Document:

Exhibit 10.2

 

CORTEX PHARMACEUTICALS, INC. 

 

2014 EQUITY, EQUITY-LINKED AND EQUITY
DERIVATIVE INCENTIVE PLAN

 

This
2014 Equity, Equity-Linked and Equity Derivative Incentive Plan (the “Plan”) is hereby established and
adopted this 14th day of March, 2014 (the “Effective Date”) by Cortex Pharmaceuticals, Inc., a Delaware
corporation (the “Company”).

 

1.                 
Purposes of the Plan. The purposes of this 2014 Equity, Equity-Linked and Equity Derivative Incentive Plan (the “Plan”)
are to attract and retain qualified employees and officers, (collectively, employees and officers are referred to herein as
“Employees” as defined in more detailed below), directors, consultants, advisors and other service providers (collectively,
directors, consultants, advisors and other service providers are referred to herein as “Consultants” as defined in
more detail below) upon whose initiative, judgment and effort the successful conduct and development of the Company is dependent,
and to provide additional incentive to those Employees and Consultants, and to promote the success of the Company’s business.
Options granted under the Plan may be Incentive Stock Options as determined by the Administrator at the time of grant of an Option
and subject to the applicable provisions of Section 422 of the Code and the regulations promulgated thereunder or Non-Statutory
Stock Options (also, referred to as Non-Qualified Stock Options). Restricted Stock, Stock Appreciation Rights and Phantom Stock
may also be granted under the Plan.

 

2.                 
Definitions. As used herein, the following definitions shall apply:

 

(a)               
“Administrator” means the Committee.

 

(b)              
“Affiliate” means a corporation or other entity that, directly or through one or more intermediaries,
controls, is controlled by or is under common control with, the Company.

 

(c)               
“Applicable Laws” means all applicable laws, rules, regulations and requirements, including, but not
limited to, all applicable U.S. federal or state laws, any Stock Exchange rules or regulations, and the applicable laws, rules
or regulations of any other country or jurisdiction where Options, Restricted Stock, Stock Appreciation Rights or Phantom Stock
are granted under the Plan or Participants reside or provide services, as such laws, rules, and regulations shall be in effect
from time to time.

 

(d)              
“Award” means any award of an Option, Restricted Stock, Stock Appreciation Right or Phantom Stock under
the Plan.

 

(e)                “Award
Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator,
reflecting the terms of an Award granted under the Plan and includes any documents attached to or incorporated into such
Award Agreement, including, but not limited to, a notice of grant and a form of exercise notice.

 

    	 

    	 

    

 

(f)               
“Board” means the Board of Directors of the Company.

 

(g)              
“Cashless Exercise” means, to the extent that an Award Agreement so provides and as permitted by Applicable
Law, a program approved by the Committee in which a Participant may exercise an Option by directing the Company to deduct from
the Shares issuable upon exercise of his or her Option a number of Shares having an aggregate Fair Market Value equal to the sum
of the aggregate exercise price therefor plus the amount of the Participant’s minimum tax withholding (if any), unless such
Participant elects to reimburse the Company for such minimum tax withholding amounts in cash, whereupon the Company shall issue
to the Participant the net remaining number of Shares after such deductions.

 

(h)              
“Cause” for termination of a Participant’s Continuous Service Status will exist (unless another
definition is provided in an applicable Award Agreement, employment agreement or other applicable written agreement) if the Participant’s
Continuous Service Status is terminated for any of the following reasons: (i) any material breach by Participant of any material
written agreement between Participant and the Employer and Participant’s failure to cure such breach within the time prescribed
in such written agreement or in the event no such time is prescribed, then within 30 days after receiving written notice thereof;
(ii) any failure by Participant to comply with the Employer’s material written policies or rules as they may be in effect
from time to time; (iii) neglect or persistent unsatisfactory performance of Participant’s duties and Participant’s
failure to cure such condition within 30 days after receiving written notice thereof; (iv) Participant’s repeated failure
to follow reasonable and lawful instructions from the individual or group of individuals to whom he or she reports and Participant’s
failure to cure such condition within 30 days after receiving written notice thereof; (v) Participant’s conviction of, or
plea of guilty or nolo contendere to, any crime that results in, or is reasonably expected to result in, material harm to
the business or reputation of the Employer; (vi) Participant’s commission of or participation in an act of fraud against
the Employer; (vii) Participant’s intentional material damage to the Company’s business, property or reputation; or
(viii) Participant’s unauthorized use or disclosure of any proprietary information or trade secrets of the Employer or any
other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Employer.
For purposes of clarity, a termination without “Cause” does not include any termination that occurs as a result of
Participant’s death or Disability. The determination as to whether a Participant’s Continuous Service Status has been
terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing
definition does not in any way limit the Employer’s ability to terminate a Participant’s employment or consulting relationship
at any time. In the event that Section 2(h)(ii)-(viii) conflict with the terms of any written agreement between the Employer and
the Participant, the terms of the written agreement shall supercede the terms of Sections 2(h)(ii)-(viii) of this Plan and shall
be the determinant of Cause.

 

    	 

    	 

    

 

(i)“Change of Control”
means (i) a sale of all or substantially all of the Company’s assets other than to an Excluded Entity (as defined below),
(ii) a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another
corporation, limited liability company or other entity other than an Excluded Entity, or (iii) the consummation of a transaction,
or series of related transactions, in which any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of a majority
of the Company’s then outstanding voting securities. Notwithstanding the foregoing, a transaction shall not constitute a
Change of Control if its purpose is to (A) change the jurisdiction of the Company’s incorporation, (B) create a holding company
that will be owned in substantially the same proportions by the persons who hold the Company’s securities immediately before
such transaction, or (C) obtain funding for the Company in a financing that is approved by the Company’s Board. An “Excluded
Entity” means a corporation or other entity of which the holders of voting capital stock of the Company outstanding immediately
prior to such transaction are the direct or indirect holders of voting securities representing at least a majority of the votes
entitled to be cast by all of such corporation’s or other entity’s voting securities outstanding immediately after
such transaction.

 

(j)“Code” means the
Internal Revenue Code of 1986, as amended.

 

(k) “Committee” means
one or more committees or subcommittees of the Board consisting of two (2) or more Directors (or such lesser or greater number
of Directors as shall constitute the minimum number permitted by Applicable Laws to establish a committee or sub-committee of the
Board) appointed by the Board to administer the Plan in accordance with Section 4 below. In the event a committee has not been
established, the Board shall act as the Committee.

 

(l) “Common Stock” means
the Company’s common stock, par value $0.001 per share, as adjusted pursuant to Section 10 below.

 

(m) “Company” means Cortex
Pharmaceuticals, Inc., a Delaware corporation.

 

(n) “Consultant” means
any person or entity, including an advisor but not an Employee, that renders, or has rendered, services to the Employer and is
compensated for such services, and any Director whether compensated for such services or not.

 

    	 

    	 

    

 

(o) “Continuous Service Status”
means that the Participant’s service with the Employer, whether as an Employee or Consultant, is not interrupted or terminated.
The Participant’s Continuous Service Status shall not be deemed to have terminated merely because of a change in the capacity
in which the Participant renders service to the Employer as an Employee or Consultant or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service Status;
provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent
consistent with Section 409A of the Code. For example, a change in status from an Employee of the Company to a Consultant of an
Affiliate will not constitute an interruption of Continuous Service Status. The Committee or its delegate, in its sole discretion,
may determine whether Continuous Service Status shall be considered interrupted in the case of any leave of absence approved by
that party, including sick leave, military leave or any other personal or family leave of absence.

 

(p) “Director” means
a member of the Board of Directors of an Employer.

 

(q) “Disability” means
“disability” within the meaning of Section 22(e)(3) of the Code.

 

(r) “Employee” means
any person employed by the Employer, with the status of employment determined pursuant to such factors as are deemed appropriate
by the Company in its sole discretion, subject to any requirements of Applicable Laws, including the Code; provided, that, for
purposes of determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a
parent or subsidiary corporation within the meaning of Section 424 of the Code. The payment by the Company of a director’s
fee shall not be sufficient to constitute “employment” of such director by the Employer.

 

(s) “Employer” means
the Company and any Affiliate thereof; provided, that, for purposes of determining eligibility to receive Incentive Stock Options,
Employer shall mean the Company or a parent or subsidiary corporation within the meaning of Section 424 of the Code.

 

(t) “Exchange Act” means
the Securities Exchange Act of 1934, as amended.

 

(u) “Fair Market Value” on
any given day shall be the value of one share of Common Stock determined as follows: (i) if the Common Stock is then listed or
admitted to trading on a Nasdaq stock exchange or other stock exchange which reports closing sale prices, the Fair Market Value
shall be the closing sale price on the date of valuation on such Nasdaq stock exchange or other principal stock exchange on which
the Common Stock is then listed or admitted to trading, or, if no closing sale price is quoted on such day, then the Fair Market
Value shall be the closing sale price of the Common Stock on such Nasdaq stock exchange or such other exchange on the next preceding
day on which a closing sale price is reported, (ii) if the Common Stock is not then listed or admitted to trading on a Nasdaq
stock market or other stock exchange which reports closing sale prices, the Fair Market Value shall be the average of the closing
bid and asked prices of the Common Stock in the over-the-counter market on the date of valuation, (iii) if neither (i) nor (ii)
is applicable as of the date of valuation, then the Fair Market Value shall be determined by the Administrator in good faith based
upon a reasonable application of a reasonable valuation method in accordance with Section 409A of the Code, which determination
shall be conclusive and binding on all interested parties.

 

    	 

    	 

    

 

(v) “Family Members” means
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law (including adoptive relationships) of the Participant,
any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons (or the
Participant) have more than 50% of the beneficial interest, a foundation in which these persons (or the Participant) control the
management of assets, and any other entity in which these persons (or the Participant) own more than 50% of the voting interests.

 

(w) “Incentive Stock Option”
means an Option intended to, and which does, in fact, qualify as an incentive stock option within the meaning of Section 422
of the Code.

 

(x) “Listed Security”
means any security of the Company that is listed or approved for listing on a Nasdaq stock exchange or other national securities
exchange or designated or approved for designation as a national market system security on an interdealer quotation system including
the OTC Markets.

 

(y) “Net Exercise” means,
to the extent that an Award Agreement so provides and as permitted by Applicable Law, a program approved by the Committee in which
payment may be made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities
broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate exercise price
plus the amount of the Participant’s minimum tax withholding (if any).

 

(z) “Non-Statutory Stock Option”
means an Option that is not intended to, or does not, in fact, qualify as an Incentive Stock Option.

 

(aa) “Option” means a
stock option granted pursuant to the Plan and may be either an Incentive Stock Option or a Non-Statutory Stock Option.

 

(bb) “Option Exchange Program”
means a program approved by the Administrator, or the shareholders of the Company if required under Applicable Laws, whereby
outstanding Options (i) are exchanged for Options with a lower exercise price, Restricted Stock, Stock Appreciation Rights, Phantom
Stock, cash or other property or (ii) are amended to decrease the exercise price as a result of a decline in the Fair Market Value,
in each case to the extent permitted by Applicable Laws.

 

    	 

    	 

    

 

(cc) “Optioned Stock” means
Shares that are subject to an Option or that were issued pursuant to the exercise of an Option.

 

(dd) “Optionee” means
an Employee or Consultant who receives an Option.

 

(ee) “Participant” means
an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding
Award.

 

(ff) “Phantom Stock” means
the right of a Participant to receive cash compensation equal in amount to the multiplication of the number of Shares designated
in the Award Agreement times the Fair Market Value on the date such cash compensation becomes payable as described in the Award
Agreement. A Participant granted Phantom Stock pursuant to an Award Agreement does not have any voting rights or any rights to
dividends or the assets of the Company or any other rights of any class of shareholder. Holders of Phantom Stock are not shareholders
of the Company by virtue of holding Phantom Stock.

 

(gg) “Plan” means this
2014 Equity, Equity-Linked and Equity Derivative Incentive Plan.

 

(hh) “Restricted Stock” means
an Award pursuant to Section 8 below that grants the recipient a right to purchase or receive Shares that are subject to restrictions
as determined by the Administrator and set forth in an Award Agreement. Upon the lapse of all such restrictions, the Shares will
cease to be Restricted Stock for purposes of the Plan.

 

(ii) “Rule 16b-3” means
Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

 

(jj) “Share” means a
share of Common Stock, as adjusted in accordance with Section 10 below.

 

(kk) “Stock Appreciation Right”
means the right of a Participant to receive cash compensation equal in amount to the multiplication of the number of Shares designated
in the Award Agreement times the Fair Market Value on the date such cash compensation becomes payable minus the number of Shares
designated in the Award Agreement times the Fair Market Value on the date of Award Agreement. A Participant granted Stock Appreciation
Rights pursuant to an Award Agreement does not have any voting rights or any rights to dividends or the assets of the Company or
any other rights of any class of shareholder. Holders of Stock Appreciation Rights are not shareholders of the Company by virtue
of holding Stock Appreciation Rights.

 

    	 

    	 

    

 

(ll) “Stock Exchange” means
any stock exchange, including any Nasdaq Stock Exchange or any other stock exchange or consolidated stock price reporting system
on which prices for the Common Stock are quoted at any given time including the OTC Markets.

 

(mm) “Ten Percent Holder”
means a person who owns stock representing more than 10% of the voting power of all classes of stock of the Company or any
Affiliate measured as of an Award’s date of grant.

