electric, gas, sewer, water, telephone and other utilities,
      and for all service contracts for maintenance, trash collection, and the
      like for the period on and prior to the Closing Date and which are paid by
      Sellers shall be prorated as of the Closing Date.  Sellers shall
      endeavor to obtain meter readings on the day before the Closing Date, and
      if such readings are obtained, there shall be no proration of such
      items.  Otherwise, the Sellers’ pro-rata share of these expenses
      will be paid to Buyer within ten (10) days after receiving notice of the
      amounts due. Sellers and Buyer shall cooperate in taking whatever action
      is necessary to insure that any and all prepaid deposits or rents on all
      public and private utilities or services which serve the Property are
      refunded to Sellers by the utility company; if such refunds are not made
      prior to Closing, the applicable deposits or rents shall be assigned to
      Buyer (to the extent assignable) at Closing and Sellers shall receive a
      credit to the Purchase Price for the amount thereof.  The
      amounts prorated herein shall be adjusted, if necessary, upon receipt of
      final bills for the period in which the Closing
  occurs.

            


    

     

    
      	
               
      

            	
              (C)

            	
              Contracts.  All
      amounts due or payable under the Contracts shall be prorated as of the
      Closing Date.

            


    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (D)

            	
              Rents.  All
      base rent under the Leases and any other charges under the Leases (all
      such other charges other than base rent are herein referred to as “Additional
      Rent”) shall be prorated as of the Closing Date as if collected for
      the month of Closing.  Sellers shall pay to Buyer at Closing (in
      the form of a credit against the Purchase Price) the amount of any rent or
      other income collected by the Company before Closing but which is
      applicable to any period of time from or after Closing.  Rentals
      are “delinquent” when payment thereof is due prior to the Closing Date but
      payment has not been made by the Closing Date.  Buyer hereby
      grants to Sellers the right to collect such delinquent rentals, at
      Sellers’s sole cost and expense, provided that Sellers shall have no right
      to cause the eviction of, and Buyer shall have no obligation to evict, any
      tenants owing delinquent rentals.  Sellers shall not be entitled
      to any of the rentals received by Buyer on and after the Closing Date from
      tenants owing delinquent rentals unless such tenants shall be current in
      their rental obligations for periods occurring from and after the Closing
      Date.  In that case, Buyer shall deliver to Sellers any rentals,
      net of the costs of collection, received by Buyer which are designated by
      the tenant as payment for or are attributable to delinquent rentals for
      rental periods occurring prior to the Closing Date.  If,
      however, delinquent rentals are not collected from the tenants owing such
      delinquent rentals, Buyer shall not be liable to Sellers for such
      delinquent rentals.  Buyer shall not have any obligation to
      collect any delinquent rentals.  It shall be presumed between
      Buyer and Sellers that all rentals received after the Closing Date shall
      first be applied to rentals attributable to the period beginning on the
      Closing Date and thereafter, and subsequently, to the period prior to the
      Closing Date.  To the extent that the Leases provide for the
      adjustment of previously paid estimated amounts of Additional Rent for the
      period prior to Closing on a date subsequent to the Closing Date, Sellers
      shall be entitled to receive, or shall be responsible to pay, as the case
      may be, its pro-rata share of any such adjusted amounts which are
      applicable to periods ending on the Closing Date.  Such payment
      or refund shall be made within fifteen (15) days after Buyer’s
      determination of such amounts and written notice to Sellers concerning
      such amounts. Buyer shall be solely responsible for the collection of such
      adjustments, but shall not be liable to Sellers for its failure to do
      so.

            


    

     

    
      	
               
      

            	
              (E)

            	
              Leasing
      Commissions.  Sellers shall be responsible for “cashing
      out” any leasing commissions due under the Leases at or prior to
      Closing.

            


    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              
                (F)

              

            	
              
                Net
      Working Capital. At least three (3) business days prior to
      the Closing Date, Sellers shall deliver to Buyer a certificate (the
      “Estimated NWC Certificate”), including a consolidated balance sheet of
      the Company as of the Closing Date, prepared in accordance with the
      accounting principles, methods, practices, estimates, judgments and
      assumptions applied in the preparation of the Company’s financial
      statements, consistently applied (the “Accounting Principles”), which
      shall include (a) the Sellers’ good faith estimate (such estimate is
      referred to as the “Estimated Net Working Capital Amount”) of the “Net
      Working Capital Amount.” As used herein, “Net Working Capital Amount”
      means the Net Working Capital of the Company as of 11:59 p.m. EST on the
      day immediately preceding the Closing Date. “Net Working Capital” means
      the result of (i) all cash of the Company minus
      (ii) all current liabilities (excluding the Existing Indebtedness) of
      the Company, in each case determined in accordance with the Accounting
      Principles. The Purchase Price at Closing shall be increased by the
      Estimated Net Working Capital
Amount.

