Document:

EXHIBIT 10.6

 

CHANGE IN CONTROL AND SEVERANCE AGREEMENT

 

This Change in Control and Severance Agreement (this “Agreement”)
is entered into by and between Morgan R. Brown (“Employee,” “you,” or “your”)
and Innovus Pharmaceuticals, Inc., a Nevada corporation (the “Company”). This Agreement has an effective date
of August 9, 2013 (the “Effective Date”).

 

RECITALS

 

		A.	The Board of Directors of the Company (the "Board") recognizes that it is possible that the Company could
terminate Employee’s employment with the Company and from time to time the Company may consider the possibility of an acquisition
by another company or other change in control transaction. The Board also recognizes that such considerations can be a distraction
to Employee and can cause Employee to consider alternative employment opportunities. The Board has determined that it is in the
best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity
of Employee, notwithstanding the possibility, threat or occurrence of such a termination of employment or the occurrence of a Change
in Control (as defined below) of the Company.

 

		B.	The Board believes that it is in the best interests of the Company and its stockholders to provide Employee with an incentive
to continue his employment with the Company and to motivate Employee to maximize the value of the Company for the benefit of its
stockholders.

 

		C.	The Board further believes that it is imperative to provide Employee with certain severance benefits upon Employee’s
termination of employment under specified circumstances, including in connection with a Change in Control. These benefits will
provide Employee with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the
possibility of a termination of employment, including in connection with a Change in Control.

 

		D.	To accomplish the foregoing objectives, the Board has directed the Company, upon execution of this Agreement by Employee, to
agree to the terms provided in this Agreement.

 

In consideration of the mutual covenants and promises made in
this Agreement, and in consideration of the continuing employment of Employee by the Company, Employee and the Company agree as
follows:

 

1.             At-Will Employment. The Company and Employee acknowledge that Employee’s employment is and shall continue to be at-will,
as defined under applicable law, and that Employee’s employment with the Company may be terminated by either party at any
time for any or no reason. If Employee’s employment terminates for any reason, Employee shall not be entitled to any payments,
benefits, award or compensation other than as provided in this Agreement. The rights and duties created by this Section 1
may not be modified in any way except by a written agreement executed by the President and Chief Executive Officer of the Company
(or his successor) upon direction from the Board of Directors.

 

2.             Definition
of Terms. The following terms referred to in this Agreement shall have the following meanings:

 

“Change in Control” means
a “change in control event” (as defined under Treasury Regulation Section 1.409A-3(i)(5) as in effect on the Effective
Date) or any change in control definition provided by the Plan.

 

“Code” means the Internal
Revenue Code of 1986 as amended.

 

“Company Headquarters”
means 4275 Executive Square, Suite 200, La Jolla, California, 92037.

 

“Compensatory Equity”
means any compensatory equity grants issued to you by the Company.

 

“Disability” is defined
to occur when you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than 12 months.

 

“Offer Letter” means
the letter dated May 24, 2013 pursuant to which the Company offered Employee employment and which was executed by Employee and
on behalf of the Company.

 

    	46

    	 

    

 

“Plan” means a Board-approved
employee stock incentive plan.

 

“Relocation” means Employee’s
permanent relocation to San Diego, California.

 

3.            
Consequences of Termination of Employment. For purposes of this Agreement, your last day of employment with the Company
is the “Termination Date”. Upon termination of your employment for any reason, you shall receive payment or
benefits from the Company covering the following: (i) all unpaid salary and unpaid vacation accrued through the Termination Date,
(ii) any payments/benefits to which you are entitled under the express terms of any applicable Company employee benefit plan, (iii)
any unreimbursed valid business expenses for which you have submitted properly documented reimbursement requests (iv) your then
outstanding Compensatory Equity as governed by their applicable terms and (v) a new computer laptop, new cell phone and new iPad
(or similar device) commensurate in quality with the devices you held immediately before the Termination Date (collectively, (i)
through (v) are the “Accrued Pay”).

 

You will also be eligible for other post-employment
payments and benefits as provided in this Agreement. Within no later than 90 days after the later of your Termination Date or the
date that you are not considered to be a ten percent shareholder under Section 16 of the Securities Exchange Act of 1934, you shall
no longer be considered a Company affiliate and the Company shall use commercially reasonable efforts to facilitate the timely
removal of any restrictive legends on any shares of Company common stock then held by you.

 

(a)                
Termination For Cause. For purposes of this Agreement, your employment may be terminated by the Company for “Cause”
as a result of the occurrence of one or more of the following:

 

		(i)	Your commission of fraud or other unlawful conduct in your performance of duties for the Company;

 

		(ii)	Your conviction of, or a plea of “guilty” or “no contest" to, a felony under the laws of the United
States or any state thereof, if such felony either is work-related or materially impairs your ability to perform services for the
Company; or

 

		(iii)	Your willful material breach of this Agreement.

 

For purposes of the foregoing, no act, or
failure to act, on your part shall be considered “willful” unless done, or omitted to be done, by you other than in
good faith, and without reasonable belief that your action or omission was in furtherance of the interests of the Company. The
foregoing is an exclusive list of the acts or omissions that shall be considered “Cause” for the termination of your
employment by the Company. The Board shall provide you with 30 days advance written notice specifically detailing the basis (and
factual circumstances) for the termination of your employment for Cause. During the 30 day period after you have received such
notice, you shall have an opportunity to cure or remedy such alleged Cause events and to present your case to the full Board (with
the assistance of your own counsel). A termination shall be deemed for Cause only if, following such 30 day period, at least 75%
of the group consisting of the members of the Board other than you (if you are then serving on the Board) vote affirmatively that
your termination is for Cause. You shall continue to receive all of the compensation and benefits provided by this Agreement during
the 30 day cure/remedy period.

 

(b)                
Good Reason. You may resign your employment from the Company for “Good Reason” within one year after
the date that any one of the following events described in Sections 3(b)(i), 3(b)(ii), 3(b)(iii) or 3(b)(iv)
(any one of which will constitute “Good Reason”) has first occurred without your written consent. Your resignation
for Good Reason will only be effective if the Company has not cured or remedied the Good Reason event within 30 days after its
receipt of your written notice of the Good Reason event. Such notice of your intention to resign for Good Reason must be provided
to the Company within 90 days of the initial existence of a Good Reason event. This “Good Reason” definition and process
is intended to comply with the safe harbor provided under Treasury Regulation Section 1.409A-1(n)(2)(ii) and shall be interpreted
accordingly.