 

3.                 
Stock Subject to the Plan.Subject to the provisions of Section 10 below, the maximum aggregate number of Shares
that may be issued under the Plan is 105,633,002 Shares, all of which Shares may be issued under the Plan pursuant to Incentive
Stock Options or which may be issued pursuant to Non-Statutory Stock Options, or as Restricted Shares. The Shares issued under
the Plan may be authorized, but unissued, or reacquired Shares. If an Award should expire or become unexercisable for any reason
without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unissued Shares that were
subject thereto shall, unless the Plan shall have been terminated, continue to be available under the Plan for issuance pursuant
to future Awards. In addition, any Shares which are retained by the Company upon exercise of an Award in order to satisfy the exercise
or purchase price for such Award or any withholding taxes due with respect to such Award shall be treated as not issued and shall
continue to be available under the Plan for issuance pursuant to future Awards. Shares issued under the Plan and later forfeited
to the Company due to the failure to vest by the Company at the original purchase price paid to the Company for the Shares (including,
without limitation, upon forfeiture to the Company in connection with the termination of a Participant’s Continuous Service
Status) shall again be available for future grant under the Plan. Notwithstanding the foregoing, subject to the provisions of Section
10 below, in no event shall the maximum aggregate number of Shares that may be issued under the Plan pursuant to Incentive Stock
Options exceed the number set forth in the first sentence of this Section 3 plus, to the extent allowable under Section 422 of
the Code and the Treasury Regulations promulgated there under, any Shares that again become available for issuance pursuant to
the remaining provisions of this Section 3.

 

4.                 
Administration of the Plan.

 

(a)               
General. The Plan shall be administered by the Committee. If permitted by Applicable Laws, the Committee may authorize
one or more officers of the Company to make Awards under the Plan to Employees and Consultants (who are not subject to Section
16 of the Exchange Act) within parameters specified by the Committee.

 

    	 

    	 

    

 

(b)              
Committee Composition. The Committee shall continue to serve in its designated capacity until otherwise directed
by the Board. From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and dissolve
a Committee and thereafter directly administer the Plan, all to the extent permitted by Applicable Laws and, in the case of a Committee
administering the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted
or required by such provisions.

 

(c)               
Powers of the Administrator. Subject to the provisions of the Plan, the Administrator shall have the authority, in
its sole discretion: (i) to determine the Fair Market Value in accordance with Section 2(u) above, provided that such determination
shall be applied consistently with respect to Participants under the Plan; (ii) to select the Employees and Consultants to whom
Awards may from time to time be granted; (iii) to determine the number of Shares to be covered by each Award; (iv) to approve the
form(s) of agreement(s) and other related documents used under the Plan; (v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Award granted hereunder, which terms and conditions include but are not limited to the exercise
or purchase price, the time or times when Awards may vest and/or be exercised (which may be based on performance criteria), the
circumstances (if any) when vesting will be accelerated or forfeiture restrictions will be waived, and any restriction or limitation
regarding any Award, Optioned Stock, or Restricted Stock or Stock Appreciation Right or Phantom Stock; (vi) to amend any outstanding
Award or agreement related to any Optioned Stock or Restricted Stock or Stock Appreciation Right or Phantom Stock, including any
amendment adjusting vesting (e.g., in connection with a change in the terms or conditions under which such person is providing
services to the Company), provided that no amendment shall be made that would materially and adversely affect the rights of any
Participant without his or her consent; (vii) to determine whether and under what circumstances an Option may be settled in cash
under Section 7(c)(iii) below instead of Common Stock; (viii) subject to Applicable Laws, to implement an Option Exchange Program
and establish the terms and conditions of such Option Exchange Program without consent of the holders of capital stock of the Company,
provided that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Participant
shall be made without his or her consent; (ix) to approve addenda pursuant to Section 17 below or to grant Awards to, or to modify
the terms of, any outstanding Award Agreement or any agreement related to any Optioned Stock or Restricted Stock, or Stock Appreciation
Right or Phantom Stock held by Participants who are foreign nationals or employed outside of the United States with such terms
and conditions as the Administrator deems necessary or appropriate to accommodate differences in local law, tax policy or custom
which deviate from the terms and conditions set forth in this Plan to the extent necessary or appropriate to accommodate such differences;
and (x) to construe and interpret the terms of the Plan, any Award Agreement and any agreement related to any Optioned Stock or
Restricted Stock, Stock Appreciation Right or Phantom Stock, which constructions, interpretations and decisions shall be final
and binding on all Participants.

 

    	 

    	 

    

 

(d)              
Indemnification. To the maximum extent permitted by Applicable Laws, each member of the Committee (including officers
of the Company, if applicable), or of the Board, as applicable, shall be indemnified and held harmless by the Company against and
from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with
or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved
by reason of any action taken or failure to act under the Plan or pursuant to the terms and conditions of any Award except for
actions taken in bad faith or failures to act in bad faith, and (ii) any and all amounts paid by him or her in settlement thereof,
with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding
against him or her, provided that such member shall give the Company an opportunity, at its own expense, to handle and defend any
such claim, action, suit or proceeding before he or she undertakes to handle and defend it on his or her own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under
the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any other power
that the Company may have to indemnify or hold harmless each such person.

 

5.                 
Eligibility.

 

(a)               
Recipients of Grants. Non-Statutory Stock Options, Restricted Stock, Stock Appreciation Rights and Phantom Stock
may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees.

 

(b)              
Type of Option. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a
Non-Statutory Stock Option.

 

(c)               
ISO $100,000 Limitation. Notwithstanding any designation under Section 5(b) above, to the extent that the aggregate
Fair Market Value of Shares with respect to which options designated as Incentive Stock Options are exercisable for the first time
by any Optionee during any calendar year (under all plans of the Company or any parent or subsidiary) exceeds $100,000, such excess
options shall be treated as Non-Statutory Stock Options. For purposes of this Section 5(c), Incentive Stock Options shall be taken
into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an incentive stock option
shall be determined as of the date of the grant of such option.

 

(d)              
No Employment Rights. Neither the Plan nor any Award shall confer upon any Employee or Consultant any right with
respect to continuation of an employment or consulting relationship with the Employer, nor shall it interfere in any way with such
Employee’s or Consultant’s right or the Employer’s right to terminate his or her employment or consulting relationship
at any time, with or without cause.

 

    	 

    	 

    

 

6.                 
Term of Plan. The Plan shall become effective upon its adoption by the Board and shall continue in effect for
a term of 10 years unless sooner terminated under Section 13 below. The adoption of this Plan shall not serve to terminate the
Company’s 2006 Incentive Stock Plan, as amended from time-to-time.

 

7.                 
Options.

 

(a)               
Term of Option. The term of each Option shall be the term stated in the Option Agreement; provided that the term
shall be no more than 10 years from the date of grant thereof or such shorter term as may be provided in the Option Agreement and
provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent
Holder, the term of the Option shall be 5 years from the date of grant thereof or such shorter term as may be provided in the Option
Agreement.

 

(b)              
Option Exercise Price and Consideration.

 

(i)                
Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option shall
be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:
(1) in the case of an Incentive Stock Option: (i) granted to an Employee who at the time of grant is a Ten Percent Holder, the
per Share exercise price shall be no less than 110% of the Fair Market Value on the date of grant; (ii) granted to any other Employee,
the per Share exercise price shall be no less than 100% of the Fair Market Value on the date of grant; and (2) in the case of a
Non-Statutory Stock Option the per Share exercise price shall be such price as is determined by the Administrator, provided that,
if the per Share exercise price is less than 100% of the Fair Market Value on the date of grant, it shall otherwise comply with
all Applicable Laws, including Section 409A of the Code.

 

(ii)              
Permissible Consideration.The consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option and to
the extent required by Applicable Laws, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check;
(3) other previously owned Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which the Option is exercised; (4) a Cashless Exercise; (5) a Net Exercise; (6) such other consideration and
method of payment permitted under Applicable Laws; or (7) any combination of the foregoing methods of payment. In making its determination
as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably
expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept a particular form of consideration
at the time of any Option exercise.

 

    	 

    	 

    

 

(c)               
Exercise of Option.

 

(i)                
General.

 

(1)              
Exercisability. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined
by the Administrator, consistent with the terms of the Plan and reflected in the Option Agreement, including vesting requirements
and/or performance criteria with respect to the Employer, and/or the Optionee.

 

(2)              
Minimum Exercise Requirements. An Option may not be exercised for a fraction of a Share. The Administrator may require
that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from
exercising the full number of Shares as to which the Option is then exercisable.

 

(3)              
Procedures for and Results of Exercise. An Option shall be deemed exercised when written notice of such exercise
has been received by the Company in accordance with the terms of the Award Agreement by the person entitled to exercise the Option
and the Company has received full payment for the Shares with respect to which the Option is exercised and has paid, or made arrangements
to satisfy, any applicable taxes, withholding, required deductions or other required payments in accordance with Section 9 below.
The exercise of an Option shall result in a decrease in the number of Shares that thereafter may be available under the Plan and
the Option by the number of Shares as to which the Option is exercised.

 

(4)              
Rights as Holder of Capital Stock.Until the issuance of the Shares (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a holder of capital stock shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option.No
adjustment will be made for a dividend or other right for which the record date is prior to the date the stock is issued, except
as provided in Section 10 below.

 

(ii)              
Termination of Continuous Service Status. The Administrator shall establish and set forth in the applicable Award
Agreement the terms and conditions upon which an Option shall remain exercisable, if at all, following termination of an Optionee’s
Continuous Service Status, which provisions may be waived or modified by the Administrator at any time. To the extent that an Award
Agreement does not specify the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s
Continuous Service Status, the following provisions shall apply:

 

    	 

    	 

    

 

(1)              
General Provisions.Except as otherwise provide in an Award Agreement or by the Administrator at a later date
(in accordance with the terms of the Plan), if the Optionee (or other person entitled to exercise the Option) does not exercise
the Option to the extent so entitled within the time specified below, the Option shall terminate and the Optioned Stock underlying
the unexercised portion of the Option shall revert to the Plan. In no event may any Option be exercised after the expiration of
the Option term as set forth in the Option Agreement (and subject to this Section 7).

 

(2)              
Termination other than Upon Disability or Death or for Cause. In the event of termination of an Optionee’s
Continuous Service Status other than under the circumstances set forth in the subsections (3) through (5) below, such Optionee
may exercise any outstanding Option at any time within 12 month(s) following such termination to the extent the Optionee is vested
in the Optioned Stock as of the date of such termination or to any greater extent as determined by the Administrator.

 

(3)              
Disability of Optionee. In the event of termination of an Optionee’s Continuous Service Status as a result
of his or her Disability, such Optionee may exercise any outstanding Option at any time within one year following such termination
to the extent the Optionee is vested in the Optioned Stock as of the date of such termination or to any greater extent as determined
by the Administrator.

 

(4)              
Death of Optionee. In the event of termination of an Optionee’s Continuous Service Status as a result of his
or her death or in the event of the Optionee’s death during the exercise period set forth in subsections (2) or (3) above,
the Option may be exercised by any beneficiaries designated in accordance with Section 15 below, or if there are no such beneficiaries,
by the Optionee’s estate, or by a person who acquired the right to exercise the Option by bequest or inheritance, at any
time until the expiration date of the Option, but only to the extent the Optionee is vested in the Optioned Stock as of the date
of such death or to any greater extent as determined by the Administrator.

 

(5)              
Termination for Cause. In the event of termination of an Optionee’s Continuous Service Status for Cause, any
outstanding Option (including any vested portion thereof) held by such Optionee shall immediately terminate in its entirety upon
first notification to the Optionee of termination of the Optionee’s Continuous Service Status for Cause. If an Optionee’s
Continuous Service Status is suspended pending an investigation of whether the Optionee’s Continuous Service Status will
be terminated for Cause, all the Optionee’s rights under any Option, including the right to exercise the Option, shall be
suspended during the investigation period.

 

(iii)            
Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously
granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee
at the time that such offer is made.

 

    	 

    	 

    

 

8.                 
Restricted Stock, Stock Appreciation Rights and Phantom Stock.

 

(a)               
Rights to Purchase. When a right to purchase or receive Restricted Stock, any Stock Appreciation Right or any Phantom
Stock is granted under the Plan, the Company shall advise the recipient in writing of the terms, conditions and restrictions related
to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, if any (which
shall be as determined by the Administrator, subject to Applicable Laws, including any applicable securities laws), and the time
within which such person must accept such offer. The permissible consideration for Restricted Stock shall be determined by the
Administrator and shall be the same as is set forth in Section 7(b)(ii) above with respect to exercise of Options. The offer to
purchase Shares shall be accepted by execution of an Award Agreement in the form determined by the Administrator. In the case of
Stock Appreciation Rights and Phantom Stock, there shall be no right or obligation on the part of the Participant to purchase such
Stock Appreciation Right or Phantom Stock. Such grants shall have a zero dollar purchase price to the Participant.

 

(b)              
Other Provisions.The Award Agreement shall contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Award Agreements
need not be the same with respect to each Participant.