              

            


    

    
    

     

    
      	
               
      

            	
              No later than ninety (90) days following the
      Closing Date, Buyer shall prepare and deliver to Sellers (i) a
      consolidated balance sheet of the Company dated at the Closing Date, which
      shall be prepared in accordance with the Accounting Principles and
      (ii) a reasonably detailed statement (the “Final NWC Certificate”)
      setting forth Buyer’s calculations of the Net Working Capital Amount. If
      Sellers have any objections to the Final NWC Certificate, Sellers shall
      deliver to Buyer a statement setting forth its objections thereto (an
      “Objections
      Statement”), provided that the only
      bases for objections shall be (i) non-compliance with the standards set
      forth above for preparation of the Final NWC Certificate, or as set forth
      in the definition of Net Working Capital, and (ii) mathematical
      errors.  If an Objections Statement is not delivered to Buyer
      within thirty (30) days after delivery of the Final NWC Certificate, the
      Final NWC Certificate shall be final, binding and non-appealable by the
      parties hereto. Sellers and Buyer shall negotiate in good faith to resolve
      any objections set forth in the Objections Statement (and all such
      discussions related thereto shall, unless otherwise agreed by Buyer and
      Sellers, be governed by Rule 408 of the Federal Rules of Evidence (and any
      applicable similar state rule)), but if they do not reach a final
      resolution within thirty (30) days after the delivery of the Objections
      Statement, Sellers and Buyer  may submit such dispute to one of
      the “Big Four” accounting firms other than Ernst & Young LLP or
      PricewaterhouseCoopers LLP, or, in the event that any such auditor is
      unable to accept such appointment, to any other nationally recognized
      independent accounting firm mutually acceptable to Buyer and Sellers (the
      “Independent
      Auditor”).  Each party shall be afforded an opportunity
      to present to the Independent Auditor material relating to the disputed
      issues and to discuss the determination with the Independent Auditor. The
      Independent Auditor shall act as an auditor and not as an arbitrator and
      shall resolve matters in dispute and adjust and establish any disputed
      adjustment of the Net Working Capital Amount to reflect such resolution,
      provided that the
      Independent Auditor shall not assign a value to any item or amount in
      dispute greater than the greatest value for such item or amount assigned
      by Sellers, on the one hand, or Buyer, on the other hand, or less than the
      smallest value for such item or amount assigned by Sellers, on the one
      hand, or Buyer, on the other hand.  It is the intent of Buyer
      and Sellers that the process set forth in this Section 11(F) and the
      activities of the Independent Auditor in connection herewith are not
      intended to be and, in fact, are not arbitration and that no formal
      arbitration rules shall be followed (including rules with respect to
      procedures and discovery).  Sellers and Buyer shall use their
      commercially reasonable efforts to cause the Independent Auditor to
      resolve all such disagreements as promptly as practicable.  The
      resolution of the dispute by the Independent Auditor shall be final,
      binding and non-appealable on the parties hereto.  The Final NWC
      Certificate shall be modified if necessary to reflect such
      determination.  The fees and expenses of the Independent Auditor
      shall be allocated for payment by Buyer, on the one hand, and/or Sellers,
      on the other hand, based upon the percentage which the portion of the
      contested amount not awarded to each party bears to the amount actually
      contested by such party, as determined by the Independent
      Auditor.

            


    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              If
      the Net Working Capital Amount as finally determined pursuant to the
      dispute resolution procedures described above is greater than the
      Estimated Net Working Capital Amount shown on the Estimated NWC
      Certificate, then Buyer shall pay to Sellers cash equal to the amount by
      which the Net Working Capital Amount exceeds the Estimated Net Working
      Capital Amount. If the Net Working Capital Amount as finally determined
      pursuant to the dispute resolution procedures described above is less than
      the Estimated Net Working Capital Amount shown on the Estimated NWC
      Certificate, then Sellers shall pay to Buyer cash equal to the amount by
      which the Estimated Net Working Capital Amount exceeds the Net Working
      Capital Amount.

            


    

     

    
      	
               
      

            	
              (G)

            	
              Lender
      Escrows.  Sellers shall obtain at Closing from Lender the
      outstanding balance of any escrow or reserve accounts maintained by Lender
      under the Existing Indebtedness (the “Escrow Funds”), and such amount of
      Escrow Funds shall be credited against the Purchase
  Price.

            


    

     

    
      	
               
      

            	
              (H)

            	
              Other
      Expenses.  Except as otherwise provided in
      Section 13, each party shall be responsible for all fees, costs and
      expenses incurred by it in connection with this transaction, including
      expenses for appraisal, legal and accounting
  services.

            


    

     

    
      	
               
      

            	
              (I)

            	
              Survival.  The
      obligations and provisions set forth in this Section 11 shall survive
      Closing.

            


    

     

    12.           Conditions to
Closing.

     

    The
obligation of Buyer to consummate the transaction contemplated hereby is
conditioned upon full satisfaction by Sellers or written waiver by Buyer of the
following conditions precedent as of the Closing Date:

     

    
      	
               
      

            	
              (A)

            	
              All
      representations and warranties of Sellers made herein remain materially
      true and correct;

            


    

     

    
      	
               
      

            	
              (B)

            	
              Sellers
      shall have performed all of the obligations and covenants undertaken by
      Sellers in this Contract to be performed by Sellers at or prior to the
      Closing;

            


    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (C)

            	
              Sellers
      shall have delivered to Buyer or Title Company all of the documents
      enumerated in Section 8 hereof;

            


    

     

    
      	
               
      

            	
              (D)

            	
              The
      Improvements (including, but not limited to, the mechanical systems,
      plumbing, electrical, wiring, appliances, fixtures, heating, air
      conditioning and ventilating equipment, elevators, boilers, equipment,
      roofs, structural members and furnaces) shall be at Closing in
      substantially the same condition as on the Effective Date of this Contract
      except for normal wear and tear and such damage from casualty or
      condemnation that is waived or accepted under Section 14
      hereof;

            


    

     

    
      	
               
      

            	
              (E)

            	
              The
      Property shall have no encumbrances other than the Permitted
      Exceptions;

            


    

     

    
      	
               
      

            	
              (G)

            	
              All
      apartment units located on the Property which have been vacated more than
      five (5) business days prior to Closing shall be in “rent-ready” (as
      defined below) condition. If all such vacant apartment units are not in a
      rent-ready condition at Closing, Buyer shall receive a credit against the
      Purchase Price of $500.00 for each such unit vacant and non rent-ready;
      provided, however, that if any of such vacant apartment units that are not
      in a rent-ready condition require replacement of carpet, then the $500.00
      rent-ready credit shall increase to $1500.00 for each such unit vacant and
      non rent-ready.  A “rent-ready” unit shall mean a unit that is
      freshly painted, carpeting that is cleaned or replaced, as necessary, and
      working appliances and fixtures.