 

		(i)	You have incurred a material diminution in your responsibilities, duties or authority (it shall be deemed to be a material
diminution of your duties, authority or responsibilities if you are no longer the sole Chief Financial Officer of the Company (or
if the Company has a parent entity, then you must be its sole Chief Financial Officer));

 

		(ii)	Your workplace has been relocated to a new location that is more than 25 miles away from Company Headquarters;

 

		(iii)	Any material reduction of your Base Salary or target bonus amount (as described in the Offer Letter); or

 

		(iv)	The Company has materially breached any provision of the Offer Letter including without limitation the failure to timely pay
you the compensation or benefits owed to you under the Offer Letter.

 

(c)                
Termination Without Cause or for Good Reason or Death or Disability. The Company may terminate your employment without Cause
or for Disability at any time, including in connection with a Change in Control, with 30 days advance written notice or you may
resign your employment for Good Reason or your employment may also be terminated due to your death or by you due to your Disability
(each of the foregoing, a “Qualifying Termination”). Any notice of termination by the Company that is not covered
by Section 6(a) must specify whether it was a termination without Cause or due to your Disability. Without your prior written
consent, once the Company has provided you with such a notice of termination under this Section 6(b) then it may not rescind
such notice nor may it modify the terms of your severance benefits described in this Agreement.

 

    	47

    	 

    

 

		(i)	After Relocation Occurs. If your employment is terminated due to a Qualifying Termination after the Relocation occurs,
then you will be eligible to receive the following benefits subject to your timely compliance with Section 3(e) and further
provided that no payments for such Qualifying Termination shall be made until on or after the date of a “separation from
service” within the meaning of Code Section 409A:

 

		a.	The Company shall provide you with a cash payment equal to the sum of (A) nine months of the amount of the base salary you
were receiving immediately prior to the Termination Date plus (B) the product of (1) nine months of the amount of the base salary
you were receiving immediately prior to the Termination Date times (2) your target annual bonus percentage as in effect immediately
prior to the Termination Date (the “Post-Relocation Severance Payment”). The Post-Relocation Severance
Payment shall be paid to you in a single cash lump sum payment within 15 days following the effective date of the Mutual Release
described in Section 3(e). To the extent necessary to comply with Code Section 409A, if the timing of when you execute the
Mutual Release would affect which tax year that such Post-Relocation Severance Payment could be paid, then the Post-Relocation
Severance Payment shall be paid in the second tax year.

 

		b.	The Company shall provide continuation of the health insurance benefits provided to Employee for Employee and Employee’s
eligible dependents immediately prior to the Termination Date at Company expense pursuant to the terms of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”) or other applicable law until the earlier of the date
nine months after the Termination Date or the date upon which Employee is no longer eligible for such COBRA or other benefits under
applicable law. If it becomes unreasonable for the Company to continue to pay for this continuing health coverage for you (or it
imposes adverse tax consequences on you) because of changes in applicable law, then the Company shall make the premium payments
to you on an after-tax basis.

 

		c.	All outstanding unvested Compensatory Equity awards shall fully vest and become exercisable (to the extent exercise is required)
as of the Termination Date.

 

		(ii)	Before Relocation. If your employment is terminated due to a Qualifying Termination before the Relocation occurs, then
you will be eligible to receive the following benefits subject to your timely compliance with Section 3(e) and further provided
that no payments for such Qualifying Termination shall be made until on or after the date of a “separation from service”
within the meaning of Code Section 409A:

 

		a.	The Company shall provide you with a cash payment equal to the sum of (A) one month of the amount of the base salary you were
receiving immediately prior to the Termination Date for every two continuous months of service to the Company (up to a maximum
of three months of the amount of such base salary) plus (B) the product of (1) five months of the amount of the base salary you
were receiving immediately prior to the Termination Date times (2) your target annual bonus percentage as in effect immediately
prior to the Termination Date (the “Pre-Relocation Severance Payment”). The Pre-Relocation Severance
Payment shall be paid to you in a single cash lump sum payment within 15 days following the effective date of the Mutual Release
described in Section 3(e). To the extent necessary to comply with Code Section 409A, if the timing of when you execute the
Mutual Release would affect which tax year that such Pre-Relocation Severance Payment could be paid, then the Pre-Relocation Severance
Payment shall be paid in the second tax year.

 

		b.	The Company shall provide continuation of the health insurance benefits provided to Employee for Employee and Employee’s
eligible dependents immediately prior to the Termination Date at Company expense pursuant to the terms of COBRA or other applicable
law until the earlier of the date five months after the Termination Date or the date upon which Employee is no longer eligible
for such COBRA or other benefits under applicable law. If it becomes unreasonable for the Company to continue to pay for this continuing
health coverage for you (or it imposes adverse tax consequences on you) because of changes in applicable law, then the Company
shall make the premium payments to you on an after-tax basis.

 

		(iii)	Mitigation. You shall not be required to mitigate the amount of any payment or benefit contemplated by this Section
3(c), nor shall any such payment or benefit be reduced by any earnings or benefits that you may receive from any other source.
If any cash payments that are owed to you under this Agreement are not paid to you within 15 days of their due date, then the Company
will additionally owe you interest on such late payments, payable on a monthly basis while any overdue amount is still outstanding,
with interest accruing at the then prevailing prime rate, compounded daily.

 

    	48

    	 

    

 

(d)                
Voluntary Termination. In the event you voluntarily terminate your employment with the Company without Good Reason and not
due to Disability, you will not be entitled to any payment or benefit contemplated by Section 3(c) but will receive your
Accrued Pay plus the other post-termination payments that are not predicated on a Qualifying Termination. You agree to provide
the Company with at least 15 days advance written notice of your intention to resign without Good Reason.

 

(e)                
Mutual Release of Claims. Subject to the next sentence, as a condition to receiving (and continuing to receive) the payments
and benefits provided in Section 3(c), you must within not later than 45 days after your Termination Date, execute (and
not revoke) and deliver to the Company a Mutual Release Of All Claims And Covenant Not To Sue agreement (the “Mutual Release”)
in the form attached as Exhibit A hereto. However, this requirement for you to provide an executed Mutual Release shall
not be applicable if your employment was terminated due to your death or Disability. The Company shall have the obligation to prepare
and execute said Mutual Release and tender such Company-executed Mutual Release to you on or before your Termination Date.