 

(c)               
Rights as a Holder of Capital Stock. Once the Restricted Stock is purchased (or if the Restricted Stock has no purchase
price, once the Restricted Stock is granted), but not in respect to Stock Appreciation Rights or Phantom Stock, the Participant
shall have the rights equivalent to those of a holder of capital stock, and shall be a record holder when his or her purchase and
the issuance of the Shares is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will
be made for a dividend or other right for which the record date is prior to the date the Restricted Stock is purchased, except
as provided in Section 10 below. Participants who hold or have received cash compensation in respect to Stock Appreciation Rights
or Phantom Stock shall never have rights as holders of capital stock in respect to such Participants’ Stock Appreciation
Rights or Phantom Stock.

 

9.                 
Taxes.

 

(a)               
As a condition of the grant, vesting and exercise of an Award, the Participant (or in the case of the Participant’s
death or a permitted transferee, the person holding or exercising the Award) shall make such arrangements as the Administrator
may require for the satisfaction of any applicable U.S. federal, state, local or foreign tax, withholding, and any other required
deductions or payments that may arise in connection with such Award. The Company shall not be required to issue any Shares under
the Plan until such obligations are satisfied.

 

    	 

    	 

    

 

(b)              
The Administrator may, to the extent permitted under Applicable Laws, permit a Participant (or in the case of the Participant’s
death or a permitted transferee, the person holding or exercising the Award) to satisfy all or part of his or her tax, withholding,
or any other required deductions or payments by Cashless Exercise, Net Exercise, or by surrendering Shares (either directly or
by stock attestation) that he or she previously acquired; provided that, unless specifically permitted by the Company, any such
Net Exercise must be an approved broker-assisted Net Exercise or the Shares withheld in the Cashless Exercise or Net Exercise must
be limited to avoid financial accounting charges under applicable accounting guidance and any such surrendered Shares must have
been previously held for any minimum duration required to avoid financial accounting charges under applicable accounting guidance.
Any payment of taxes by surrendering Shares to the Company may be subject to restrictions, including, but not limited to, any restrictions
required by rules of the Securities and Exchange Commission.

 

10.             
Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions.

 

(a)               
Changes in Capitalization.Subject to any action required under Applicable Laws by the holders of capital stock
of the Company, (i) the numbers and class of Shares or other stock or securities: (x) available for future Awards under Section
3 above and (y) covered by each outstanding Award, and (ii) the exercise price per Share of each such outstanding Option, shall
be automatically proportionately adjusted in the event of a stock split, reverse stock split, stock dividend, combination, consolidation,
reclassification of the Shares or subdivision of the Shares.In the event of any increase or decrease in the number of issued
Shares effected without receipt of consideration by the Company, a declaration of an extraordinary dividend with respect to the
Shares payable in a form other than Shares in an amount that has a material effect on the Fair Market Value, a recapitalization
(including a recapitalization through a large nonrecurring cash dividend), a rights offering, a reorganization, merger, a spin-off,
split-up, change in corporate structure or a similar occurrence, the Administrator shall make appropriate adjustments, in its discretion,
in one or more of (i) the numbers and class of Shares or other stock or securities: (x) available for future Awards under Section
3 above and (y) covered by each outstanding Award, and (ii) the exercise price per Share of each outstanding Option, and any such
adjustment by the Administrator shall be made in the Administrator’s sole and absolute discretion and shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to an Award.If, by reason of a transaction described in this Section 10(a) or an adjustment
pursuant to this Section 10(a), a Participant’s Award Agreement or agreement related to any Optioned Stock or Restricted
Stock or Stock Appreciation Right or Phantom Stock covers additional or different shares of stock or securities, then such additional
or different shares, and the Award Agreement or agreement related to the Optioned Stock, Restricted Stock, Stock Appreciation Right
or Phantom Stock in respect thereof, shall be subject to all of the terms, conditions and restrictions which were applicable to
the Award, Optioned Stock, Restricted Stock, Stock Appreciation Right or Phantom Stock prior to such adjustment.

 

    	 

    	 

    

 

(b)              
Dissolution or Liquidation.In the event of the dissolution or liquidation of the Company, each Award will terminate
immediately prior to the consummation of such action, unless otherwise determined by the Administrator.

 

(c)               
Corporate Transactions. In the event of (i) a transfer of all or substantially all of the Company’s assets,
(ii) a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another
corporation, entity or person, or (iii) the consummation of a transaction, or series of related transactions, in which any “person”
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of more than 50% of the Company’s then outstanding capital stock
(a “Corporate Transaction”), each outstanding Award (vested or unvested) will be treated as the Administrator determines,
which determination may be made without the consent of any Participant and need not treat all outstanding Awards (or portion thereof)
in an identical manner unless such treatment is described or defined in the Award Agreement. Such determination, without the consent
of any Participant, may provide (without limitation) for one or more of the following in the event of a Corporate Transaction:(A)
the continuation of such outstanding Awards by the Company (if the Company is the surviving corporation); (B) the assumption of
such outstanding Awards by the surviving corporation or its parent; (C) the substitution by the surviving corporation or its parent
of new options or equity awards for such Awards; (D) the cancellation of such Awards in exchange for a payment to the Participants
equal to the excess of (1) the Fair Market Value of the Shares subject to such Awards as of the closing date of such Corporate
Transaction over (2) the exercise price or purchase price paid or to be paid for the Shares subject to the Awards; or (E) the cancellation
of any outstanding Options or an outstanding right to purchase Restricted Stock, in either case, for no consideration.

 

11.             
Non-Transferability of Awards.

 

(a)               
General. Except as set forth in this Section 11, Awards may not be sold, pledged, assigned, hypothecated, transferred
or disposed of in any manner other than by will or by the laws of descent or distribution. With respect to Restricted Stock, these
restrictions will lapse at such time or times, and on such conditions, as the Administrator may specify in the Award Agreement.
The designation of a beneficiary by a Participant will not constitute a transfer. An Option may be exercised, during the
lifetime of the holder of the Option, only by such holder or a transferee permitted by this Section 11.

 

    	 

    	 

    

 

(b)              
Limited Transferability Rights. Notwithstanding anything else in this Section 11, the Administrator may in its sole
discretion provide that any Non-Statutory Stock Options, Stock Appreciation Rights and Phantom Stock may be transferred by instrument
to an inter vivos or testamentary trust in which such Awards are to be passed to beneficiaries upon the death of the trustor
(settlor) or by gift to Family Members. Further, beginning with (i) the period when the Company begins to rely on the exemption
described in Rule 12h-1(f)(1) promulgated under the Exchange Act, as determined by the Board in its sole discretion, and (ii) ending
on the earlier of (A) the date when the Company ceases to rely on such exemption, as determined by the Board in its sole discretion,
or (B) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, an Option,
or prior to exercise, the Shares subject to the Option, may not be pledged, hypothecated or otherwise transferred or disposed of,
in any manner, including by entering into any short position, any “put equivalent position” or any “call equivalent
position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the Exchange Act, respectively), other than, with respect to
Non-Statutory Stock Options, to (i) persons who are Family Members through gifts or domestic relations orders, or (ii) to an executor
or guardian of the Participant upon the death or disability of the Participant. Notwithstanding the foregoing sentence, the Board,
in its sole discretion, may permit transfers of Non-Statutory Stock Options, Stock Appreciation Rights or Phantom Stock to the
Company or in connection with a Change of Control or other acquisition transactions involving the Company to the extent permitted
by Rule 12h-1(f).

 

(c)               
Registration of Underlying Stock. Upon becoming legally permitted to file an S-8 registration statement with respect
to the shares underlying any Awards, the Company shall use its reasonable best efforts to file such an S-8 registration statement
as soon as reasonably practical.

 

12.             
Time of Granting Awards. The date of grant of an Award shall, for all purposes, be the date on which the Administrator
makes the determination granting such Award, or such other date as is determined by the Administrator.

 

13.             
Amendment and Termination of the Plan.The Board may at any time amend or terminate the Plan, but, except as otherwise
provided in Section 10, no amendment or termination shall be made that would materially and adversely affect the rights of any
Participant under any outstanding Award, without his or her consent. In addition, to the extent necessary and desirable to comply
with Applicable Laws, the Company shall obtain the approval of holders of capital stock with respect to any Plan amendment in such
a manner and to such a degree as required.

 

    	 

    	 

    

 

14.             
Conditions Upon Issuance of Shares. Notwithstanding any other provision of the Plan or any agreement entered into
by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver
any Shares under the Plan unless such issuance or delivery would comply with Applicable Laws, with such compliance determined by
the Company in consultation with its legal counsel. As a condition to the exercise of any Option or purchase of any Restricted
Stock, the Company may require the person exercising the Option or purchasing the Restricted Stock to represent and warrant at
the time of any such exercise or purchase that the Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is advisable or required
by Applicable Laws. Shares issued upon exercise of Options or purchase of Restricted Stock prior to the date, if ever, on which
the Common Stock becomes a Listed Security shall be subject to a right of first refusal in favor of the Company pursuant to which
the Participant will be required to offer Shares to the Company before selling or transferring them to any third party on such
terms and subject to such conditions as is reflected in the applicable Award Agreement.

 

15.             
Beneficiaries.If permitted by the Company, a Participant may designate one or more beneficiaries with respect
to an Award by timely filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed
form with the Company at any time before the Participant’s death. Except as otherwise provided in an Award Agreement, if
no beneficiary was designated or if no designated beneficiary survives the Participant, then after a Participant’s death
any vested Award(s) shall be transferred or distributed to the Participant’s estate or to any person who has the right to
acquire the Award by bequest or inheritance.

 

16.             
Approval of Holders of Capital Stock. Continuance of the Plan shall be subject to approval by the holders of capital
stock of the Company within 12 months before or after the date the Plan is adopted or, to the extent required by Applicable Laws,
any date the Plan is amended. Such approval shall be obtained in the manner and to the degree required under Applicable Laws.

 

17.             
Addenda. The Administrator may approve such addenda to the Plan as it may consider necessary or appropriate for the
purpose of granting Awards to Employees or Consultants, which Awards may contain such terms and conditions as the Administrator
deems necessary or appropriate to accommodate differences in local law, tax policy or custom, which may deviate from the terms
and conditions set forth in this Plan. The terms of any such addenda shall supersede the terms of the Plan to the extent necessary
to accommodate such differences but shall not otherwise affect the terms of the Plan as in effect for any other purpose.

 

18.             
Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424
of the Code) of all or any portion of Shares acquired upon exercise of an Incentive Stock Option within two years from the grant
date of such Incentive Stock Option or within one year after the issuance of the Shares acquired upon exercise of such Incentive
Stock Option (a “Disqualifying Disposition”) shall be required to immediately advise the Company in writing as to the
occurrence of the sale and the price realized upon the sale of such Shares.

 

    	 

    	 

    

 

19.             
Choice of Law. The law of the State of Delaware shall govern all questions concerning the construction, validity
and interpretation of this Plan, without regard to such state’s conflict of law rules.

 

20.             
Information to Holders of Options.In the event the Company is relying on the exemption provided by Rule 12h-1(f)
under the Exchange Act, the Company shall provide the information described in Rule 701(e)(3), (4) and (5) of the Securities Act
of 1933, as amended, to all holders of Options in accordance with the requirements thereunder until such time as the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. The Company may request that holders of Options
agree to keep the information to be provided pursuant to this Section confidential. If the holder does not agree to keep the information
to be provided pursuant to this Section confidential, then the Company will not be required to provide the information unless otherwise
required pursuant to Rule 12h-1(f)(1) of the Exchange Act.

 

    	 

    	 

    

 

ADDENDUM A

 

TO

 

2014 EQUITY, EQUITY-LINKED
AND EQUITY DERIVATIVE INCENTIVE PLAN

 

(For California residents
only, to the extent required by 25102(o))

 

This Addendum A to the 2014 Equity, Equity-Linked
and Equity Derivative incentive Plan shall apply only to the Participants who are residents of the State of California and who
are receiving an Award under the Plan. Capitalized terms contained herein shall have the same meanings given to them in the Plan,
unless otherwise provided by this Addendum A. Notwithstanding any provisions contained in the Plan to the contrary and to the extent
required by Applicable Laws, the following terms shall apply to all Awards granted to residents of the State of California, until
such time as the Administrator amends this Addendum A or the Administrator otherwise provides.

 

(a)   
The term of each Option shall be stated in the Award Agreement, provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof.

 

(b)  
If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent
and distribution, or (iii) as permitted by Rule 701 of the Securities Act of 1933, as amended (the “Securities Act”).

 

(c)   
If a Participant ceases to be an Employee or Consultant for a reason other than death, Disability or an involuntary termination
for Cause, such Participant may exercise his or her Option within such period of time as specified in the Award Agreement, which
shall not be less than thirty (30) days following the date of the Participant’s termination, to the extent that the Option
is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Award
Agreement).

 

(d)  
If a Participant ceases to be an Employee or Consultant as a result of the Participant’s Disability, the Participant
may exercise his or her Option within such period of time as specified in the Award Agreement, which shall not be less than six
(6) months following the date of the Participant’s termination, to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).

 

(e)   
If a Participant dies while an Employee or Consultant, the Option may be exercised within such period of time as specified
in the Award Agreement, which shall not be less than six (6) months following the date of the Participant’s death, to the
extent the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth
in the Award Agreement) by the Participant’s designated beneficiary, personal representative, or by the person(s) to whom
the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution.

 

    	 

    	 

    

 

(f)   
No Award shall be granted to a resident of California more than ten (10) years after the earlier of the date of adoption
of the Plan or the date the Plan is approved by the stockholders.