            


    

    


    
      	
               
      

            	
               (H)

            	
              There
      shall exist no actions, suits, arbitrations, claims, attachments or
      proceedings against the Property filed by third parties, and there shall
      exist no actions, suits, arbitrations, claims, attachments or proceedings,
      assignments for the benefit of creditors, insolvency, bankruptcy or
      reorganization pending against Sellers by third parties (or filed by
      Sellers) that would seek to enjoin the consummation of this Contract or
      that would materially and adversely affect the Sellers’ ability to perform
      its obligations under this
Contract.

            


    

     

    If the
conditions set forth in this Section 12 are not satisfied at or prior to
Closing, Buyer may elect either to terminate this Contract in writing at or
prior to Closing (in which event the parties hereto shall have no further rights
or obligations to one another except those which explicitly survive
termination), to pursue its remedies as set forth in Section 15 if the failure
of a condition shall have occurred on account of a default by Sellers under this
Contract, or to waive the unsatisfied condition and close escrow without a
reduction in the Purchase Price.  The failure of the Buyer to elect
any of the foregoing options at or prior to Closing shall constitute an election
by Buyer to terminate this Contract as aforesaid.

     

    13.           Closing and Other
Costs.

     

    Sellers
shall pay one-half of any transfer, documentary stamp tax or recordation taxes
owed on account of the sale of the Membership Interests to Buyer, one-half of
any escrow closing fees charged by Title Company, recording costs incurred to
cure the Removable Liens, and any prepayment penalties or other fees charged by
Lender upon repayment of any loan secured by the Property upon consummation of
the sale of the Property to Buyer.  Buyer shall pay one-half of any
transfer, documentary stamp tax or recordation taxes owed on account of the sale
of the Membership Interests to Buyer, all premiums necessary to cause the
issuance of the Title Endorsement by the Title Company, the costs of the title
search and updated Survey, one half of any escrow closing fees charged by Title
Company, and the expenses of its own due diligence. Except as otherwise provided
herein, each party shall pay its own attorneys’ fees.  All other
expenses incurred by Sellers with respect to this Contract and the Closing shall
be paid by Sellers.  All other expenses incurred by Buyer with respect
to this Contract and Closing shall be paid by Buyer.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    14.           Fire, Casualty and
Condemnation.

     

    The risk
of loss, damage or destruction to the Property by fire or other casualty until
the Closing is retained by Sellers, but without any obligation or liability by
Sellers to repair or restore the Property.

     

    If at any
time prior to Closing, any portion of the Property is destroyed or damaged as a
result of (a) fire or any other casualty (hereinafter collectively referred to
as “Casualty”),
or (b) a taking in eminent domain or conveyance in lieu thereof (hereinafter
referred to as “Taking”), Sellers
shall promptly give written notice thereof (hereinafter referred to as the
“Damage
Notice”) to Buyer, including a statement by Sellers of its estimate
(hereinafter referred to as the “Estimate”) of the
cost of fully repairing and restoring the Property (to the extent practicable)
to the condition which existed prior to the Casualty or Taking, as the case may
be, as well as the timetable for completing such repairs and
restoration.

     

    If there
shall be any damage to, or destruction of, the Property as a result of a
Casualty or Taking prior to the Closing and such damage, according to the
Estimate, shall cost in excess of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) to repair or shall take longer than three (3) months to repair and
restore fully, or, in the case of a Taking, which would cause the Property (y)
no longer to comply with zoning requirements or the Leases, (z) no longer to
have access to a publicly-dedicated and maintained right-of-way for vehicular
and pedestrian access, Buyer shall have the right to terminate this Contract by
providing written notice to the Sellers within fifteen (10) business days after
Buyer’s receipt of the Damage Notice from Sellers.  Upon such
termination, all claims and obligations of the Parties, except as otherwise
expressly provided herein, shall be immediately released and
discharged.  If Buyer does not elect to terminate this Contract in
accordance with the foregoing terms of this Section 14, there shall be no
abatement in the Purchase Price (except, however, Buyer shall receive at Closing
a credit equal to Sellers’s deductible and the cost of repair of any uninsured
damage), and in lieu of any such abatement, Sellers shall execute, acknowledge
and deliver to Buyer at the Closing, in counterparts, an assignment, expressly
made without representation or warranty by Sellers and without recourse to
Sellers, of Sellers’s interest in any net insurance or condemnation proceeds
(that is, after expense of collection) which may be payable to Sellers as a
result of such Casualty or Taking, subject, however, to Sellers’s right to
receive reimbursement therefrom of any amounts paid or incurred by Sellers for
or on account of repairs and/or restoration to the Property prior to the Closing
on account of such Casualty or Taking, as the case may be, and which had been
previously approved by Buyer.  Sellers agree to cooperate with Buyer
in the obtaining by Buyer of casualty or condemnation proceeds.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    15.           Remedies.