 

4.                  
Code Section 280G.

 

(a)                
In the event that it is determined that any payment or distribution of any type to or for your benefit made by the Company, by
any of its affiliates, by any person who acquires ownership or effective control or ownership of a substantial portion of the Company’s
assets (within the meaning of Section 280G of the Code or by any affiliate of such person, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest or penalties, are collectively referred to as the “Excise Tax”), then such
payments or distributions or benefits shall be payable either: (i) in full; or (ii) as to the maximum value of such lesser amount
which would result in no portion of such payments or distributions or benefits being subject to the Excise Tax. You shall receive
the greater, on an after-tax basis, of clause “(i)” or “(ii)” of the preceding sentence.

 

(b)                
If the Total Payments must be reduced as provided in the previous paragraph, the reduction shall occur in the following order:
(i) reduction of cash payments for which the full amount is treated as a "parachute payment" (as defined under Code Section
280G and its regulations); (ii) cancellation of accelerated vesting (or, if necessary, payment) of cash awards for which the full
amount in not treated as a parachute payment; (iii) reduction of any continued employee benefits and (iv) cancellation of any accelerated
vesting of equity awards. In selecting the equity awards (if any) for which vesting will be reduced under clause “(iv)”
of the preceding sentence, awards shall be selected in a manner that maximizes the after-tax aggregate amount of reduced Total
Payments provided to you, provided that if (and only if) necessary in order to avoid the imposition of an additional tax under
Section 409A of the Code, awards instead shall be selected in the reverse order of the date of grant. For the avoidance of doubt,
for purposes of measuring an equity compensation award's value to you when performing the determinations under the preceding paragraph,
such award's value shall equal the then aggregate fair market value of the vested shares underlying the award less any aggregate
exercise price less applicable taxes. Also, if two or more equity awards are granted on the same date, each award will be reduced
on a pro-rata basis.

 

(c)                
All mathematical determinations and all determinations of whether any of the Total Payments are parachute payments that are required
to be made under this Section 4, shall be made by a nationally recognized independent audit firm selected by the Company
(the “Accountants”), who shall provide their determination, together with detailed supporting calculations regarding
the amount of any relevant matters, both to the Company and to you. Unless you consent in writing, the Accountants may not be an
audit firm that is then providing services in any capacity to the person or entity that is acquiring the Company. Such determinations
shall be made by the Accountants using reasonable good faith interpretations of the Code. As expressly permitted by Treasury Regulations
section 1.280G-1 Q/A-32, with respect to performing any present value calculations that are required in connection with this Section
4, you and the Company each affirmatively elect to utilize the Applicable Federal Rates ("AFR") that are in
effect as of the Effective Date and the Accountants shall therefore use such AFRs in their determinations and calculations. If
the Accountants determine that no excise tax under Section 4999 of the Code is payable with respect to a Total Payment, it shall
furnish the Company and you with an opinion reasonably acceptable to you that no such excise tax under Section 4999 of the Code
will be imposed with respect to such Total Payments. The Company shall pay the fees and costs of the Accountants which are incurred
in connection with this Section 4.

 

5.                  
Term of Agreement. The terms of this Agreement shall terminate upon the earlier of (a) the date on which Employee ceases
to be employed as an officer of the Company, other than as a result of an involuntary termination by the Company without Cause
or Employee’s resignation for Good Reason; or (b) the date that all obligations of the parties hereunder have been satisfied.
A termination of the terms of this Agreement pursuant to the preceding sentence shall be effective for all purposes, except that
such termination shall not affect the payment or provision of compensation or benefits on account of a termination of employment
occurring prior to the termination of the terms of this Agreement or the provisions of Section 8.

 

    	49

    	 

    

 

6.                  
Assignability; Binding Nature. Commencing on the Effective Date, this Agreement will be binding upon you and the Company
and your respective successors, heirs, and assigns. This Agreement may not be assigned by you except that your rights to compensation
and benefits hereunder, subject to the limitations of this Agreement, may be transferred by will or operation of law. No rights
or obligations of the Company under this Agreement may be assigned or transferred except in the event of a merger or consolidation
in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the
Company provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and
expressly in writing assumes the Company’s obligations under this Agreement. The Company will require any such purchaser,
successor or assignee to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such purchase, succession or assignment had taken place. Your rights and obligations
under this Agreement shall not be transferable by you by assignment or otherwise provided, however, that if you die, all amounts
then payable to you hereunder shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee
or, if there be no such designee, to your estate.

 

7.                  
Governing Law; Arbitration.

 

(a)                
This Agreement will be deemed a contract made under, and for all purposes shall be construed in accordance with, the laws of California.

 

(b)                
Except as may be permitted below in this Section 7, the parties agree that any dispute between the parties arising out of
or relating to the negotiation, execution or performance of this Agreement shall be settled by expedited binding arbitration in
accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association. The location
for the arbitration shall be San Diego, California. The arbitration award shall be made within 60 days of the filing of the notice
of intention to arbitrate (demand), and the arbitrator(s) shall agree to comply with this schedule before accepting appointment.
Any award made by such arbitrator(s) shall be final, binding and conclusive on the parties for all purposes, and judgment upon
the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The parties each agree that the
arbitration provisions of this Agreement shall provide each party with its exclusive remedy, and each party expressly waives any
right it might have to seek redress in any other forum, except as otherwise expressly provided in this Agreement. By electing arbitration
as the means for final settlement of all claims, the parties hereby waive their respective rights to, and agree not to, sue each
other in any action in a Federal, State or local court with respect to such claims, but may seek to enforce in court an arbitration
award rendered pursuant to this Agreement. The parties specifically agree to waive their respective rights to a trial by jury,
and further agree that no demand, request or motion will be made for trial by jury. In the event that either party brings an action
under this Section 7 to enforce or effect its rights under or relating to this Agreement (a “Proceeding”),
the prevailing party shall be entitled to recover its costs and expenses, including the costs of mediation, arbitration, litigation,
court fees, and reasonable attorneys’ fees incurred in connection with such an action. The Company shall pay for all arbitration-specific
costs.