 

(g)  
The Administrator will make any adjustments to an Award required by Section 25102(o) of the California Corporations Code
to the extent the Company is relying upon the exemption afforded thereby with respect to the Award.

 

(h)  
This Addendum A shall be deemed to be part of the Plan and the Administrator shall have the authority to amend this Addendum
A in accordance with Section 14 of the Plan.Exhibit 10.2

 

Texas

Loan No. 340043

RECORDING REQUESTED BY

 

	 	 
	WHEN RECORDED MAIL TO	 

 

The Northwestern Mutual Life Ins. Co.

720 East Wisconsin Avenue - Rm N16WC

Milwaukee, WI 53202

Attn: John Carbonara

	LLT2211008331de	SPACE ABOVE THIS LINE FOR RECORDER'S USE

 

This instrument was prepared by James L. McFarland, Attorney,
for The Northwestern Mutual Life Insurance Company, 720 East Wisconsin Avenue, Milwaukee, WI 53202.

 

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.

 

DEED OF TRUST and SECURITY AGREEMENT

 

THIS DEED OF TRUST and SECURITY AGREEMENT is made as of
the 12th day of March, 2014 between TS CRAIG RANCH, LLC, a Delaware limited liability company, whose mailing address
is c/o Trade Street Residential, Inc., 19950 W. Country Club Drive, Suite 800, Aventura, FL, 33180, Attn: Richard Ross, CFO, herein
(said Grantor/Trustor, whether one or more in number) called "Grantor", and KEVIN L. WESTRA, whose mailing address is
c/o Northwestern Mutual Real Estate Investments, LLC, 15455 Dallas Parkway, Suite 1080, Addison, TX, 75001, herein called "Trustee",
and THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation, whose mailing address is 720 E. Wisconsin Avenue,
Milwaukee, WI, 53202, herein called "Beneficiary":

 

WITNESSETH, That Grantor, in consideration
of the indebtedness herein mentioned, does hereby irrevocably bargain, sell, grant, transfer, assign and convey unto Trustee, in
trust, with power of sale and right of entry and possession, the following property (herein referred to as the "Property"):

 

    	1

    	 

    

 

		A.	The land in the City of McKinney, County of Collin, State
of Texas, described in Exhibit "A" attached hereto and incorporated herein (the "Land");

 

		B.	All easements, appurtenances, tenements and hereditaments
belonging to or benefiting the Land, including but not limited to all waters, water rights, water courses, all ways, trees, rights,
liberties and privileges;

 

		C.	All improvements to the Land, including, but not limited
to, all buildings, structures and improvements now existing or hereafter erected on the Land; all fixtures and equipment of every
description belonging to Grantor which are or may be placed or used upon the Land or attached to the buildings, structures or
improvements, including, but not limited to, all engines, boilers, elevators and machinery, all heating apparatus, electrical
equipment, air-conditioning and ventilating equipment, water and gas fixtures, and all furniture and easily removable equipment;
all of which, to the extent permitted by applicable law, shall be deemed an accession to the freehold and a part of the realty
as between the parties hereto; and

 

		D.	Grantor's interest in all articles of personal property
of every kind and nature whatsoever, including, but not limited to all carpeting, draperies, ranges, microwave ovens, refrigerators,
dishwashers, easily removable equipment and fixtures, and furniture, now or hereafter located upon the Land or in or on the buildings
and improvements and now owned or leased or hereafter acquired or leased by Grantor.

 

Grantor agrees not to sell, transfer, assign
or remove anything described in B, C and D above now or hereafter located on the Land without prior written consent from Beneficiary
unless (i) such action does not constitute a sale or removal of any buildings or structures or the sale or transfer of waters or
water rights and (ii) such action results in the substitution or replacement with similar items of equal value.

 

Without limiting the foregoing grants, Grantor hereby pledges
to Beneficiary, and grants to Beneficiary a security interest in, all of Grantor's present and hereafter acquired right, title
and interest in and to the Property and any and all

 

    	2

    	 

    

 

		E.	cash and other funds now or at any time hereafter deposited
by or for Grantor on account of tax, special assessment, replacement or other reserves required to be maintained pursuant to the
Loan Documents (as hereinafter defined) with Beneficiary or a third party, or otherwise deposited with, or in the possession of,
Beneficiary pursuant to the Loan Documents; and

 

		F.	surveys, soils reports, environmental reports, guaranties,
warranties, architect's contracts, construction contracts, drawings and specifications, applications, permits, surety bonds and
other contracts relating to the acquisition, design, development, construction and operation of the Property; and

 

		G.	accounts, chattel paper, deposit accounts, instruments,
equipment, inventory, documents, general intangibles, letter-of-credit rights, investment property and all other personal property
of Grantor, (including, without limitation, any and all rights in the property name "Avenues at Craig Ranch");
and

 

		H.	present and future rights to condemnation awards, insurance
proceeds or other proceeds at any time payable to or received by Grantor on account of the Property or any of the foregoing personal
property.

 

All personal property hereinabove described is hereinafter referred
to as the "Personal Property".

 

If any of the Property is of a nature that
a security interest therein can be perfected under the Uniform Commercial Code, this instrument shall constitute a security agreement
and financing statement if permitted by applicable law and Grantor authorizes Beneficiary to file a financing statement describing
such Property and, at Beneficiary's request, agrees to join with Beneficiary in the execution of any financing statements and to
execute any other instruments that may be necessary or desirable, in Beneficiary's determination, for the perfection or renewal
of such security interest under the Uniform Commercial Code.

 

TO HAVE AND TO HOLD the same unto Trustee
for the purpose of securing:

 

(a) Payment to the order of Beneficiary
of the indebtedness evidenced by a promissory note of even date herewith (and any restatement, extension or renewal thereof and
any amendment thereto) executed by Grantor for the principal sum of TWENTY-ONE MILLION TWO HUNDRED THOUSAND DOLLARS, with final
maturity no later than April 10, 2021 and with interest as therein expressed (which promissory note, as such instrument may be
amended, restated, renewed and extended, is hereinafter referred to as the "Note"), it being recognized that the funds
may not have been fully advanced as of the date hereof but may be advanced in the future in accordance with the terms of a written
contract; and

 

    	3

    	 

    

 

(b) Payment of all sums that may become
due Beneficiary under the provisions of, and the performance of each agreement of Grantor contained in, the Loan Documents.

 

"Loan Documents" means this instrument,
the Note, that certain Loan Application dated December 20, 2013 from Grantor to Beneficiary and that certain acceptance letter
issued by Beneficiary dated January 15, 2014 (together, the "Commitment"), that certain Absolute Assignment of Leases
and Rents of even date herewith between Grantor and Beneficiary (the "Absolute Assignment"), that certain Certification
of Borrower of even date herewith, that certain Limited Liability Company Supplement dated contemporaneously herewith, any other
supplements and authorizations required by Beneficiary and any other agreement entered into or document executed by Grantor and
delivered to Beneficiary in connection with the indebtedness evidenced by the Note, except for that certain Environmental Indemnity
Agreement of even date herewith given by Trade Street Residential, Inc., a Maryland corporation, (the "Principal") and
Grantor to Beneficiary (the "Environmental Indemnity Agreement"), as any of the foregoing may be amended from time to
time.

 

TO PROTECT THE SECURITY OF THIS DEED OF
TRUST, GRANTOR COVENANTS AND AGREES:

 

Payment of Debt. Grantor agrees to pay the indebtedness
hereby secured (the "Indebtedness") promptly and in full compliance with the terms of the Loan Documents.

 

Ownership. Grantor represents that it owns the
Property and has good and lawful right to convey the same and that the Property is free and clear from any and all encumbrances
whatsoever, except as appears in the title evidence accepted by Beneficiary. Grantor does hereby forever warrant and shall forever
defend the title and possession thereof against the claims of any and all persons whomsoever.

 

Maintenance of Property and Compliance with Laws.
Grantor agrees to keep the buildings and other improvements now or hereafter erected on the Land in good condition and repair;
not to commit or suffer any waste; to comply with all laws, rules and regulations affecting the Property; and to permit Beneficiary
to enter at all reasonable times for the purpose of inspection and of conducting, in a reasonable and proper manner, such tests
as Beneficiary determines to be necessary in order to monitor Grantor's compliance with applicable laws and regulations regarding
hazardous materials affecting the Property.

 

Tenants Using Chlorinated Solvents. Grantor agrees
not to lease any of the Property, without the prior written consent of Beneficiary, to (i) dry cleaning operations that perform
dry cleaning on site with chlorinated solvents or (ii) any other tenants that use chlorinated solvents in the operation of their
businesses.

 

    	4

    	 

    

 

Business Restriction Representation and Warranty.
Grantor represents and warrants that each of Grantor, all persons and entities owning (directly or indirectly) an ownership interest
in Grantor (other than owners of interests in a publicly traded entity), all guarantors of all or any portion of the Indebtedness,
and all persons and entities executing any separate indemnity agreement in favor of Beneficiary in connection with the Indebtedness:
(i) is not, and shall not become, a person or entity with whom Beneficiary is restricted from doing business under regulations
of the Office of Foreign Assets Control ("OFAC") of the Department of the Treasury (including, but not limited to, those
named on OFAC's Specially Designated Nationals and Blocked Persons list) or under any statute, executive order (including, but
not limited to, the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism), or other governmental action; (ii) is not, and shall not become, a person or entity
with whom Beneficiary is restricted from doing business under the International Money Laundering Abatement and Financial Anti-Terrorism
Act of 2001 or the regulations or orders thereunder; and (iii) is not knowingly engaged in, and shall not knowingly engage in,
any dealings or transaction or be otherwise associated with such persons or entities described in (i) or (ii) above.

 

Insurance. Grantor agrees to keep the Property
insured for the protection of Beneficiary and Beneficiary's wholly owned subsidiaries and agents in such manner, in such amounts
and in such companies as Beneficiary may from time to time approve, provided that said insurance and said amounts are required
by other institutional lenders for properties similar to the Property, and to keep the policies therefor, properly endorsed, on
deposit with Beneficiary, or at Beneficiary's option, to keep evidence of insurance acceptable to Beneficiary evidencing all insurance
coverages required hereunder on deposit with Beneficiary, which evidence shall reflect at least thirty (30) days notice of cancellation
to Beneficiary and shall list Beneficiary as the certificate holder or as a similar additional interest with Beneficiary's correct
mailing address and the loan number assigned to the loan (340043); if Grantor requests Beneficiary to accept a different form of
evidence, Beneficiary shall not unreasonably withhold its consent provided a copy of a standard mortgagee endorsement in favor
of Beneficiary stating that the insurer shall provide at least thirty (30) days notice of cancellation to Beneficiary accompanies
such evidence. Grantor shall furnish Beneficiary with renewals of all applicable insurance evidence no later than the actual insurance
expiration date.

 

If the Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty, Grantor shall give prompt written notice thereof to Beneficiary. Following the
occurrence of a casualty, Grantor, regardless of whether insurance proceeds are available, shall promptly proceed to restore, repair,
replace or rebuild the improvements on the Property to be of at least equal value and of substantially the same character as prior
to such damage or destruction, all to be effected in accordance with applicable law. All insurance loss proceeds from all property
insurance policies, whether or not required by Beneficiary (less expenses of collection) shall, at Beneficiary's option, be applied
on the Indebtedness, (without a prepayment fee) whether due or not, or to the restoration of the Property, or be released to Grantor,
but such application or release shall not cure or waive any default under any of the Loan Documents. If Beneficiary elects to apply
the insurance loss proceeds on the Indebtedness, no prepayment fee shall be due thereon.

 

    	5

    	 

    

 

COLLATERAL PROTECTION INSURANCE NOTICE.  TEXAS FINANCE
CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE NOTICE: (A) GRANTOR IS REQUIRED TO: (i) KEEP THE PROPERTY INSURED AGAINST
DAMAGE IN THE AMOUNT BENEFICIARY SPECIFIES; (ii) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE
STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER; AND (iii) NAME BENEFICIARY AS THE PERSON TO BE PAID UNDER THE POLICY IN THE
EVENT OF A LOSS; (B) GRANTOR MUST, IF REQUIRED BY BENEFICIARY, DELIVER TO BENEFICIARY A COPY OF THE POLICY AND PROOF OF THE PAYMENT
OF PREMIUMS; AND (C) IF GRANTOR FAILS TO MEET ANY REQUIREMENT LISTED HEREIN, BENEFICIARY MAY OBTAIN COLLATERAL PROTECTION INSURANCE
ON BEHALF OF GRANTOR AT GRANTOR’S EXPENSE.

 

Notwithstanding the first paragraph of this
provision entitled "Insurance", Beneficiary agrees that if the insurance loss proceeds are less than the
unpaid principal balance of the Note and if the casualty occurs prior to the last two (2) years of the term of the Note, then the
insurance loss proceeds (less expenses of collection) shall be applied to restoration of the Property to its condition prior to
the casualty, subject to satisfaction of the following conditions:

 

		(a)	There is no existing Event of Default at the time of
casualty.

 

		(b)	The casualty insurer has not denied liability for payment
of insurance loss proceeds to Grantor as a result of any act, neglect, use or occupancy of the Property by Grantor or any tenant
of the Property.

 

		(c)	Beneficiary shall be satisfied that all insurance loss
proceeds so held, together with supplemental funds to be made available by Grantor, shall be sufficient to complete the restoration
of the Property. Any remaining insurance loss proceeds may, at the option of Beneficiary, be applied on the Indebtedness (without
any prepayment fee), whether or not due, or be released to Grantor.