     

    
      	
               
      

            	
              (A)

            	
              If
      Sellers default in their obligation to sell and convey the Membership
      Interests to Buyer pursuant to this Contract, Buyer’s sole and exclusive
      remedy shall be to elect one of the following:  (a) to terminate
      this Contract (in which event the parties hereto shall have no further
      rights or obligations to one another except those which explicitly survive
      termination), or (b) to bring a suit for specific
      performance.  Notwithstanding the foregoing, if Sellers
      willfully default in their obligation to sell and convey the Membership
      Interests to Buyer pursuant to this Contract and the remedy of specific
      performance as provided in clause (b) above is not available to Buyer
      because Sellers have sold or conveyed the Membership Interests to another
      party, or the Company has sold or conveyed the Property to
      another party, then Buyer’s sole remedy shall be to proceed pursuant to
      clause (a) above and Buyer may recover from Sellers the actual
      out-of-pocket expenses incurred by Buyer in connection with the
      transaction described in this Contract, including, without limitation,
      expenses paid (A) to Buyer’s attorneys in connection with the negotiation
      of this Contract and matters related thereto, (B) to any prospective
      lender as an application or commitment fee, (C) to CB Richard Ellis and
      Cushman & Wakefield for the Appraisals, and (D) to unrelated and
      unaffiliated third party consultants in connection with the performance of
      examinations, inspections and/or investigations pursuant to this
      Contract.  If specific performance is not available as described
      in the immediately preceding sentence, Sellers shall pay to Buyer all
      actual expenses, including reasonable attorneys’ fees actually incurred,
      incurred by Buyer in such specific performance action, and such expenses
      shall not be included as an expense of Buyer in determining Sellers’
      liability to Buyer in the event specific performance is not an available
      remedy as set forth in this Section
15(A).

            


    

     

    
      	
               
      

            	
              (B)

            	
              If
      Buyer defaults in its obligation to acquire the Membership
      Interests from Sellers pursuant to this Contract, Sellers’ sole and
      exclusive remedy shall be to elect one of the following:  (a) to
      terminate this Contract (in which event the parties hereto shall have no
      further rights or obligations to one another except those which explicitly
      survive termination), or (b) to bring a suit for specific
      performance.  Notwithstanding the foregoing, if Buyer willfully
      defaults in its obligation to acquire the Membership Interests from
      Sellers pursuant to this Contract and the remedy of specific performance
      as provided in clause (b) above is not available to Sellers, then Sellers’
      sole remedy shall be to proceed pursuant to clause (a) above and Sellers
      may recover from Buyer the actual out-of-pocket expenses incurred by
      Sellers in connection with the transaction described in this Contract,
      including, without limitation, expenses paid to Sellers’ attorneys in
      connection with the negotiation of this Contract and matters related
      thereto. If specific performance is not available as described in the
      immediately preceding sentence, Buyer shall pay to Sellers all actual
      expenses, including reasonable attorneys’ fees actually incurred, incurred
      by Sellers in such specific performance action, and such expenses shall
      not be included as an expense of Sellers in determining Buyer’s liability
      to Sellers in the event specific performance is not an available remedy as
      set forth in this Section 15(B).

            


    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
               (C)

            	
              In
      the event either Buyer or Sellers retains the services of an attorney for
      the purpose of enforcing the obligations of the other party to this
      contract, the prevailing party shall be entitled to recover from the other
      its reasonable attorneys’ fees and court costs actually
      incurred.

            


    

     

    16.           Brokers.

     

    
      	
               
      

            	
              (A)

            	
              Sellers
      warrant to Buyer that Sellers have not dealt with any broker, salesperson
      or finder with respect to this Contract or the transactions contemplated
      herein. Sellers shall indemnify, protect, defend and hold Buyer harmless
      from and against all claims, losses, costs, expenses and damages
      (including reasonable attorneys’ fees and costs actually incurred)
      resulting from a breach of the foregoing
  warranty.

            


    

     

    
      	
               
      

            	
              (B)

            	
              Buyer
      warrants to Sellers that Buyer has not dealt with any broker, salesperson
      or finder with respect to this Contract or the transactions contemplated
      herein.  Buyer shall indemnify, protect, defend and hold Sellers
      harmless from and against all claims, losses, costs, expenses and damages
      (including reasonable attorneys’ fees and costs actually incurred)
      resulting from a breach of the foregoing
  warranty.

            


    

     

    
      	
               
      

            	
              (C)

            	
              Notwithstanding
      any provision of this Contract to the contrary, the obligations of the
      parties under this Section 16 shall survive the Closing or any termination
      of this Contract.

            


    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    17.           Miscellaneous.

     

    
      	
               
      

            	
              (A)

            	
              Modifications:
      Waiver.  Except with respect to an express, unilateral
      right of termination contained in another provision of this Contract, no
      waiver, modification, amendment, discharge, termination or change of this
      Contract shall be valid unless the same is in writing and signed by the
      party against whom the enforcement of such waiver, modification,
      amendment, discharge, termination or change is
  sought.

            


    

     

    
      	
               
      

            	
              (B)

            	
              Entire
      Contract.  This Contract constitutes the entire
      understanding between the parties with respect to the transactions
      contemplated herein, and all prior or contemporaneous oral Contracts,
      understandings, representations and statements, and all prior written
      Contracts, understandings, representations, statements, letters of intent
      and summaries of terms are merged into this
  Contract.