 

(c)                
If you are determined by the arbitrator to be the prevailing party in any Proceeding where the Company was found to have materially
breached this Agreement, then, in addition to being awarded your costs and expenses, you shall be entitled to: (i) interest on
any late payments, calculated at a rate equal to the Prime Rate (as then quoted in the Wall Street Journal), compounded daily,
and (ii) the acceleration of payment for all remaining payments owed to you, so that the unpaid balance (including accrued interest)
shall be paid in a single lump sum within 10 business days of the issuance of the arbitrator’s award. You may also be awarded
any economic damages arising from the Company’s breach, as may be determined in the arbitrator in the Proceeding.

 

(d)                
In addition to the remedies set forth above, the parties hereby agree that they shall be entitled to enforce their rights under
this Agreement specifically (without posting a bond or other security). All such rights and remedies shall be cumulative and non-exclusive,
and may be exercised singularly or concurrently. The parties agree that irreparable harm would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Each party
agrees that, in the event of any breach or threatened breach by any other party of any covenant or obligation contained in this
Agreement, the non-breaching party shall be entitled to seek and obtain: (i) a decree or order of specific performance to enforce
the observance and performance of such covenant or obligation, and (ii) an injunction restraining such breach or threatened breach.

 

8.                  
Taxes. All payments made by the Company hereunder to you or your estate or beneficiaries will be subject to tax withholding
pursuant to any applicable laws or regulations. This Agreement and its payments are intended to be exempt from or comply with the
requirements of Code Section 409A and the Company shall use its best efforts to ensure that there are no violations of Code Section
409A. If any taxes under Code Section 409A are imposed on you, then the Company shall within 30 days of the determination that
there would be an imposition of such taxes provide you with a payment that will cover the costs of any Code Section 409A taxes,
excise taxes, penalties and interest along with any taxes imposed on such payment so that you will on an after-tax basis (applying
the then highest aggregate marginal tax rates) be no worse off than if no Code Section 409A taxes, excise taxes, penalties or interest
had been imposed. Notwithstanding any provision in the Agreement to the contrary, if upon your “separation from service”
within the meaning of Code Section 409A, you are then a “specified employee” (as defined in Code Section 409A), then
to the extent necessary to comply with Code Section 409A and avoid the imposition of taxes under Code Section 409A, the Company
shall defer payment of “nonqualified deferred compensation” subject to Code Section 409A payable as a result of and
within six months following such “separation from service” under this Agreement until the earlier of (i) the first
business day of the seventh month following your “separation from service,” or (ii) 10 days after the Company receives
notification of your death. Additionally, the reimbursement of expenses or in-kind benefits provided pursuant to this Agreement
shall be subject to the following conditions: (1) the expenses eligible for reimbursement or in-kind benefits in one taxable year
shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year; (2) the reimbursement of
eligible expenses or in-kind benefits shall be made promptly, subject to the Company’s applicable policies, but in no event
later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another benefit. The provisions of this Section 8 shall survive
any termination of this Agreement or your employment.

 

    	50

    	 

    

 

9.                  
Entire Agreement. Except as otherwise specifically provided in this Agreement and except for the Offer Letter, this Agreement
contains all the legally binding understandings and agreements between you and the Company pertaining to the subject matter of
this Agreement and supersedes all such agreements, whether oral or in writing, previously entered into between the parties. In
the event of any conflict in terms between this Agreement and any other agreement executed by and between you and the Company or
any Company plan or policy, the terms of this Agreement shall prevail and govern. This Agreement is the “Change of Control
and Severance Agreement” referred to in the Offer Letter.

 

10.               
No Offset or Mitigation. No severance or other payments or benefits made to you under this Agreement may be offset by the
Company or by any other party. You shall have no duty of mitigation with respect to any severance or other payments or benefits
made to you under this Agreement.

 

11.               
Notice. Any notice that the Company is required to or may desire to give you shall be given by personal delivery, recognized
overnight courier service, email, telecopy or registered or certified mail, return receipt requested, addressed to you at your
address of record with the Company, or at such other place as you may from time to time designate in writing. Any notice that you
are required or may desire to give to the Company hereunder shall be given by personal delivery, recognized overnight courier service,
email, telecopy or by registered or certified mail, return receipt requested, addressed to the Company’s President and Chief
Executive Officer at its principal office, or at such other office as the Company may from time to time designate in writing. The
date of actual delivery of any notice under this Section 11 shall be deemed to be the date of delivery thereof.

 

12.               
Waiver; Severability. No provision of this Agreement may be amended or waived unless such amendment or waiver is agreed
to by you and the Company in a writing that specifically references this Section 12. No waiver by you or the Company of
the breach of any condition or provision of this Agreement will be deemed a waiver of a similar or dissimilar provision or condition
at the same or any prior or subsequent time. Except as expressly provided herein to the contrary, failure or delay on the part
of either party hereto to enforce any right, power, or privilege hereunder will not be deemed to constitute a waiver thereof. In
the event any portion of this Agreement is determined to be invalid or unenforceable for any reason, the remaining portions shall
be unaffected thereby and will remain in full force and effect to the fullest extent permitted by law.

 

13.               
Voluntary Agreement, Nondisparagement. Each party represents that it has the power and authority to enter into this Agreement.
Each party acknowledges that it has been advised to review this Agreement with its own legal counsel and other advisors of its
choosing and that prior to entering into this Agreement, each has had the opportunity to review this Agreement with its attorney
and other advisors and have not asked (or relied upon) the other party or other party’s counsel to represent it in this matter.
Each party further represents that each has carefully read and understands the scope and effect of the provisions of this Agreement
and that each is fully aware of the legal and binding effect of this Agreement. This Agreement is executed voluntarily by each
party and without any duress or undue influence on the part or behalf of the other party. The Company agrees that the Board and
its executive officers will not make (or direct the Company or any of its affiliates, employees or agents to make) any written
or oral communications that could reasonably be considered to be disparaging of you (or your family members) in any respect including,
but not limited to, your personal performance, abilities or reputation.

 

14.               
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.

 

    	51

    	 

    

 

The parties have executed this Agreement as of the Effective
Date.

 

	 	COMPANY:
	 	 
	 	Innovus Pharmaceuticals, Inc.
	 	 
	 	s/ Bassam Damaj
	 	 
	By:  	Bassam Damaj
	Title:  	President and Chief Executive Officer
	 	 
	 	EMPLOYEE:
	 	 
	 	
        /s/ Morgan Brown

	 	

	 	Morgan R. Brown

 

    	52

    	 

    

 

EXHIBIT A

 

MUTUAL RELEASE OF ALL CLAIMS AND COVENANT
NOT TO SUE PURSUANT TO AGREEMENT

 

1.                  
PARTIES. The parties to this Mutual Release of All Claims and Covenant Not to Sue Pursuant To Agreement (this “Release”)
are Morgan R. Brown (“Executive”) and Innovus Pharmaceuticals, Inc., a Nevada corporation (the “Company”).