 

		(d)	If required by Beneficiary, Beneficiary shall be furnished
a satisfactory report addressed to Beneficiary from an environmental engineer or other qualified professional satisfactory to
Beneficiary to the effect that no adverse environmental impact to the Property resulted from the casualty.

 

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		(e)	Beneficiary shall release casualty insurance proceeds
as restoration of the Property progresses provided that Beneficiary is furnished reasonably satisfactory evidence of the costs
of restoration and if, at the time of such release, there shall exist no Monetary Default (as hereinafter defined) under the Loan
Documents and no Non-Monetary Default (as hereinafter defined) with respect to which Beneficiary shall have given Grantor notice
pursuant to the "Notice of Default" provision herein. If a Monetary Default shall occur or Beneficiary
shall give Grantor notice of a Non-Monetary Default, Beneficiary shall have no further obligation to release insurance loss proceeds
hereunder unless such default is cured within the cure period set forth in the "Notice of Default" provision
contained herein. If the estimated cost of restoration exceeds $250,000.00, (i) the drawings and specifications for the restoration
shall be approved by Beneficiary in writing prior to commencement of the restoration, and (ii) Beneficiary shall receive an administration
fee equal to the lesser of $50,000.00 or one percent (1%) of the cost of restoration.

 

		(f)	Prior to each release of funds, Grantor shall obtain
for the benefit of Beneficiary an endorsement to Beneficiary's title insurance policy insuring Beneficiary's lien as a first and
valid lien on the Property subject only to liens and encumbrances theretofore approved by Beneficiary.

 

		(g)	Grantor shall pay all costs and expenses incurred by
Beneficiary, including, but not limited to, reasonable outside legal fees, title insurance costs, third-party disbursement fees,
third-party engineering reports and inspections deemed necessary by Beneficiary.

 

		(h)	All reciprocal easement and operating agreements benefiting
the Property, if any, shall remain in full force and effect between the parties thereto on and after restoration of the Property.

 

		(i)	Beneficiary shall be satisfied that Projected Debt Service
Coverage of at least 1.80 will be produced from the leasing of not more than 93% of the Property to tenants under Approved Leases
(as hereinafter defined).

 

"Approved Leases" means leases
to (i) existing tenants or (ii) approved new tenants with leases satisfactory to Beneficiary for terms of at least one year, to
commence not later than thirty (30) days following completion of restoration.

 

"Projected Debt Service Coverage"
means a number calculated by dividing Projected Operating Income Available for Debt Service for the first fiscal year following
restoration of the Property by the debt service during the same fiscal year under all indebtedness secured by any portion of the
Property. For purposes of the preceding sentence, "debt service" means the greater of (x) debt service due under all
such indebtedness during the first fiscal year following completion of the restoration of the Property or (y) debt service that
would be due and payable during such fiscal year if all such indebtedness were amortized over 30 years (whether or not amortization
is actually required) and if interest on such indebtedness were due as it accrues at the face rate shown on the notes therefor
(whether or not interest payments based on such face rates are required).

 

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"Projected Operating Income Available
for Debt Service" means projected gross annual rent from the Approved Leases for the first full fiscal year following completion
of the restoration of the Property less:

 

		(A)	The operating expenses of the Property for the last fiscal year preceding the casualty and

 

		(B)	the following:

 

		(i)	the amount, if any, by which actual gross income during
such fiscal period exceeds that which would be earned from the rental of 93% of the gross leasable area in the Property;

 

		(ii)	the amount, if any, by which the actual management fee
is less than 3% of gross revenue during such fiscal period;

 

		(iii)	the amount, if any, by which the actual real estate taxes
are less than $830,155.00 per annum; and

 

		(iv)	the amount, if any, by which total operating expenses,
excluding management fees, real estate taxes and replacement reserves, are less than $1,054,104.00 per annum.

 

All projections referenced above shall be
calculated in a manner satisfactory to Beneficiary.

 

Condemnation. Grantor hereby assigns to Beneficiary
(i) any award and any other proceeds resulting from damage to, or the taking of, all or any portion of the Property, and (ii) the
proceeds from any sale or transfer in lieu thereof (collectively, "Condemnation Proceeds") in connection with condemnation
proceedings or the exercise of any power of eminent domain or the threat thereof (hereinafter, a "Taking"); the Condemnation
Proceeds may, at Beneficiary's option, be applied on the Indebtedness, whether due or not, or be released to Grantor, but such
application or release shall not cure or waive any default under any of the Loan Documents.

 

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Notwithstanding the foregoing, if the Condemnation Proceeds
are less than the unpaid principal balance of the Note and such damage or Taking occurs prior to the last two years of the term
of the Note, such Condemnation Proceeds (less expenses of collection) shall be applied to restoration of the Property to its condition
prior to the Taking, provided that restoration or replacement of the improvements on the Land to their functional and economic
utility prior to the Taking is possible and further subject to satisfaction of the following conditions:

 

		(a)	There is no existing Event of Default at the time of
the Taking.

 

		(b)	Beneficiary shall be satisfied that all Condemnation
Proceeds, together with supplemental funds to be made available by Grantor, shall be sufficient to complete the restoration of
the Property. Any remaining Condemnation Proceeds may, at the option of Beneficiary, be applied on the Indebtedness, whether or
not due, or be released to Grantor.

 

		(c)	If required by Beneficiary, Beneficiary shall be furnished
a satisfactory report addressed to Beneficiary from an environmental engineer or other qualified professional satisfactory to
Beneficiary to the effect that no adverse environmental impact to the Property resulted from the Taking.

 

		(d)	Beneficiary shall release Condemnation Proceeds as restoration
of the Property progresses provided that Beneficiary is furnished satisfactory evidence of the costs of restoration and if, at
the time of such release, there shall exist no Monetary Default under the Loan Documents and no Non-Monetary Default under the
Loan Documents with respect to which Beneficiary shall have given Grantor notice pursuant to the "Notice of Default"
provision herein. If a Monetary Default shall occur or Beneficiary shall give Grantor notice of a Non-Monetary Default, Beneficiary
shall have no further obligation to release Condemnation Proceeds hereunder unless such default is cured within the cure period
set forth in the "Notice of Default" provision contained herein. If the estimated cost of restoration
exceeds $250,000.00, (i) the drawings and specifications for the restoration shall be approved by Beneficiary in writing prior
to commencement of the restoration, and (ii) Beneficiary shall receive an administration fee equal to the lesser of $50,000.00
or one percent (1%) of the cost of restoration.

 

		(e)	Prior to each release of funds, Grantor shall obtain
for the benefit of Beneficiary an endorsement to Beneficiary's title insurance policy insuring Beneficiary's lien as a first and
valid lien on the Property subject only to liens and encumbrances theretofore approved by Beneficiary.

 

		(f)	Grantor shall pay all costs and expenses incurred by
Beneficiary, including, but not limited to, reasonable outside legal fees, title insurance costs, third-party disbursement fees,
third-party engineering reports and inspections deemed necessary by Beneficiary.

 

    	9

    	 

    

 

		(g)	All reciprocal easement and operating agreements benefiting
the Property, if any, shall remain in full force and effect between the parties thereto on and after restoration of the Property.

 

		(i)	Beneficiary shall be satisfied that Projected Debt Service
Coverage of at least 1.80 will be produced from the leasing of not more than 93% of the Property to tenants under Approved Leases.

 

Taxes and Special Assessments. Grantor agrees
to pay before delinquency all taxes and special assessments of any kind that have been or may be levied or assessed against the
Property, this instrument, the Note or the Indebtedness, or upon the interest of Trustee or Beneficiary in the Property, this instrument,
the Note or the Indebtedness, and to procure and deliver to Beneficiary within 30 days after Beneficiary shall have given a written
request to Grantor, the official receipt of the proper officer showing timely payment of all such taxes and assessments; provided,
however, that Grantor shall not be required to pay any such taxes or special assessments if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings and funds sufficient to satisfy the contested amount
have been deposited in an escrow satisfactory to Beneficiary.

 

Personal Property. With respect to the Personal
Property, Grantor hereby represents, warrants and covenants as follows:

 

(a)          Except for the security interest granted hereby,
Grantor is, and as to portions of the Personal Property to be acquired after the date hereof will be, the sole owner of the Personal
Property, free from any lien, security interest, encumbrance or adverse claim thereon of any kind whatsoever, other than as set
forth in the title insurance policy approved by Beneficiary. Grantor shall notify Beneficiary of, and shall indemnify and defend
Beneficiary and the Personal Property against, all claims and demands of all persons at any time claiming the Personal Property
or any part thereof or any interest therein.

 

(b)          Except as otherwise provided above, Grantor shall
not lease, sell, convey or in any manner transfer the Personal Property without the prior consent of Beneficiary.

 

(c)          Grantor is a limited liability company formed and
organized under the laws of the State of Delaware. Until the Indebtedness is paid in full, Grantor (i) shall not change its legal
name without providing Beneficiary with thirty (30) days prior written notice; (ii) shall not change its state of organization;
and (iii) shall preserve its existence and shall not, in one transaction or a series of transactions, merge into or consolidate
with any other entity.

 

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(d)          At the request of Beneficiary, Grantor shall join
Beneficiary in executing one or more financing statements and continuations and amendments thereof pursuant to the Uniform Commercial
Code in form reasonably satisfactory to Beneficiary, and Grantor shall pay the cost of filing the same in all public offices wherever
filing is deemed by Beneficiary to be necessary or desirable. Grantor shall also, at Grantor's expense, take any and all other
action requested by Beneficiary to perfect Beneficiary's security interest under the Uniform Commercial Code with respect to the
Personal Property, including, without limitation, exercising Grantor's best efforts to obtain any consents, agreements or acknowledgments
required of third parties to perfect Beneficiary's security interest in Personal Property consisting of deposit accounts, letter-of-credit
rights, investment property, and electronic chattel paper.

 

Other Liens. Grantor agrees to keep the Property
and any Personal Property free from all other liens either prior or subsequent to the lien created by this instrument other than
as set forth in the title insurance policy approved by Beneficiary. Except as set forth above, The (i) creation of any other lien
on any portion of the Property or on any Personal Property, whether or not prior to the lien created hereby, (ii) assignment or
pledge by Grantor of its revocable license to collect, use and enjoy rents and profits from the Property, or (iii) granting or
permitting of a security interest in or other encumbrance on the direct or indirect ownership interests in Grantor, shall constitute
a default under the terms of this instrument; except that upon written notice to Beneficiary, Grantor may lease equipment and may
proceed to contest in good faith and by appropriate proceedings any mechanics liens, tax liens or judgment liens with respect to
the Property or any Personal Property described herein, provided funds sufficient to satisfy the contested amount have been deposited
in an escrow account satisfactory to Beneficiary.

 

Indemnification, Duty to Defend and Costs, Fees and Expenses.
In addition to any other indemnities contained in the Loan Documents, Grantor shall indemnify, defend and hold Beneficiary
harmless from and against any and all losses, liabilities, claims, demands, damages, costs and expenses (including, but not limited
to, costs of title evidence and endorsements to Beneficiary's title insurance policy with respect to the Property and reasonable
attorney fees and other costs of defense) of this trust which may be imposed upon, incurred by or asserted against Beneficiary,
whether or not any legal proceeding is commenced with regard thereto, in connection with: (i) the enforcement of any of Beneficiary's
or Trustee's rights or powers under the Loan Documents; (ii) the interpretation of any of the terms and conditions of the Loan
Documents, (iii) the protection of Beneficiary's interest in the Property; or (iv) any accident, injury to or death of persons
or loss of or damage to property occurring in, on or about the Property or on any sidewalk, curb, parking area, space or street
located adjacent thereto excluding Beneficiary's gross negligence or willful misconduct . If any claim or demand is made or asserted
against Beneficiary by reason of any event as to which Grantor is obligated to indemnify or defend Beneficiary, then, upon demand
by Beneficiary, Grantor, at Grantor's sole cost and expense, shall defend such claim, action or proceeding in Beneficiary's name,
if necessary, by such attorneys as Beneficiary shall approve. Notwithstanding the foregoing, Beneficiary may, in Beneficiary's
sole discretion, engage its own attorneys to defend it or assist in its defense and Grantor shall pay the reasonable fees and disbursements
of such attorneys.

 

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Failure of Grantor to Act. If Grantor fails to
make any payment or do any act as herein provided, Beneficiary or Trustee may, without obligation to do so, without notice to or
demand upon Grantor and without releasing Grantor from any obligation hereof: (i) make or do the same in such manner and to such
extent as Beneficiary may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon
the Property for such purpose; (ii) appear in and defend any action or proceeding purporting to affect the security hereof, or
the rights or powers of Beneficiary or Trustee; (iii) pay, purchase, contest or compromise any encumbrance, charge or lien which
in the judgment of Beneficiary appears to be prior or superior hereto; and (iv) in exercising any such powers, pay necessary expenses,
employ counsel and pay its reasonable fees. Sums so expended and all losses, liabilities, claims, damages, costs and expenses required
to be reimbursed by Grantor to Beneficiary hereunder shall be payable by Grantor immediately upon demand with interest from date
of expenditure or demand, as the case may be, at the Default Rate (as defined in the Note). All sums so expended or demanded by
Beneficiary and the interest thereon shall be included in the Indebtedness and secured by the lien of this instrument.