            


    

     

    
      	
               
      

            	
              (C)

            	
              Notices.  Any
      notice, demand or request which may be permitted, required or desired to
      be given in connection herewith shall be given in writing and directed to
      Sellers and Buyer as follows:

            


    

     

    If intended for
Sellers:

     

    Oxford
Rise JV, LLC

    c/o
Oxford Properties

    One
Overton Park

    3625
Cumberland Boulevard, Suite 500

    Atlanta,
Georgia 30339

    Attention:  Daniel
Faulk

    Facsimile:
770-818-4051

     

    and with a copy
to:

     

    Steven L.
Kennedy, Esq.

    Seyfarth
Shaw LLP

    1075
Peachtree Street, NE

    Suite
2500

    Atlanta,
GA 30309-3962

    Facsimile:
404-892-7056

    


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    If intended for
Buyer:

     

    Preferred
Apartment Communities, Inc.

    One
Overton Park

    3625
Cumberland Boulevard, Suite 430

    Atlanta,
Georgia 30339

    Attention:  John
A. Isakson

    Facsimile:  678-589-7771

     

    and with a copy
to:

     

    Leonard
A. Silverstein, Esq.

    Executive
Vice President, General Counsel and Secretary

    Preferred
Apartment Communities, Inc.

    One
Overton Park

    3625
Cumberland Boulevard

    Suite
400

    Atlanta,
GA  30339

    Facsimile:  770-818-4105

     

    or at
such other address or to such other party which any party entitled to receive
notice hereunder designates to the other in writing from time to time in
accordance with this Section 17(C).  Notices shall be sent by
certified or U.S. Express Mail, on a return receipt requested basis, or
overnight courier, or hand delivery, or PDF via electronic transmission, or
telecopy (with receipt confirmed by the sender’s fax machine), and shall be
deemed delivered on the earlier to occur of:  (i) actual receipt; (ii)
three (3) business days after mailing for notices sent by mail; (iii) one (1)
business day after shipping for notices sent by U.S. Express Mail or overnight
courier; or (iv) confirmation of telecopy transmission by sender’s fax machine
(provided such confirmation indicates successful transmission or all pages prior
to 5:00 P.M., local time of recipient’s fax machine [as indicated by the
addresses for the Buyer and Sellers listed in this Section 17(C)] on a business
day, or if after such time or on a day other than a business day, such notice
shall be effective as of the next business day).  If delivery is
refused or delayed by the addressee, notices shall be deemed delivered on the
date of refusal, in the case of refused delivery, or on the date specified in
(i), (ii), (iii) or (iv) above, in the case of delay by the
addressee.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (D)

            	
              Governing
      Law.  The validity, meaning and effect of this Contract
      shall be determined in accordance with and governed by the laws of the
      State of Georgia.

            


    

     

    
      	
               
      

            	
              (E)

            	
              Counterparts.  This
      Contract may be executed in two or more counterparts, and so long as each
      party has signed at least one counterpart, each counterpart shall be
      deemed an original, but all of which together shall constitute one and the
      same instrument.

            


    

     

    
      	
               
      

            	
              (F)

            	
              Interpretation.  This
      Contract shall not be construed more strictly against one party than
      against the other merely by virtue of the fact that it may have been
      prepared by counsel for one of the parties, it being recognized that both
      Sellers and Buyer have contributed substantially and materially to the
      preparation of this Contract.  The captions in this Contract are
      inserted for convenience and reference only and shall in no way affect,
      define, describe or limit the scope or intent of this Contract or any of
      the provisions hereof.

            


    

     

    
      	
               
      

            	
              (G)

            	
              Assignability.  Prior
      to Closing, Buyer shall have the right, upon written notice to Sellers, to
      assign or transfer all of Buyer’s rights, obligations and interests under
      this Contract to one or more entities, provided that any such entities, or
      entity is/are directly or indirectly controlled by
  Buyer.

            


    

     

    
      	
               
      

            	
              (H)

            	
              Binding
      Effect.  This Contract shall be binding upon and inure to
      the benefit of the parties hereto and their respective legal
      representatives, successors and permitted assigns, and each reference
      herein to “Sellers” or “Buyer” shall be deemed to include their respective
      legal representatives, successors, and permitted
  assigns.

            


    

     

    
      	
               
      

            	
              (I)

            	
              Time of
      Essence.  Sellers and Buyer agree that time shall be of
      the essence of this Contract.

            


    

     

    
      	
               
      

            	
              (J)

            	
              Invalid
      Provisions.  In the event any term or provision of this
      Contract shall be held illegal, unenforceable or inoperative as a matter
      of law, the remaining terms and provisions of this Contract shall not be
      affected thereby, but each such remaining term and provision shall be
      valid and shall remain in full force and effect, unless the intent of the
      parties hereunder cannot reasonably be accomplished under the resulting
      Contract.

            


    

     

    
      	
               
      

            	
              (K)

            	
              Business
      Days.  If any date herein set forth for the performance
      of any obligations by Sellers or Buyer or for the delivery of any
      instrument or notice as herein provided should be on a Saturday, Sunday or
      legal holiday, the compliance with such obligations or delivery shall be
      deemed acceptable on the next day which is not a Saturday, Sunday or legal
      holiday.  As used herein, the term “legal holiday” means any
      state or federal holiday for which financial institutions or post offices
      are generally closed in the State in which the Property is
      located.  As used herein, the term “business day” shall refer to
      all days which are not Saturdays, Sundays, or legal
    holidays.

            


    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (L)

            	
              Effective
      Date.  The “Effective Date” of this Contract shall be the
      last date on which each of the Sellers and Buyer has signed the Contract
      as indicated by the dates appearing after Sellers’s and Buyer’s
      signatures.