 

2.                  
RECITALS. This Release is made with reference to the following facts: Executive and Company are parties to a Change in Control
and Severance Agreement dated August 9, 2013 (the “Severance Agreement”). The Severance Agreement provides that
the Executive must execute a mutual general release and covenant not to sue within not later than forty-five (45) days after Executive’s
Termination Date (as defined in the Severance Agreement) in order for Executive to receive the severance payment and benefits under
the Severance Agreement. This Release is the mutual general release and covenant not to sue required by the Severance Agreement.

 

3.                  
EXECUTIVE’S PROMISES. In consideration for the promises and payments contained in the Severance Agreement, each party
agrees as follows:

 

3.1               
Executive hereby covenants not to sue and also waives, releases and forever discharges Company, its parent company, divisions,
subsidiaries, officers, directors, agents, employees, stockholders, affiliates and successors from any and all claims, causes of
action, damages or costs of any type Executive may have against Company or its current and former parent company, divisions, subsidiaries,
officers, directors, employees, agents, stockholders, successors or affiliates (the “Released Parties”), and
the Released Parties similarly covenant not to sue and also waive, release and forever discharge Executive from any and all claims,
causes of action, damages or costs of any type that the Released Parties may have against Executive, including without limitation
those arising out of or relating to Executive’s employment with Company, or Executive’s separation of employment. This
waiver and release includes, but is not limited to, claims, causes of action, damages or costs arising under or in relation to
Company’s employee handbook and personnel policies, or any oral or written representations or statements made by officers,
directors, employees or agents of Company, or under any state or federal law regulating wages, hours, compensation or employment,
or any claim for breach of contract or breach of the implied covenant of good faith and fair dealing, or any claim for stock, stock
options, warrants, or phantom stock or equity of any kind or any claim for wrongful termination, or any discrimination claim on
the basis of race, sex, sexual orientation, gender, age, religion, marital status, national origin, physical or mental disability,
medical condition, or any claim arising under the federal Age Discrimination in Employment Act, the Equal Pay Act, the California
Family Rights Act, the Pregnancy Discrimination Act, the Family Medical Leave Act, the California Labor Code, the California Wage
Orders, Title VII of the Civil Rights Act, the Fair Employment and Housing Act, the California Labor Code Private Attorneys General
Act of 2004, the California Wage Orders, and Business and Professions Code Section 17200, et seq.

 

Notwithstanding the foregoing, with respect to Executive’s
release, this Release does not release (a) claims that cannot be released as a matter of law, (b) claims arising after the effective
date of this Release including those under the Severance Agreement, (c) claims to enforce any of Executive’s rights to post-termination
benefits provided by the Severance Agreement, (d) claims for indemnification or coverage under a directors and officers liability
insurance policy as provided under any other contract or under applicable law, (e) claims to enforce any of Executive’s vested
benefits under any employee benefit plan of the Company including without limitation his Compensatory Equity (as defined in the
Severance Agreement), (f) Executive’s right to file a charge, testify, assist, or cooperate with the EEOC or to file a claim
under the Fair Labor Standards Act, or (g) Executive’s rights arising solely as a shareholder of the Company.

 

3.2               
The waiver and release set forth in paragraph 3.1 applies to claims of which either party does not currently have knowledge and
each party specifically waives the benefit of the provisions of Section 1542 of the Civil Code of the State of California which
reads as follows:

 

“A general release does not extend to claims
which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by
him or her must have materially affected his or her settlement with the debtor.”

 

4.                  
CONSULTATION, REVIEW, AND REVOCATION. In accordance with the Age Discrimination in Employment Act of 1967 (“ADEA”)
as amended by the Older Workers Benefit Protection Act, Executive is advised to consult with an attorney before signing this Release.
Executive is given a period of 45 days in which to consider whether to enter into this Release. Executive does not have to utilize
the entire 45 day period before signing this Release, and may waive this right. If Executive does enter into this Release, he may
revoke the Release within 7 days after the execution of the Release. Any revocation must be in writing and must be received by
the Company no later than midnight of the seventh day after execution by Executive. The Release is not effective or enforceable
until after this 7-day period has passed without revocation.

 

		5.	MISCELLANEOUS.

 

5.1               
This Release shall be deemed to have been executed and delivered within the State of California, and the rights and obligations
of the parties hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of California.

 

    	53

    	 

    

 

5.2               
This Release is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous oral and written agreements and discussions. This Release may be amended only by an agreement in a writing signed
by the parties.

 

5.3               
This Release is binding upon and shall inure to the benefit of the parties hereof, their respective agents, employees, representatives,
officers, directors, divisions, subsidiaries, affiliates, parent company, assigns, heirs, partners, successors in interest and
stockholders, including any successor company of the Company.

 

5.4               
Each party agrees that it has read this Release and has had the opportunity to ask questions, seek counsel and time to consider
the terms of the Release. Each party has entered into this Release freely and voluntarily.

 

5.5               
The parties agree that any dispute or controversy arising from or related to this Release shall be decided by final and binding
arbitration as provided in the Severance Agreement.

 

	Morgan R. Brown (“Executive”) 	 	INNOVUS PHARMACEUTICALS INC. (“Company”) 
	 	 	 
	Date:	 	 	By:	 
	 	 	It: 	 
	 	 	Date: 	 

  

    	54EXHIBIT 10.12

 

PURCHASE AND SALE CONTRACT

 

for

 

STACY ROAD PARTNERS, LLC,

  

a Georgia limited liability company,

 

THE SOLE OWNER OF

 