 

Event of Default. Any default by Grantor in making
any required payment of the Indebtedness or any default in any provision, covenant, agreement, warranty or certification contained
in any of the Loan Documents shall, except as provided in the two immediately succeeding paragraphs, constitute an "Event
of Default".

 

Notice of Default. A default in any payment required
in the Note or any other Loan Document, whether or not payable to Beneficiary, (a "Monetary Default") shall not constitute
an Event of Default unless Beneficiary shall have given a written notice of such Monetary Default to Grantor and Grantor shall
not have cured such Monetary Default by payment of all amounts in default (including payment of interest at the Default Rate, as
defined in the Note, from the date of default to the date of cure on amounts owed to Beneficiary) within five (5) business days
after the date on which Beneficiary shall have given such notice to Grantor.

 

Any other default under the Note or under
any other Loan Document (a "Non-Monetary Default") shall not constitute an Event of Default unless Beneficiary shall
have given a written notice of such Non-Monetary Default to Grantor and Grantor shall not have cured such Non-Monetary Default
within thirty (30) days after the date on which Beneficiary shall have given such notice of default to Grantor (or, if the Non-Monetary
Default is not curable within such 30-day period, Grantor shall not have diligently undertaken and continued to pursue the curing
of such Non-Monetary Default and deposited an amount sufficient to cure such Non-Monetary Default in an escrow account satisfactory
to Beneficiary from which Grantor shall be permitted to draw amounts to pay for the costs of curing such Non-Monetary Default).

 

In no event shall the notice and cure period
provisions recited above constitute a grace period for the purposes of commencing interest at the Default Rate (as defined in the
Note).

 

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Substitution of Trustee. Beneficiary and its successors
and assigns may for any reason and at any time, without cause, appoint one or more persons to serve as substitute Trustee(s) by
written appointment delivered to such substitute Trustee(s) without notice to Grantor, without notice to, or the resignation or
withdrawal by, the existing Trustee and without recordation of such written appointment unless notice or recordation is required
by the laws of the jurisdiction in which the Property is located. Upon delivery of such appointment, the substitute Trustee(s)
shall be vested with the same title and with the same powers and duties granted to the original Trustee.

 

Appointment of Receiver. Upon commencement of
any proceeding to enforce any right under this instrument, including foreclosure thereof, Beneficiary (without limitation or restriction
by any present or future law, without regard to the solvency or insolvency at that time of any party liable for the payment of
the Indebtedness, without regard to the then value of the Property, whether or not there exists a threat of imminent harm, waste
or loss to the Property and whether or not the same shall then be occupied by the owner of the equity of redemption as a homestead)
shall have the absolute right to the appointment of a receiver of the Property and of the revenues, rents, profits and other income
therefrom, and said receiver shall have (in addition to such other powers as the court making such appointment may confer) full
power to collect all such income and, after paying all necessary expenses of such receivership and of operation, maintenance and
repair of said Property, to apply the balance to the payment of any of the Indebtedness then due.

 

Foreclosure. Upon the occurrence of an Event of
Default, the entire unpaid Indebtedness shall, at the option of Beneficiary, become immediately due and payable for all purposes
without any further notice or demand, except as required by law (ALL OTHER NOTICE OF THE EXERCISE OF SUCH OPTION, INCLUDING WITHOUT
LIMITATION NOTICE OF INTENT TO ACCELERATE, BEING HEREBY EXPRESSLY WAIVED), and Beneficiary may, in addition to exercising any rights
it may have with respect to the Personal Property under the Uniform Commercial Code of the jurisdiction in which the Property is
located, institute proceedings in any court of competent jurisdiction to foreclose this instrument as a mortgage, or to enforce
any of the covenants hereof, or Trustee or Beneficiary may (without limiting their rights under the foregoing provisions or otherwise),
either personally or by agent or attorney in fact, enter upon and take possession of the Property and may manage, rent or lease
the Property or any portion thereof upon such terms as Beneficiary may deem expedient, and collect, receive and receipt for all
rentals and other income therefrom and apply the sums so received as hereinafter provided in case of sale under Trustee’s
power of sale.

 

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Trustee is hereby further authorized and
empowered, to the extent permitted by applicable law, upon request of Beneficiary, to sell the Property, en masse or in separate
parcels (as Trustee may think best), at public auction to the highest bidder for cash, with or without having taken possession
of same. Any such sale (including notice thereof) shall comply with the applicable requirements, at the time of the sale, of any
statute or statutes, if any, governing sales of real property under powers of sale conferred by deeds of trust in the jurisdiction
in which the Property is located. If, at the time of the sale, there is no statute in force in the jurisdiction in which the Property
is located that governs sales of real property under powers of sale conferred by deeds of trust, such sale shall comply with applicable
law at the time of the sale. GRANTOR EXPRESSLY WAIVES ANY RIGHT TO A HEARING PRIOR TO SUCH SALE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW. At any time during the bidding, Trustee may require a bidding party (i) to disclose its full name, state and city of residence,
occupation, and specific business office location, and the name and address of the principal the bidding party is representing
(if applicable), and (ii) to demonstrate reasonable evidence of the bidding party's financial ability (or, if applicable, the financial
ability of the principal of such bidding party), as a condition to the bidding party submitting bids at the foreclosure sale. If
any such bidding party (the “Questioned Bidder”) declines to comply with the Trustee's requirement in this regard,
or if such Questioned Bidder does respond but the Trustee, in Trustee's sole and absolute discretion, deems the information or
the evidence of the financial ability of the Questioned Bidder (or, if applicable, the principal of such bidding party) to be inadequate,
then the Trustee may continue the bidding with reservation; and in such event (A) the Trustee shall be authorized to caution the
Questioned Bidder concerning the legal obligations to be incurred in submitting bids, and (B) if the Questioned Bidder is not the
highest bidder at the sale, or if having been the highest bidder the Questioned Bidder fails to deliver the cash purchase price
payment promptly to the Trustee, all bids by the Questioned Bidder shall be null and void. Trustee may, in Trustee's sole and absolute
discretion, determine that a credit bid may be in the best interest of the Grantor and Beneficiary, and elect to sell the mortgaged
Property for credit or for a combination of cash and credit; provided, however, that the Trustee shall have no obligation to accept
any bid except an all cash bid. In the event the Trustee requires a cash bid and cash is not delivered within a reasonable time
after conclusion of the bidding process, as specified by the Trustee, but in no event later than 3:45 p.m. local time on the day
of sale, then said contingent sale shall be null and void, the bidding process may be recommenced, and any subsequent bids or sale
shall be made as if no prior bids were made or accepted. Upon any foreclosure sale or sales of all or any portion of the Property
under the power of sale herein granted, Beneficiary may bid for and purchase the Property and shall be entitled to apply all or
any part of the Indebtedness as a credit to the purchase price.

 

    	14

    	 

    

 

After any sale under Trustee’s power
of sale pursuant to the immediately preceding paragraph, Trustee shall make good and sufficient deeds, assignments, and other conveyances
to the purchaser or purchasers thereunder in the name of Grantor, conveying the Property or any part thereof so sold to the purchaser
or purchasers with general warranty of title by Grantor. The legal holder of the Indebtedness may purchase the Property or any
part thereof, and it shall not be obligatory upon the purchasers at any such sale to see to the application of the purchase money.
It is agreed that in any deeds, assignments or other conveyances given by Trustee, any and all statements of fact or other recitals
therein made as to any act or thing having been duly done by or on behalf of Beneficiary or by or on behalf of Trustee, shall be
taken by all courts of law and equity as prima facie evidence that such statements or recitals are true, correct,
and complete facts. Trustee shall, out of the proceeds or avails of such sale, after first paying and retaining all fees, charges,
costs of advertising the Property and of making said sale, and attorneys’ fees, pay to Beneficiary or the legal holder of
the Indebtedness the amount thereof, including all sums advanced or expended by Beneficiary or the legal holder of the Indebtedness,
with interest from date of advance or expenditure at the Default Rate (as defined in the Note), rendering the excess, if any, as
provided by law. Such sale or sales and said deed or deeds so made shall be a perpetual bar, both in law and equity, against Grantor
and the heirs, successors and assigns of Grantor, and all other persons claiming the Property aforesaid, or any part thereof by,
from, through or under Grantor.

 

In addition to the above remedies, it is
agreed that upon the occurrence of an Event of Default, Beneficiary may, at its option, without demand or notice, request the Trustee,
and the Trustee shall be, and is hereby authorized and empowered to proceed with foreclosure and sale of the Property by advertisement
or in any manner provided by the laws of the state in which the Property is located in satisfaction of the item in default as if
under a full foreclosure, but without declaring the unmatured portion of the Indebtedness due; such sale shall be made subject
to the unmatured portion of the Indebtedness and it is agreed that such sale shall not in any manner affect the unmatured portion
of the Indebtedness, but as to such unmatured portion, this instrument shall remain in full force and effect just as though no
sale had been made under the provisions of this paragraph and it is further agreed that several sales may be made without exhausting
the right of sale for any unmatured portion of the Indebtedness or for any future breach of the covenants, conditions or stipulations
set out herein.

 

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Deficiency.

 

		(A)	IN THE EVENT AN INTEREST IN ANY OF THE PROPERTY AND PERSONAL PROPERTY IS FORECLOSED UPON PURSUANT TO A JUDICIAL OR NONJUDICIAL
FORECLOSURE SALE, GRANTOR AGREES THAT, NOTWITHSTANDING THE PROVISIONS OF SECTIONS 51.003, 51.004, AND 51.005 OF THE TEXAS PROPERTY
CODE (AS THE SAME MAY BE AMENDED FROM TIME TO TIME), AND TO THE EXTENT PERMITTED BY LAW, BENEFICIARY SHALL BE ENTITLED TO SEEK
A DEFICIENCY JUDGMENT FROM GRANTOR EQUAL TO THE DIFFERENCE BETWEEN THE AMOUNT OF THE RECOURSE OBLIGATIONS (AS DEFINED IN THE NOTE)
AND THE AMOUNT FOR WHICH THE PROPERTY AND PERSONAL PROPERTY WERE SOLD PURSUANT TO JUDICIAL OR NONJUDICIAL FORECLOSURE SALE. 
IN THE EVENT THAT BENEFICIARY FIRST OBTAINS A JUDGMENT AGAINST GRANTOR AND ANY OTHER PARTY OBLIGATED ON THE NOTE AND THEN JUDICIALLY
FORECLOSES, BENEFICIARY SHALL BE ENTITLED TO ENFORCE THE JUDGMENT AGAINST GRANTOR OR SAID PARTY IN AN AMOUNT EQUAL TO THE DIFFERENCE
BETWEEN THE AMOUNT OWING ON THE JUDGMENT AND THE AMOUNT FOR WHICH THE PROPERTY AND PERSONAL PROPERTY WERE SOLD PURSUANT TO A POST-JUDGMENT
JUDICIAL FORECLOSURE SALE.  GRANTOR EXPRESSLY RECOGNIZES THAT THIS SECTION CONSTITUTES A WAIVER OF THE ABOVE-CITED PROVISIONS
OF THE TEXAS PROPERTY CODE WHICH WOULD OTHERWISE PERMIT GRANTOR AND OTHER PERSONS AGAINST WHOM RECOVERY OF DEFICIENCIES IS SOUGHT
OR ANY GUARANTOR INDEPENDENTLY (EVEN ABSENT THE INITIATION OF DEFICIENCY PROCEEDINGS AGAINST THEM) TO PRESENT COMPETENT EVIDENCE
OF THE FAIR MARKET VALUE OF THE PROPERTY AND PERSONAL PROPERTY AS OF THE DATE OF THE FORECLOSURE SALE AND OFFSET AGAINST ANY DEFICIENCY
THE AMOUNT BY WHICH THE FORECLOSURE SALE PRICE IS DETERMINED TO BE LESS THAN SUCH FAIR MARKET VALUE.  GRANTOR FURTHER RECOGNIZES
AND AGREES THAT THIS WAIVER CREATES AN IRREBUTTABLE PRESUMPTION THAT THE FORECLOSURE SALE PRICE IS EQUAL TO THE FAIR MARKET VALUE
OF THE PROPERTY AND PERSONAL PROPERTY FOR PURPOSES OF CALCULATING DEFICIENCIES OWED BY GRANTOR, ANY GUARANTOR, AND OTHERS AGAINST
WHOM RECOVERY OF A DEFICIENCY IS SOUGHT.