            


    

     

    18.           Confidentiality.

     

    Buyer and
Sellers, for the benefit of each other, hereby agree that between the Effective
Date and the Closing Date, they will not release or cause or permit to be
released any press notices, publicity (oral or written) or advertising promotion
relating to, or otherwise announce or disclose or cause or permit to be
announced or disclosed, in any manner whatsoever, the terms, conditions or
substance of this Contract or the transactions contemplated herein, without
first obtaining the written consent of the other party hereto.  It is
understood that the foregoing shall not preclude either party from discussing
the substance or any relevant details of the transactions contemplated in this
Contract, subject to the terms of this Section 18, with any of its attorneys,
accountants, potential investors, professional consultants or potential lenders,
as the case may be, or prevent either party hereto from complying with any laws
applicable to such party, including, without limitation, governmental
regulatory, disclosure, tax and reporting requirements.

     

    19.           Audited Financial
Statements.

     

    Sellers
hereby agrees to reasonably cooperate (at no third party cost to Sellers) with
Buyer during the term of this Contract in the preparation by Buyer and its
advisors, at Buyer’s sole cost and expense, of audited financial statements of
the Property for calendar years 2009 and 2010 year-to-date, including current
and historical operating statements and information regarding the
Property.

     

    20.           Wastewater Treatment
Plant.

     

    The Sellers have caused the Company to
enter into (i) that certain Development Agreement dated May 9, 2007 by and among
Oxford Properties, LLC, the Company and BlackRock Realty Advisors Community
Development Multifamily Equity Fund I, LLC (the “Development Agreement”), (ii)
that certain Agreement to Construct Community Waste Water Collection, Treatment
and Disposal Facilities in West Vincent Township (the “Wastewater Construction
Agreement”) dated May 21, 2007 with West Vincent Township, Chester County,
Pennsylvania (“Township”), and (ii) that certain Sewer Reimbursement Agreement
(the “Reimbursement Agreement”) dated May 21, 2007 with the Township (the
Development Agreement, Wastewater Construction Agreement and the Reimbursement
Agreement are hereinafter collectively referred to as the “Sewer Agreements”).
Under the terms of the Sewer Agreements, the Company has designed and
constructed a community sewer system consisting of a Sequential Batch Reactor
wastewater treatment plant and drip irrigation disposal system, together with
associated collection and conveyance facilities (the “System”) and an expansion
component (the “System Expansion”) on an approximately 12 acre parcel owned by
the Township, and the Township has agreed to accept dedication of the System and
the System Expansion. Sellers covenants and agrees to cause the Company to
promptly initiate the dedication of the System to the Township and to satisfy
all of the conditions to such dedication described in Section 9 of the
Wastewater Construction Agreement, at Sellers’ expense, on or prior to the
Closing Date.  Sellers’ hereby agree to indemnify and defend Buyer
against and hold Buyer harmless from any and all claims, liabilities, losses,
damages, costs and expenses, including, without limitation, all reasonable
attorneys’ fees, fees of consultants and expert witnesses and court and
arbitration costs asserted against or suffered by Buyer resulting from (i)
Sellers’ failure to cause the Company to dedicate the System to the Township and
to satisfy all of the conditions to such dedication described in Section 9 of
the Wastewater Construction Agreement, at Sellers’ expense or  (ii)
the Company’s breach of any covenant or obligation of the Company under the
Sewer Agreements. This Section 20 shall survive the Closing.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

            [SIGNATURES
COMMENCE ON FOLLOWING PAGE]

     

    IN
WITNESS WHEREOF, the parties hereto have executed this Contract of Purchase and
Sale as of the date first written above.

     

    
      
        	 	
                SELLERS:

              	 
	 	 	 
	 	
                OXFORD RISE PARTNERS
      LLC, Managing
      Member

              
	 	 	 
	 	By: 	Oxford
      Rise Development, LLC, its Manager
	 	 	 	 
	
                 

              	
                By: 
      

              	/s/ W. Daniel Faulk, Jr.	 
	 	 	W.
      Daniel Faulk, Jr., its Manager	 
	 	 	 	 


      

    

    
       

      
        
          	 	
                  WILLIAMS OPPORTUNITY FUND,
      LLC

                	 
	 	 	 
	 	By:	Williams
      Opportunity Fund Manager, LLC, 
 its
      Manager
	 	 	 
	 	By:	Williams
      Realty Advisors, LLC, its Manager
	 	 	 	 
	
                   

                	
                  By: 
      

                	/s/
      John A. Williams, Jr.	 
	 	 	John
      A. Williams, Jr., its President	 
	 	 	and
      Chief Operating Officer	 
	 	 	 	 
	 	Date
      of Execution: September 29, 2010	 


        

      

      
        
           

          
            
              	 	
                      
                        BUYER:

                      

                    	 
	 	 	 
	
                    	
                      
                        PREFERRED
      APARTMENT COMMUNITIES, INC.,
      

                        a
      Maryland
      corporation

                      

                    
	 	 	 	 
	
                       

                    	
                      By: 
      

                    	/s/ John A.
      Williams	 
	 	 	John
      A. Williams, its President	 
	 	 	and
      Chief Executive Officer	 
	 	 	 	 
	 	Date
      of Execution: September 29, 2010	 


            

          

           

          
            
              
              

            

            
              27

              
                

              

            

            
              
              

            

          

        

      

    

     

    EXHIBIT
“A”

     

    LAND

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
“B”

     

    TANGIBLE PERSONAL
PROPERTY

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
“C”

     

    CONTRACTS

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
“D”

     

    RENT
ROLL

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
“E”

     

    INSPECTION
MATERIALS

     

    
      	
              1.