The Avenues at Craig Ranch

8700 Stacy Road

McKinney, Texas
75070

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	ARTICLE 1	DEFINED TERMS	 1
	 	 	 
	ARTICLE 2	PURCHASE AND SALE OF entity	 5
	 	 	 
	ARTICLE 3	PURCHASE PRICE, DEPOSIT AND ESCROW PROVISIONS	 5
	 	 	 
	ARTICLE 4	FINANCING	 6
	 	 	 
	ARTICLE 5	FEASIBILITY PERIOD	 6
	 	 	 
	ARTICLE 6	TITLE AND SURVEY	 8
	 	 	 
	ARTICLE 7	CLOSING	10
	 	 	 
	ARTICLE 8	REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER	14
	 	 	 
	ARTICLE 9	CONDITIONS PRECEDENT TO CLOSING	21
	 	 	 
	ARTICLE 10	BROKERAGE	22
	 	 	 
	ARTICLE 11	POSSESSION	22
	 	 	 
	ARTICLE 12	DEFAULTS AND REMEDIES	22
	 	 	 
	ARTICLE 13	RISK OF LOSS OR CASUALTY	23
	 	 	 
	ARTICLE 14	EMINENT DOMAIN	23
	 	 	 
	ARTICLE 15	MISCELLANEOUS	24
	 	 	 
	ARTICLE 16	OPERATION OF THE PROPERTY	30

  

    	-i-

    	 

    

 

EXHIBITS

 

	A	ENTITY CHART
	 	 
	1.1.12	LIST OF EXCLUDED FIXTURES AND TANGIBLE PERSONAL PROPERTY
	 	 
	1.1.15	LEGAL DESCRIPTION OF LAND
	 	 
	1.1.24	PLANS AND SPECIFICATIONS
	 	 
	3.1.2	FORM OF ESCROW AGREEMENT
	 	 
	5.5	LIST OF MATERIALS
	 	 
	7.2.1.1	AGREEMENT OF ASSIGNMENT AND ASSUMPTION
	 	 
	7.2.1.13	TENANT LETTER
	 	 
	15.22	AUDIT REPRESENTATION LETTER
	 	 
	16.1	RENT CONCESSIONS

 

    	-ii-

    	 

    

 

PURCHASE AND SALE CONTRACT

 

THIS PURCHASE AND
SALE CONTRACT (“Purchase Contract”) is entered into as of June 6, 2013, between and among the parties listed
on Exhibit A attached hereto and made a part hereof, all having a principal address at c/o Davis Development, Inc., 1050
Eagles Landing Parkway, Suite 300, Stockbridge, Georgia 30281 (collectively and individually, “Seller”), MORROW
INVESTORS, INC., a Georgia corporation (“Morrow”), and TRADE STREET OPERATING PARTNERSHIP, LP, a Delaware limited
partnership, having a principal office at 19950 W. Country Club Drive, Suite 801, Aventura, Florida 33180 (“Purchaser”).

 

NOW, THEREFORE WITNESSETH:
That for and in consideration of mutual covenants and agreements herein after set forth, Seller, Morrow, and Purchaser hereby agree
as follows:

 

RECITALS

 

R-1       Seller
is the owner of 100% of the membership interests (together with all rights, privileges and remedies appurtenant thereto, the “Interests”)
of Stacy Road Partners, LLC, a Georgia limited liability company (“Property Owner”), which holds legal title
to the Land described in Section 1.1.15 and the Property described in Section 1.1.24.

 

R-2       Purchaser
desires to purchase and Seller has agreed to sell the Interests and all of the benefits accruing to the owner thereof, including,
but not limited to, Seller’s interest in the Property (as defined in Article 1) on the terms and conditions set forth in
this Purchase Contract (which terms and conditions shall control in the event of any conflict with these Recitals), such that on
the Closing Date the Interest will be conveyed by an Assignment and Assumption of Interests to Purchaser.

 

R-3       Purchaser
has agreed to pay the Purchase Price for the Interests to Seller and Seller has agreed to sell the Interests to Purchaser on the
terms and conditions set forth in this Purchase Contract.

 

R-4       Purchaser
intends to make investigations regarding the Interests and Property and Purchaser’s intended use of the Property, as Purchaser
deems necessary and desirable.

 

ARTICLE 1

DEFINED TERMS

 

1.1         Unless
otherwise defined herein, terms with initial capital letters in this Purchase Contract shall have the meanings set forth in this
ARTICLE 1 below.

 

1.1.1           
“Business Day” means any day other than a Saturday or Sunday or Federal holiday or legal holiday in the State in
which the Land is located.

 

    	-1-

    	 

    

 

1.1.2           “Certificate
of Occupancy” means final permanent certificates of occupancy for the entire Property and all of the Improvements issued
by the City of McKinney, Texas or other applicable governmental authorities having jurisdiction over the Property and the Improvements.

 

1.1.3           “Closing”
means the consummation of the purchase and sale and related transactions contemplated by this Purchase Contract in accordance with
the terms and conditions of this Purchase Contract.

 

1.1.4           “Closing
Date” means twenty (20) days after Seller has delivered to Purchaser the Certificate of Occupancy. In the event Seller
has not delivered to Purchaser copies of permanent Certificate(s) of Occupancy covering all of the apartment units and other buildings
at the Property by January 31, 2014 (the “Outside Date”), all obligations, liabilities and rights of the parties
under this Agreement shall terminate and the Deposit (together with interest thereon) shall be returned to Buyer.

 

1.1.5           “Consultants”
shall have the meaning ascribed in Section 5.1.

 

1.1.6           “Delinquent
Rent” shall have the meaning ascribed in Section 7.1.4.

 

1.1.7           
“Deposit” means the Initial Deposit, Second Deposit and Extension Deposit.

 

1.1.8           “Effective
Date” means the date on which Seller and Purchaser last execute this Purchase Contract.

 

1.1.9           
“Extension Deposit” means the amount of TWO HUNDRED THOUSAND AND NO NO/100 DOLLARS ($200,000.00).

 

1.1.10         “Feasibility
Period” means the period beginning on the Effective Date and ending at 5:00 p.m. prevailing Atlanta, Georgia time forty-five
(45) days after the Effective Date.

 

1.1.11         “Financial
Statements” shall have the meaning ascribed in Section 8.1.1.6.

 

1.1.12         “Fixtures
and Tangible Personal Property” means all fixtures, furniture, furnishings, fittings, equipment, machinery, apparatus,
signage, appliances and other articles of tangible personal property now located on the Land or in the Improvements as of the Effective
Date (or hereafter acquired by Property Owner prior to the Closing Date) and used or usable in connection with any present or future
occupation or operation of all or any part of the Property. The term “Fixtures and Tangible Personal Property” does
not include (i) equipment leased by Property Owner and the interest of Property Owner in any equipment provided to the Property
for use, but not owned or leased by Property Owner, (ii) property owned or leased by any Tenant and guest, employee or other
person furnishing goods or services to the Property, (iii) any software owned by or licensed to Property Owner with respect to
the Property or Property Owner, or (iv) the property and equipment, if any, expressly identified in Exhibit 1.1.12.