 

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		(B)	ALTERNATIVELY, IN THE EVENT THE WAIVER PROVIDED FOR IN (A) ABOVE IS DETERMINED BY A COURT
OF COMPETENT JURISDICTION TO BE UNENFORCEABLE, THE FOLLOWING SHALL BE THE BASIS FOR THE FINDER OF FACT'S DETERMINATION OF THE FAIR
MARKET VALUE OF THE PROPERTY AND PERSONAL PROPERTY AS OF THE DATE OF THE FORECLOSURE SALE IN PROCEEDINGS GOVERNED BY SECTIONS 51.003,
51.004 AND 51.005 OF THE TEXAS PROPERTY CODE (AS AMENDED FROM TIME TO TIME):  (I) THE PROPERTY AND PERSONAL PROPERTY SHALL
BE VALUED IN AN "AS IS" CONDITION AS OF THE DATE OF THE FORECLOSURE SALE, WITHOUT ANY ASSUMPTION OR EXPECTATION THAT
THE PROPERTY AND PERSONAL PROPERTY WILL BE REPAIRED OR IMPROVED IN ANY MANNER BEFORE A RESALE OF THE PROPERTY AND PERSONAL PROPERTY
AFTER FORECLOSURE; (II) THE VALUATION SHALL BE BASED UPON AN ASSUMPTION THAT THE FORECLOSURE PURCHASER DESIRES A RESALE OF THE
PROPERTY AND PERSONAL PROPERTY FOR CASH PROMPTLY (BUT NO LATER THAN TWELVE (12) MONTHS) FOLLOWING THE FORECLOSURE SALE; (III) ALL
REASONABLE CLOSING COSTS CUSTOMARILY BORNE BY THE SELLER IN COMMERCIAL REAL ESTATE TRANSACTIONS SHOULD BE DEDUCTED FROM THE GROSS
FAIR MARKET VALUE OF THE PROPERTY AND PERSONAL PROPERTY, INCLUDING, WITHOUT LIMITATION, BROKERAGE COMMISSIONS, TITLE INSURANCE,
A SURVEY OF THE PROPERTY, TAX PRORATIONS, ATTORNEYS' FEES, AND MARKETING COSTS; (IV) THE GROSS FAIR MARKET VALUE OF THE PROPERTY
AND PERSONAL PROPERTY SHALL BE FURTHER DISCOUNTED TO ACCOUNT FOR ANY ESTIMATED HOLDING COSTS ASSOCIATED WITH MAINTAINING THE PROPERTY
AND PERSONAL PROPERTY PENDING SALE, INCLUDING, WITHOUT LIMITATION, UTILITIES EXPENSES, PROPERTY MANAGEMENT FEES, TAXES AND ASSESSMENTS
(TO THE EXTENT NOT ACCOUNTED FOR IN (III) ABOVE), AND OTHER MAINTENANCE, OPERATIONAL AND OWNERSHIP EXPENSES; AND (V) ANY EXPERT
OPINION TESTIMONY GIVEN OR CONSIDERED IN CONNECTION WITH A DETERMINATION OF THE FAIR MARKET VALUE OF THE PROPERTY AND PERSONAL
PROPERTY MUST BE GIVEN BY PERSONS HAVING AT LEAST FIVE (5) YEARS EXPERIENCE IN APPRAISING PROPERTY SIMILAR TO THE PROPERTY AND
PERSONAL PROPERTY AND WHO HAVE CONDUCTED AND PREPARED A COMPLETE WRITTEN APPRAISAL OF THE PROPERTY AND PERSONAL PROPERTY TAKING
INTO CONSIDERATION THE FACTORS SET FORTH ABOVE.

 

Appraisement, Stay and Redemption Laws. Grantor
expressly waives and relinquishes the benefit of all laws now existing or that may hereafter be enacted providing for any appraisement
before sale of any of the Property, commonly known as Appraisement Laws, and also the benefit of all laws that may hereafter be
enacted in any way extending the time for the enforcement or the collection of the Indebtedness, or creating or extending a period
for redemption from any sale made to collect the Indebtedness, commonly known as Stay Laws and Redemption Laws.

 

Prohibition on Transfer/One-Time Transfer. The
present ownership and management of the Property is a material consideration to Beneficiary in making the loan secured by this
instrument, and Grantor shall not (i) convey title to all or any part of the Property, (ii) enter into any contract to convey (land
contract/installment sales contract/contract for deed) title to all or any part of the Property which gives a purchaser possession
of, or income from, the Property prior to a transfer of title to all or any part of the Property ("Contract to Convey")
or (iii) cause or permit a Change in the Proportionate Ownership (as hereinafter defined) of Grantor. Any such conveyance, entering
into a Contract to Convey or Change in the Proportionate Ownership of Grantor shall constitute a default under the terms of this
instrument.

 

"Change in the Proportionate Ownership"
means a change in, or the existence of a lien on, the direct or indirect ownership interests of Grantor (except that transfers
of interests in Principal or any other entity which is a direct or indirect owner of Grantor and the ownership interests of which
are publicly traded shall not be considered a Change in the Proportionate Ownership).

 

    	17

    	 

    

 

Notwithstanding the above, provided there
is then no default in the terms and conditions of any Loan Document, the Property is completed, and upon prior written request
from Grantor, Beneficiary shall not withhold its consent to a one-time transfer of all but not less than all of the Property to
a single entity or individual, provided:

 

		(i)	the Property shall have achieved Debt Service Coverage (as hereinafter defined) of at least 1.80 for the last full fiscal year
and there are no junior liens on the Property;

 

		(ii)	the transferee or an owner of the transferee (the "Creditworthy Party") has a net worth, determined in accordance
with generally accepted accounting principles, of at least $100,000,000.00 with cash and cash equivalents of at least $7,500,000.00
after funding the equity needed to close the purchase and a minimum overall real estate portfolio debt service coverage ratio of
1.40 for the prior twelve (12) month period. In the event that transferee shall satisfy the financial requirements set forth in
this subsection (ii), all references to Creditworthy Party in subsections (iii) through (vi) hereafter shall be deemed deleted;

 

		(iii)	the transferee or the Creditworthy Party or a management company under contract with transferee is experienced in the ownership
and management of at least 1500 garden apartment units;

 

		(iv)	the transferee, the Creditworthy Party and all persons and entities owning (directly or indirectly) an ownership interest in
the transferee or the Creditworthy Party (other than owners of interests in a publicly traded entity) are not (and have never been)
(a) subject to any bankruptcy, reorganization or insolvency proceedings or any criminal charges or proceedings, or (b) a litigant,
plaintiff or defendant in any suit brought against or by Beneficiary;

 

		(v)	pursuant to written documentation prepared by and satisfactory to Beneficiary, the transferee assumes all of the obligations
and liabilities of Grantor under the Loan Documents, whether arising prior to or after the date of the transfer of the Property,
and Beneficiary receives a satisfactory enforceability opinion with respect thereto from counsel approved by Beneficiary;

 

		(vi)	the Creditworthy Party executes Beneficiary's form of Guarantee of Recourse Obligations as of the date hereof (incorporating
the Recourse Obligations and Triggering Event definitions set forth and defined in the Guarantee of Recourse Obligations executed
by Principal of even date herewith), the Creditworthy Party and the transferee execute Beneficiary's form of Environmental Indemnity
Agreement as of the date hereof, and Beneficiary receives a satisfactory enforceability opinion with respect to the foregoing from
counsel approved by Beneficiary;

 

    	18

    	 

    

 

		(vii)	an environmental report on the Property which meets Beneficiary's then current requirements and is updated to no earlier than
ninety (90) days prior to the date of transfer, is provided to Beneficiary at least thirty (30) days prior to the date of transfer
and the results of the report are satisfactory to Beneficiary at the time of transfer;

 

		(viii)	Grantor and Principal (a) shall remain liable under the Environmental Indemnity Agreement dated of even date herewith, except
for acts or occurrences after the date of transfer of the Property and (b) shall, except as provided in (a) above, be released
from all obligations and liabilities under the Loan Documents;

 

		(ix)	Beneficiary receives an endorsement to its policy of title insurance, satisfactory to Beneficiary insuring Beneficiary's lien
on the Property as a first and valid lien subject only to liens and encumbrances theretofore approved by Beneficiary;

 

		(x)	pursuant to written documentation prepared by and satisfactory to Beneficiary, the transferee (a) acknowledges that, in furtherance
and not in limitation of clause (v) above, it shall be bound by the representation and warranty contained in the covenant entitled
"Business Restriction Representation and Warranty" set forth in this instrument, and (b) certifies that
such representation and warranty is true and correct as of the date of transfer and shall remain true and correct at all times
during the term of the Note; and

 

		(xi)	the outstanding balance of the Note at the time of the transfer is not more than 50% of the gross purchase price of the Property
at the time of the purchase of the Property by Grantor occurring on the date of the advance of the proceeds of the Note.

 

If Grantor shall make a one-time transfer
pursuant to the above conditions, Beneficiary shall be paid a fee equal to one percent (1%) of the then outstanding balance of
the Note at the time of transfer. The fee shall be paid on or before the closing date of such one-time transfer. At the time of
such transfer, no modification of the interest rate or repayment terms of the Note will be required.

 

No subsequent transfers of the Property
shall be allowed and no Change in the Proportionate Ownership of transferee shall be allowed without Beneficiary's prior written
consent.

 

    	19

    	 

    

 

"Debt Service Coverage" means
a number calculated by dividing Net Operating Income Available for Debt Service for a fiscal period by the debt service during
the same fiscal period under all indebtedness (including the Indebtedness) secured by any portion of the Property. For purposes
of the preceding sentence, "debt service" means the actual debt service due under all indebtedness secured by any portion
of the Property based upon an amortization schedule which is the shorter of the actual amortization schedule or 30 years (whether
or not amortization is actually required) and, if an accrual loan, as if interest and principal on such indebtedness were due monthly.

 

"Net Operating Income Available for
Debt Service" means net income (prior to giving effect to any capital gains or losses and any extraordinary items) from the
Property, determined in accordance with generally accepted accounting principles, for a fiscal period, plus (to the extent deducted
in determining net income from the Property):

 

		A)	interest on indebtedness secured by any portion of the
Property for such fiscal period;

 

		B)	depreciation, if any, of fixed assets at or constituting
the Property for such fiscal period;

 

		C)	amortization of costs incurred in connection with any
indebtedness secured by any portion of the Property and leasing commissions which have been prepaid;

 

less:

 

		D)	an amount (positive or negative) to offset any rent averaging
adjustment resulting from adherence to FASB-13;

 

		E)	the amortization of free rent and any other tenant concessions
and promotional items not deducted in the calculation of net income above;

 

		F)	the amount, if any, by which actual gross income during
such fiscal period exceeds that which would be earned from the rental of 93% of the gross leasable area in the Property;

 

		G)	the amount, if any, by which the actual management fee
is less than 3% of gross revenue during such fiscal period;

 

		H)	the amount, if any, by which the actual real estate taxes
are less than $830,155.00 per annum; and

 

    	20

    	 

    

 

		I)	the amount, if any, by which total operating expenses,
excluding management fees, real estate taxes and replacement reserves, are less than $1,054,104.00 per annum.

 

All adjustments to net income referenced
above shall be calculated in a manner satisfactory to Beneficiary.

 

Financial Statements. Grantor agrees to furnish
to Beneficiary:

 

(A)          the following financial statements for the Property within
60 days after the close of each fiscal year of the Grantor (the "Property Financial Statements Due Date"):

 

		(i)	an unaudited statement of operations for such fiscal
year with a detailed line item break-down of all sources of income and expenses, including capital expenses broken down between,
capital maintenance, common area renovation, and expansion; and

 

		(ii)	a current rent roll identifying location, leased area,
lease begin and end dates, current contract rent, rent increases and increase dates, expense reimbursements, and any other recovery
items; and

 

		(iii)	an operating budget for the current fiscal year; and

 

(B)          the following financial statements that Beneficiary may,
in Beneficiary's sole discretion, require from time to time within 20 days after receipt of a written request from Beneficiary
(the "Requested Financial Statements Due Date")

 

		(i)	an unaudited balance sheet for the Property as of the
last day of Grantor's most recently closed fiscal year; and

 

		(ii)	an unaudited balance sheet for Grantor as of the last
day of Grantor's most recently closed fiscal year; and

 

		(iii)	an unaudited balance sheet for Principal as of the last
day of Principal's most recently closed fiscal year; and

 

		(iv)	an unaudited statement of cash flows for the Property
as of the last day of Grantor's most recently closed fiscal year; and

 

		(v)	an unaudited statement of cash flows for the Grantor
as of the last day of Grantor's most recently closed fiscal year; and

 

		(vi)	an unaudited statement of cash flows for unaudited Principal
as of the last day of Principal's most recently closed fiscal year.

 

    	21

    	 

    

 

Furthermore, Grantor shall furnish to Beneficiary
within 20 days after receipt of a written request (the "Additional Requested Financial Statements Due Date") from Beneficiary
such reasonable financial and management information in the possession of, or accessible to, Grantor which Beneficiary reasonably
determines to be useful in Beneficiary's monitoring of the value and condition of the Property, Grantor, or Principal.

 

The Property Financial Statements Due Date,
the Requested Financial Statements Due Date, and the Additional Requested Financial Statements Due Date are each sometimes hereinafter
referred to as a "Financial Statements Due Date".

 

Notwithstanding the foregoing, in no event
shall a Financial Statements Due Date for a particular financial statement be prior to the 60th day following the close
of the fiscal year covered by such financial statement.

 

If audited by the election of Grantor or
Principal, the financial statements identified in sections (A)(i), (A)(ii), and (B)(i) through (B)(vi) above, shall each be prepared
in accordance with generally accepted accounting principles by a certified public accountant satisfactory to Beneficiary. All unaudited
statements shall contain a certification by a senior officer of the general partner of Grantor stating that they have been prepared
in accordance with generally accepted accounting principles and that they are true and correct. The expense of preparing all of
the financial statements required in (A) and (B) above, shall be borne by Grantor.

 

Grantor acknowledges that Beneficiary requires
the financial statements and information required herein to record accurately the value of the Property for financial and regulatory
reporting.