            	
              Certified
      copies of all leases, tenant files, service contracts and Contracts and
      other obligations of the Sellers that pertain in any way to the Property
      (leases and tenant files need not be copied if made available for on-site
      inspection).

            


    

     

    
      	
              2.

            	
              Current
      and historical operating statements covering the past three (3) fiscal
      years. Previous Calendar year statements and current year to date
      statements need to be audited. The audit will be performed by Buyer, with
      the cooperation of Sellers, as set forth in Section 19 of the
      Contract.

            


    

     

    
      	
              3.

            	
              Monthly
      occupancy data for the past three (3) fiscal years, in Sellers’s
      possession, custody or control. Previous
      Calendar year statements and current year to date statements need to be
      audited.

            
	 	 
	4. 	Rental
      rate history for the past three (3) fiscal years.
	 	 
	5. 	Current
      year operating budget and capital budget.


    

              

    
      	
              6.

            	
              List
      of major capital expenditures (in excess of $5,000.00) for the past three
      (3) fiscal years.

            
	 	 
	7. 	Most
      recent title insurance policy and land title survey of the
    Property.


    

     

    
      	
              8.

            	
              Site
      plans, property plat and “as built” building plans, in Sellers’s
      possession, custody or control.

            


    

     

    
      	
              9.

            	
              All
      engineering studies or surveys including roof inspection reports,
      structural/mechanical/ electrical reports, geotechnical reports, elevator
      inspection reports, building measurements, in Sellers’s possession,
      custody or control.

            


    

     

    
      	
              10.

            	
              All
      environmental audits, reports and certifications, in Sellers’s possession,
      custody or control.

            


    

     

    
      	
              11.

            	
              All
      zoning and subdivision documents that may pertain to any proposed,
      exceptional, waived or grandfathered aspect of the Property’s zoning or
      permitted condition, in Sellers’s possession, custody or
      control.

            


    

     

    
      	
              12.

            	
              All
      construction, equipment and/or roof guaranties or warranties, in Sellers’s
      possession, custody or control.

            


    

     

    
      	
              13.

            	
              All
      certificates of occupancy issued by the applicable governmental authority
      for the Property.

            


    

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    
      	
              14.

            	
              Copies
      of notices pertaining to threatened or pending litigation, as well as
      access to Sellers’s incident files for the preceding three (3) year
      period.

            
	 	 
	15. 	Last
      six months deposit summaries and Bank statements.
	 	 
	16.	Insurance
      Loss Runs for the last three years (Property and Liability).
	 	 
	17. 	Utility
      bills for the past three months.
	 	 
	18.	All
      service contracts on the property.
	 	 
	19. 	Employee
      list and position.


    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
1

     

    ASSIGNMENT
AGREEMENT AND BILL OF SALE

     

    [TO
BE AGREED UPON BY SELLERS AND BUYER]

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
2

     

    FORM OF NON-FOREIGN AND
RESIDENCY AFFIDAVITS

     

    
      EXEMPTION
FROM WITHHOLDING OF TAX FOR

    

    DISPOSITIONS
OF U.S. REAL PROPERTY INTERESTS

     

    Section
1445 of the Internal Revenue Code provides that a transferee of a U.S. real
property interest must withhold tax if the transferor is a foreign
person.  For U.S. tax purposes (including Section 1445), the owner of
a disregarded entity (which has legal title to a U.S. real property interest
under local law) will be the transferor of the property and not the disregarded
entity. To inform _________________________ ("Transferee") that withholding of
tax is not required upon the disposition of a U.S. real property interest by
_____________________, a ______________________ ("Transferor"), the undersigned
hereby certifies the following on behalf of the Transferor:

     

    1.           Transferor
is not a nonresident alien, foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations) for purposes of U.S. income
taxation;

     

    2.           Transferor
is not a disregarded entity as defined in §1.1445-2(b)(2)(iii) of the Internal
Revenue Code;

     

    3.           Transferor’s
U.S. employer identification number is___________________; and

     

    4.           Transferor's
office address is _________________________________________.

     

    Transferor
understands that this certification may be disclosed to the Internal Revenue
Service by the Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.

     

    Under
penalties of perjury I declare that I have examined this certification and to
the best of my knowledge and belief it is true, correct, and complete, and I
further declare I have authority to sign this document on behalf of
transferor.

    
      
        	 	 	 	 	 
	
                 

              	 	 	
                
                  _______________________________ 
      

                

              	 
	
                 

              	 	 	
                Signature
      and Date

              	 
	 	 	 	 	 
	
                 

              	 	 	
                Title:
      __________________________

              	 


      

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
3

     

    SELLERS’S
CERTIFICATE

     

    Certification Of
Representations And Warranties Of Sellers

     

    This
Certification of Representations and Warranties of Sellers (this
"Certification"), is made as of the _____ day of ____________, 2010, by
_________________, a ________________________ (“Sellers”).

    


    WITNESSETH:

     

    WHEREAS,
Sellers entered into that certain Contract of Purchase and Sale dated _________,
2010, with Preferred Apartment Communities, Inc. ("Buyer") (the “Agreement”),
with respect to the sale and purchase of the membership interests of Sellers in
Oxford Rise JV, LLC, the owner of certain property located at 900 Selwyn Place,
West Vincent Township, Chester County, Pennsylvania,

    


    WHEREAS,
in accordance with the terms of the Agreement, Sellers are required to reaffirm
and certify certain representations and warranties made in the
Agreement.