 

    	-2-

    	 

    

 

1.1.13         “Improvements”
means all buildings, structures, parking areas, sidewalks, landscaping and improvements located on the Land, including, without
limitation, that certain 334 unit apartment complex known as “The Avenues at Craig Ranch”.

 

1.1.14         “Initial
Deposit” means the amount of TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($200,000.00).

 

1.1.15         “Land”
means all of those certain tracts of land described on Exhibit 1.1.15 attached hereto, and all rights, privileges and
appurtenances pertaining thereto.

 

1.1.16         “Lease(s)”
means all rights and interests of Property Owner in and to all leases, subleases and other occupancy agreements, whether or not
of record, which provide for the use or occupancy of space or facilities on or relating to the Property and which are in force
as of the Effective Date for the Property or thereafter as permitted in ARTICLE 16. Leases shall be reflected on the rent roll
provided to Purchaser pursuant to this Purchase Contract.

 

1.1.17         
“Management Contract” means that certain Management Agreement between Property Owner and Manager pertaining to
the Land and Improvements.

 

1.1.18         “Manager”
means TX-Davis Development, Inc., a Georgia corporation.

 

1.1.19         “Materials”
shall have the meaning ascribed in Section 5.5.

 

1.1.20         “Miscellaneous
Property Assets” means all contract rights, leases, concessions, warranties, licenses, Plans
and Specifications, drawings, franchises, logos, tradenames (including,
without limitation, the name “The Avenues at Craig Ranch”) trademarks, servicemarks,
website domains, telephone numbers and advertising materials and other items of intangible personal property relating to
the ownership or operation of the Property and owned by Property Owner excluding, however, (i) receivables, (ii)
Property Contracts, (iii) the general contractor contract (iv) Leases, (v)  Fixtures and Tangible Personal Property, (vi)
cash or other funds, whether in petty cash or house “banks,” or on deposit in bank accounts or in transit for deposit,
(vii) refunds, rebates or other claims to cash, or any interest thereon, for periods or events occurring prior to the Closing Date,
(viii) utility and similar deposits, (ix) insurance or other prepaid items, (x) any capital replacement, repair or
other reserves held by Property Owner, or any other party on behalf of or for the benefit of Property Owner, with respect to the
Property, (xi) Property Owner’s proprietary books and records, and (xii) the Management Contract, except to the extent
that Property Owner receives a credit on the closing statement for any such item in which event such item shall be transferred
to Purchaser if transferable.

 

1.1.21         “Morrow”
means Morrow Investors, Inc., a Georgia corporation and the sole manager of Property Owner.

 

1.1.22         
“Permits” means all licenses and permits granted by governmental authorities having jurisdiction over the Property
owned by Property Owner and required in order to own and operate the Property.

 

1.1.23         “Permitted
Exceptions” means those exceptions or conditions permitted to encumber or affect the title to the Property in accordance
with the provisions of Section 6.2.

 

    	-3-

    	 

    

 

1.1.24         “Plans
and Specifications” means The construction plans and specifications created in contemplation of the development of the
Property which are described on Exhibit 1.1.24 attached hereto.

 

1.1.25         “Property”
means the Land and Improvements and all rights of Property Owner relating to the Land and the Improvements, including without limitation,
any rights, title and interest of Property Owner, if any, in and to (i) any strips and gores adjacent to the Land and any land
lying in the bed of any street, road, or avenue opened or proposed, in front of or adjoining the Land, to the centerline thereof;
(ii) any unpaid award for any taking by condemnation or any damage to the Property by reason of a change of grade of any street
or highway; (iii) all of the easements, rights, privileges, and appurtenances belonging or in any way appertaining to the Land
and Improvements, together with all Fixtures and Tangible Personal Property, all Property Contracts and Leases, Permits and the
Miscellaneous Property Assets owned by Property Owner which are located on the Property and used in its operation.

 

1.1.26         “Property
Contracts” means all purchase orders, maintenance, service, or utility contracts and similar contracts, excluding Leases,
which relate to the ownership, maintenance, construction or repair and/or operation of the Property and which are not cancelable
on 30 days’ or shorter Notice without penalty, but only to the extent transferable and shall also mean any third party maintenance,
service, marketing or other contract relating to the Property which Property Owner is obligated to cause Property Owner’s
transferee or assign to assume or execute upon Purchaser's purchase of the Property, all as described on Exhibit 1.1.26
attached hereto.

 

1.1.27         “Proration
Period” shall have the meaning ascribed thereto in Section 7.1.3.

 

1.1.28         “Purchase
Contract” means this Purchase and Sale Contract by and between Seller and Purchaser.

 

1.1.29         “Purchase
Price” shall have the meaning ascribed thereto in Section 3.1.

 

1.1.30         “Rents”
shall have the meaning ascribed thereto in section 7.1.2.

 

1.1.31         “Rejected
Contracts” shall have the meaning ascribed in Section 6.5.

 

1.1.32         ”Second
Deposit” means the amount of SIX HUNDRED THOUSAND AND NO/100 DOLLARS ($600,000.00).

 

1.1.33         “Survey”
shall have the meaning ascribed thereto in Section 6.4.

 

1.1.34         “Surviving
Obligations” shall mean Purchaser’s obligations under Sections 5.3, 5.5, 7.1.2, 7.1.3, 7.1.4, 7.1.5, 10.1 and 15.13
and the obligations of Seller and Morrow under Sections 7.1.2, 7.1.3, 7.1.4, 7.1.5, Article 8, Article 15, 14.20, 14.21 and 10.1,
which obligations shall survive Closing or termination of the Purchase Contract as provided herein.

 

1.1.35         “Taxes”
shall have the meaning ascribed in Section 8.2.1.4.

 

    	-4-

    	 

    

 

1.1.36         “Tenant”
means any person or entity entitled to occupy any portion of the Property under a Lease.

 

1.1.37         “Tenant
Deposits” means all security or other deposits and prepaid rents made or to be made pursuant to the Leases.

 

1.1.38         “Title
Commitment” shall have the meaning ascribed thereto in Section 6.1.

 

1.1.39         “Title
Insurer” means Chicago Title Insurance Company.