 

In addition to all other remedies available
to Beneficiary hereunder, at law and in equity, if any financial statement, additional information or proof of payment of property
taxes and assessments is not furnished to Beneficiary as required in this provision entitled "Financial Statements"
and in the provision entitled "Taxes and Special Assessments", within 30 days after Beneficiary shall have
given written notice to Grantor that it has not been received as required,

 

			(x) interest on the unpaid principal balance of the Indebtedness shall as of the applicable Financial Statements Due Date or
the date such additional information or proof of payment of property taxes and assessments was due, accrue and become payable at
a rate equal to the sum of the Interest Rate (as defined in the Note) plus one percent (1%) per annum (the "Increased Rate");
and

 

			(y) Beneficiary may elect to obtain an independent appraisal and audit of the Property at Grantor's expense, and Grantor agrees
that it will, upon request, promptly make Grantor's books and records regarding the Property available to Beneficiary and the person(s)
performing the appraisal and audit (which obligation Grantor agrees can be specifically enforced by Beneficiary).

 

    	22

    	 

    

 

The amount of the payments due under the
Note during the time in which the Increased Rate shall be in effect shall be changed to an amount which is sufficient to reflect
the Increased Rate. Interest shall continue to accrue and be due and payable monthly at the Increased Rate until the date (the
"Receipt Date") on which all of the financial statements, additional information and proof of payment of property taxes
and assessments shall be furnished to or made available to Beneficiary as required. Commencing on the Receipt Date, interest on
the unpaid principal balance of the Note shall again accrue at the Interest Rate and the payments due thereafter shall be changed
to an amount which is sufficient to reflect the Interest Rate. Notwithstanding the foregoing, Beneficiary shall have the right
to conduct an independent audit at its own expense at any time.

 

Compliance With Water Regulations. Grantor agrees
to abide by all the statutes of the state in which the Property is located and the rules and regulations of any and all federal,
state and local authority having jurisdiction over the use and distribution of water or water resources, and shall not transfer,
sell, assign or relinquish the water rights now held or hereafter acquired covering the Property without the written consent of
the Beneficiary.

 

Property Management. The management company for
the Property shall be satisfactory to Beneficiary. Trade Street Property Management, LLC shall be deemed to be satisfactory to
Beneficiary. Any change in the management company without the prior written consent of Beneficiary shall constitute a default under
this instrument.

 

Deposits by Grantor. To assure the timely payment
of real estate taxes and special assessments (including personal property taxes, if appropriate), upon the occurrence of an Event
of Default, Beneficiary shall thence forth have the option to require Grantor to deposit funds with Beneficiary, in monthly or
other periodic installments in amounts estimated by Beneficiary from time to time sufficient to pay real estate taxes and special
assessments as they become due. If at any time the funds so held by Beneficiary shall be insufficient to pay any of said expenses,
Grantor shall, upon receipt of notice thereof, immediately deposit such additional funds as may be necessary to remove the deficiency.
All funds so deposited shall be irrevocably appropriated to Beneficiary to be applied to the payment of such real estate taxes
and special assessments and, at the option of Beneficiary after an Event of Default, the Indebtedness. Beneficiary may deduct from
any amounts so held, any fees, costs or expenses incurred in connection with holding such amounts and/or paying amounts to taxing
authorities or other parties, including, without limitation any fees, costs or expenses associated with paying amounts via e-check
or electronically.

 

    	23

    	 

    

 

Notices. Any notices, demands, requests and consents
permitted or required hereunder or under any other Loan Document shall be in writing, may be delivered personally or sent by certified
mail with postage prepaid or by reputable courier service with charges prepaid. Any notice or demand sent to Grantor by certified
mail or reputable courier service shall be addressed to Grantor at c/o Trade Street Residential, Inc., 19950 W. Country Club Drive,
Suite 800, Aventura, FL, 33180, Attn: Richard Ross, CFO, or such other address in the United States of America as Grantor shall
designate in a notice to Beneficiary given in the manner described herein. Any notice sent to Beneficiary by certified mail or
reputable courier service shall be addressed to The Northwestern Mutual Life Insurance Company to the attention of the Real Estate
Investment Department at 720 East Wisconsin Avenue, Milwaukee, WI, 53202, or at such other addresses as Beneficiary shall designate
in a notice given in the manner described herein. Any notice given to Beneficiary shall refer to the Loan No. set forth above.
Any notice or demand hereunder shall be deemed given when received. Any notice or demand which is rejected, the acceptance of delivery
of which is refused or which is incapable of being delivered during normal business hours at the address specified herein or such
other address designated pursuant hereto shall be deemed received as of the date of attempted delivery.

 

Modification of Terms. Without affecting the liability
of Grantor or any other person (except any person expressly released in writing) for payment of the Indebtedness or for performance
of any obligation contained herein and without affecting the rights of Beneficiary with respect to any security not expressly released
in writing, Beneficiary may, at any time and from time to time, either before or after the maturity of the Note, without notice
or consent: (i) release any person liable for payment of all or any part of the Indebtedness or for performance of any obligation;
(ii) make any agreement extending the time or otherwise altering the terms of payment of all or any part of the Indebtedness, or
modifying or waiving any obligation, or subordinating, modifying or otherwise dealing with the lien or charge hereof; (iii) exercise
or refrain from exercising or waive any right Beneficiary may have; (iv) accept additional security of any kind; (v) release or
otherwise deal with any property, real or personal, securing the Indebtedness, including all or any part of the Property.

 

Exercise of Options. Whenever, by the terms of
this instrument, of the Note or any of the other Loan Documents, Beneficiary is given any option, such option may be exercised
when the right accrues, or at any time thereafter, and no acceptance by Beneficiary of payment of Indebtedness in default shall
constitute a waiver of any default then existing and continuing or thereafter occurring unless such payment cures the default and
is made prior to the default becoming an Event of Default or unless such payment cures the default, is made after the default has
become an Event of Default, and Lender elects to accept the payment and accept the cure of the Event of Default.

 

Nature and Succession of Agreements. Each of the
provisions, covenants and agreements contained herein shall inure to the benefit of, and be binding on, the heirs, executors, administrators,
successors, grantees, and assigns of the parties hereto, respectively, and the term "Beneficiary" shall include the owner
and holder of the Note.

 

    	24

    	 

    

 

Legal Enforceability. No provision of this instrument,
the Note or any other Loan Documents shall require the payment of interest or other obligation in excess of the maximum permitted
by law. If any such excess payment is provided for in any Loan Documents or shall be adjudicated to be so provided, the provisions
of this paragraph shall govern and Grantor shall not be obligated to pay the amount of such interest or other obligation to the
extent that it is in excess of the amount permitted by law.

 

Limitation of Liability. Notwithstanding any provision
contained herein to the contrary, the personal liability of Grantor shall be limited as provided in the Note.

 

Miscellaneous. Time is of the essence in each
of the Loan Documents. The remedies of Beneficiary as provided herein or in any other Loan Document or at law or in equity shall
be cumulative and concurrent, and may be pursued singly, successively, or together at the sole discretion of Beneficiary, and may
be exercised as often as occasion therefor shall occur; and neither the failure to exercise any such right or remedy nor any acceptance
by Beneficiary of payment of Indebtedness in default shall in any event be construed as a waiver or release of any right or remedy.
Neither this instrument nor any other Loan Document may be modified or terminated orally but only by agreement or discharge in
writing and signed by Grantor and Beneficiary. If any of the provisions of any Loan Document or the application thereof to any
persons or circumstances shall to any extent be invalid or unenforceable, the remainder of such Loan Document and each of the other
Loan Documents, and the application of such provision or provisions to persons or circumstances other than those as to whom or
which it is held invalid or unenforceable, shall not be affected thereby, and every provision of each of the Loan Documents shall
be valid and enforceable to the fullest extent permitted by law.

 

Waiver of Jury Trial. Grantor and Beneficiary
hereby waive any right to trial by jury with respect to any action or proceeding (a) brought by Grantor, Beneficiary or any other
person relating to (i) the obligations secured hereby and/or any understandings or prior dealings between the parties hereto or
(ii) the Loan Documents or the Environmental Indemnity Agreement, or (b) to which Beneficiary is a party.

 

Captions. The captions contained herein are for
convenience and reference only and in no way define, limit or describe the scope or intent of, or in any way affect this instrument.

 

Governing Law. This instrument, the interpretation
hereof and the rights, obligations, duties and liabilities hereunder shall be governed and controlled by the laws of the state
in which the Property is located.

 

IN WITNESS WHEREOF, this instrument has
been executed by the Grantor as of the day and year first above written.

 

    	25

    	 

    

 

	 	TS CRAIG RANCH, LLC, a Delaware limited liability company
	 	 	 	 	 	 
	 	By:	Trade Street Operating Partnership, LP, a Delaware limited partnership, its sole member
	 	 	 	 	 	 
	 	 	By:	Trade Street OP GP, LLC, a Delaware limited liability company, its general partner
	 	 	 	 	 	 
	 	 	 	By:	Trade Street Residential, Inc., a Maryland corporation, its sole member
	 	 	 	 	 	 
	 	 	 	 	BY:	/s/ Richard Ross
	 	 	 	 	PRINTED NAME: Richard Ross                                                  
	 	 	 	 	TITLE:  	CEO/CFO

 

	STATE OF	 	Florida	)	 
	 	 	 	) ss.	 
	COUNTY OF	 	Miami-Dade	)	 

 

BEFORE ME, the undersigned authority, on
this day personally appeared Richard Ross known to me to be the person whose name is subscribed to the foregoing instrument, and
known to me to be the CEO/CFO of Trade Street Residential Inc., a Maryland corporation, the sole member of Trade Street OP GP,
LLC, a Delaware limited liability company, the general partner of Trade Street Operating Partnership, LP, a Delaware limited partnership,
the sole member of TS CRAIG RANCH, LLC, a Delaware limited liability company, and acknowledged to me that he executed said instrument
for the purposes and considerations therein expressed, and as the act of said limited liability company.

 

GIVEN under my hand and official seal, this 13th
day of March, 2014.

 

	 	/s/ Rachel Peters	 
	 	Rachel Peters,	Notary Public

 

My commission expires: 5/2/14

 

    	26

    	 

    

 

Exhibit "A"

 

Description of Property:

 

BEING a 19.681 acre tract of land situated in the George White
Survey, Abstract Number 993 in the City of McKinney, Collin County, Texas and being all of Lot 3, Block A of the McKinney Seven
Stacy Addition, as recorded in Clerk File No. 20110310010000460, Official Public Records of Collin County, Texas (OPRCCT) and also
being a portion of an 108.412 acre tract of land described by deed to McKinney Seven Stacy, LP, as recorded in Clerk File No. 20070222000245990
of the Deed Records of Collin County, Texas (DRCCT) and being more particularly described as follows:

 

BEGINNING at a point for corner at the southeast corner of said
108.412 acre tract of land and being located in the center of Rowlett Creek and also being located in the north line of Stacy Road
(F.M. 720), a 130' right-of-way;

 

THENCE along said north right-of-way line as follows:

 

South 89° 15' 43" West a distance of 117.34 feet to
a 5/8 inch iron rod found at the beginning of a tangent curve to the right having a radius of 1,335.00 feet, a chord bearing of
North 89° 26' 33" West, and a chord length of 60.34 feet;

 

Continuing along said curve to the right through a central angle
of 02° 35' 24" for an arc length of 60.35 feet to a 5/8 inch iron rod found for the point of tangency;

 

North 88° 08' 51" West a distance of 200.00 feet to
a 5/8 inch iron rod set with plastic cap stamped Adams Surveying 5610 (CIRS) at the beginning of a curve to the left having a radius
of 1,465.00 feet, a chord bearing of North 89° 26' 35" West, and a chord length of 66.23 feet;

 

Continuing along said curve to the left through a central angle
of 02° 35' 25" for an arc length of 66.23 feet to an "X" cut set in concrete for the point of tangency;

 

South 89° 15' 43" West a distance of779.97 feet to
a CIRS for the southeast corner of the remainder of said 108.412 acre McKinney Seven Stacy tract;

 

THENCE departing the north line of said Stacy Road, North 00°
23' 59" West a distance of 855.09 feet to a 5/8 inch iron rod found at the northwest corner of the herein described tract
of land;

 

THENCE North 89° 36' 01" East a distance of793.25 feet
to a point for corner in the center of said Rowlett Creek and being the northeast corner of the herein described tract of land;

 

THENCE along the approximate centerline of said Rowlett Creek,
South 26° 20' 21" East a distance of 535.79 feet to a point for corner;

 

    	27

    	 

    

 

THENCE continuing with the approximate centerline of said Rowlett
Creek, South 27° 49' 06" East a distance of 425.79 feet to the POINT OF BEGINNING;

 

CONTAINING within these metes and bounds 19.681 acres or 857,281
square feet of land more or less.

 

NOW KNOWN AS Lot 3R, Block A, McKinney Seven Stacy Addition,
an addition to the City of McKinney, Collin County, Texas, according to the plat thereof recorded in Clerk's File No. 20140311010000760,
Map Records of Collin County, Texas (MRCCT).

 

Tax Account Number for Informational Purposes: Collin County
Central Appraisal District has given Tax Account No. R1008800A00301.

 

Tract II:

 

Those appurtenant rights created in that certain
Reciprocal Easement Agreement with Covenants, Conditions and Restrictions filed 12/07/2007, recorded under Clerk's File No.
20071207001637170, Real Property Records, Collin County, Texas.

 

    	28

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