    


    NOW,
THEREFORE, for and in consideration of the purchase price paid by Buyer to
Sellers, the receipt and sufficiency of which is hereby acknowledged by Sellers,
Sellers hereby certify that the representations and warranties made by Sellers
in Section 4 of the Agreement, or any other document or instrument delivered to
Buyer or its representatives, are true, correct and complete, in all material
respects, and so remain true, correct and complete, in all material respects, as
of the date hereof.

    


    IN
WITNESS WHEREOF, Sellers have executed this Certification under seal, the day
and year first above written.

     

    SELLERS:

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

       SCHEDULE
4

     

    OWNER’S
AFFIDAVIT

     

    STATE OF
_____________

     

    COUNTY OF
____________

     

    Personally
appeared before me the undersigned deponent, who first being duly sworn
according to law by the undersigned attesting officer, deposes and says on oath
as follows:

    


    THAT the
deponent is the _______________ of _____________, a ___________________, the
Manager of Oxford Rise JV, LLC (the “Company”), the owner of that certain parcel
of land (the “Property”) more particularly described on Exhibit “A” attached hereto
and incorporated herein by reference, and as such is familiar with the matters
set forth herein and is authorized to make this affidavit on behalf of the
Company.

    


    THAT
there are no unpaid or unsatisfied security deeds, mortgages, claims of lien,
special assessments for sewer, water main or street improvements, delinquent
water or sanitary bills, or other special assessments of any nature or taxes
which would constitute a lien against the property and that the Property, except
for those matters listed on Exhibit “B”, which is
attached hereto and is incorporated herein by this reference, is free and clear
of any encumbrances or any security deeds, mortgages, restrictions, easements,
claims of easements, encroachments, ways or rights of use, whether existing of
record or otherwise, that could in any way affect the title to the Property, or
constitute a lien thereon, except for those matters listed on Exhibit “B”, which is
attached hereto and incorporated herein by this reference.

    


    THAT
there is no outstanding indebtedness for equipment, appliances or other fixtures
attached to the Property.

    


    THAT the
lines and corners of the Property are clearly marked, and that there are no
disputes concerning the location of the lines and corners; and

    


    THAT
there are no pending suits, proceedings, judgments, bankruptcies, liens or
executions against the deponent, either in the county where the Property is
located or in any other county in the State of Georgia or elsewhere which could
affect title to the Property; and

    


    THAT
certain repairs or improvements have been made to the Property by, or at the
instance of, or with the consent of the Company within the last ninety-five (95)
days, but the same have been fully completed, and all costs for labor, material
and services incurred in connection therewith have been paid in full, and no
mechanic, materialman, laborer, or other party claims or has the right to claim
any lien against the Premises by virtue thereof; and

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    THAT the
Company has been in open notorious, adverse and peaceful possession of the
Property and that the undersigned deponent knows of no adverse claim to this
title to the Property; and

    


    THAT
there are no persons or other parties in possession of the Property, nor do any
persons or parties have any right or claim to possession of the Property
extending beyond the date of this Affidavit, except for those tenants, as
tenants only, under leases set forth on the rent roll attached hereto as Exhibit
C.

    


    THAT no
broker’s services have been engaged with regard to the management, sale,
purchase, lease, option or other conveyance of any interest in the subject
commercial real estate and no notice of any lien for any such services has been
received;

    


    THAT the
undersigned is making this affidavit with the knowledge that it will be relied
upon by ____________________ [insert Buyer] in purchasing the membership
interests in the Company and by Fidelity National Title Insurance Company in
insuring title to the Property.

     

    ________________________(SEAL)

     

    Sworn to
and subscribed before

    me this
____ day of ___________,

    2010.

     

    ______________________________

    Notary
Public

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    Exhibit
A

     

     [Insert
Legal Description]

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    Exhibit
B

     

    [Permitted
Exception]

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    Exhibit
C

     

    [Rent
Roll]

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    


       SCHEDULE
5

     

    RENT ROLL
CERTIFICATION

     

    Certification Of Rent
Roll

     

    This
Certification of Rent Roll (this "Certification"), is made as of the _____ day
of ____________, 2010, by _________________, a ________________________
(“Sellers”).

    


    WITNESSETH:

     

    WHEREAS,
Sellers entered into that certain Contract of Purchase and Sale dated _________,
2010, with Preferred Apartment Communities, Inc. ("Buyer") (the “Agreement”),
with respect to the sale and purchase of the membership interests of Sellers in
Oxford Rise JV, LLC, the owner of certain property located at 900 Selwyn Place,
West Vincent Township, Chester County, Pennsylvania (capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
Agreement); and

    


    WHEREAS,
in accordance with the terms of the Agreement, Sellers are required to deliver
at Closing a certified rent roll for the Property current as of the business day
immediately prior to the Closing Date and stating the amount of all of the
Security Deposits held by the Company under each Lease (the “Revised Rent
Roll”).

    


    NOW,
THEREFORE, for and in consideration of the purchase price paid by Buyer to
Sellers, the receipt and sufficiency of which is hereby acknowledged by Sellers,
Sellers hereby certify that the Revised Rent Roll is true, correct and complete,
in all material respects, as of the date hereof.

    


    IN
WITNESS WHEREOF, Sellers have executed this Certification under seal, the day
and year first above written.

     

    SELLERS:

     

    
      
        
        

      

      
        42