 

ARTICLE 2

PURCHASE AND SALE OF ENTITY

 

2.1         Seller
agrees to sell and convey the Interests to Purchaser and Purchaser agrees to purchase the Interests from Seller, in accordance
with the terms and conditions set forth in this Purchase Contract.

 

ARTICLE 3

PURCHASE PRICE, DEPOSIT AND ESCROW PROVISIONS

 

3.1         The
total purchase price (“Purchase Price”) for the Interests shall be FORTY-TWO MILLION THREE HUNDRED SEVENTY-FIVE
THOUSAND AND NO/100 DOLLARS ($42,375,000.00), which shall be paid by Purchaser, as follows:

 

3.1.1           On
or before two (2) days after the Effective Date, Purchaser shall deliver to the Title Insurer, as escrow agent, the Initial Deposit
in cash, by wire transfer or certified check. On or before two (2) days after the expiration of the Feasibility Period, Purchaser
shall deliver to the Title Insurer, as escrow agent, the Second Deposit in cash, by wire transfer or certified check. In the event
Purchaser fails to deliver the Initial Deposit or Second Deposit to Title Insurer in accordance with this Section 3.1.1, Seller
shall have the right to terminate the Purchase Contract upon written notice to Purchaser.

 

3.1.2           The
Title Insurer shall hold the Deposit pursuant to the form of Escrow Agreement attached hereto as Exhibit 3.1.2 and make delivery
of the Deposit to the party entitled thereto under the terms thereof. The Title Insurer shall invest the Deposit in an interest-bearing
bank account or money market fund or such investment as Seller and Purchaser shall jointly agree, in writing, with such agreement
being provided to Title Insurer in writing.

 

3.1.3           If
the sale of the Interest is closed by the date fixed therefor, monies held as the Deposit shall be applied to the Purchase Price
on the Closing Date and the balance of the Purchase Price, subject to prorations, adjustments and credits provided for in this
Purchase Contract, shall be paid at Closing to Seller in immediately available United States funds.

 

    	-5-

    	 

    

 

ARTICLE 4

FINANCING

 

4.1         Purchaser
assumes full responsibility to obtain the funds required for settlement, and Purchaser’s acquisition of such funds shall
not be a contingency to the Closing.

 

4.2         All
costs and expenses incurred in connection with any financing of the acquisition of the Property by Purchaser pursuant to this Purchase
Contract shall be solely the responsibility of Purchaser.

 

ARTICLE 5

FEASIBILITY PERIOD

 

5.1         Subject
to the terms of Section 5.3 below, until Closing or termination of this Purchase Contract, Purchaser, and its agents, contractors,
engineers, surveyors, and employees (“Consultants”) shall have the right from time to time to enter onto the
Property to do the following:

 

5.1.1           To
conduct and make any and all customary studies, tests, examinations and inspections, or investigations of or concerning the Property
(including without limitation, engineering and feasibility studies, environmental site assessments, evaluation of drainage and
flood plain, soil tests for bearing capacity and percolation and surveys, including topographical surveys).

 

5.1.2           To
confirm any and all matters which Purchaser may reasonably desire to confirm with respect to the Property and the Interests.

 

5.1.3           To
ascertain and confirm the suitability of the Property for Purchaser’s intended use of the Property.

 

5.1.4           To
review all Materials (other than Seller’s proprietary information).

 

5.2         
Should the results of any of the matters referred to in Section 5.1 above appear unsatisfactory to Purchaser for any reason in
its sole discretion, then Purchaser shall have the right to terminate this Purchase Contract by giving written Notice to that effect
to Seller and the Title Insurer on or before the expiration of the Feasibility Period. If Purchaser exercises such right to terminate,
(a) this Purchase Contract shall terminate and be of no further force and effect, except for the Surviving Obligations,
and (b) upon the request of Seller, Purchaser shall promptly deliver to Seller copies of all or selected reports, tests, analyses,
studies, or surveys prepared by third party Consultants in connection with the Property, and (c) the Initial Deposit will be returned
to Purchaser. If Purchaser fails to provide Seller with written Notice of cancellation on or before the expiration of the Feasibility
Period in strict accordance with the Notice provisions of this Purchase Contract, Purchaser shall deliver the Second Deposit to
Title Insurer and the Deposit will become non-refundable and, except as otherwise expressly contemplated hereby, this Purchase
Contract shall remain in full force and effect, and Purchaser’s obligation to purchase the Property shall be non-contingent
and unconditional except only for satisfaction of the conditions expressly stated in this ARTICLE 5 and in ARTICLES 9, 13 and 14.

 

    	-6-

    	 

    

 

5.3           Purchaser
shall indemnify and hold Seller and Property Owner harmless for any actions taken by Purchaser and its Consultants on the Property.
Purchaser shall indemnify, defend (with attorneys selected by Seller) and hold Seller and Property Owner harmless from any and
all claims, damages, costs and liability which may arise due to such entries, surveys, tests, investigations and the like. Seller
and Property Owner shall have the right, without limitation, to disapprove any and all entries, surveys, tests, investigations
and the like that, in Seller’s reasonable judgment, could result in any injury to the Property or breach of any agreement,
or expose Seller to any liability, costs, liens or violations of applicable law, or otherwise adversely affect the Property or
Seller’s interest therein. Purchaser shall exercise commercially reasonable efforts to minimize disruption to the Tenants
in connection with Purchaser’s or its Consultants’ activities pursuant to this Section. No consent by the Seller to
any such activity shall be deemed to constitute a waiver by Seller or assumption of liability or risk by Seller. Purchaser hereby
agrees to restore the Property to the same condition existing immediately prior to Purchaser’s exercise of its rights pursuant
to this ARTICLE 5 at Purchaser’s sole cost and expense. Notwithstanding anything herein to the contrary, Purchaser shall
have no liability to Seller under this Section 5.3 for pre-existing conditions upon the Property. Purchaser shall maintain commercial
general liability insurance with broad form contractual and personal injury liability endorsements with respect to Purchaser’s
activities on the Property pursuant to this ARTICLE 5, in amounts (including deductible amount of no more than $10,000 per occurrence
and in the aggregate) and with such insurance carriers as shall be reasonably approved by Seller and naming Property Owner as additional
insureds, with endorsements acceptable to Property Owner, including a waiver of defenses of the insurer based on the actions or
inaction of Purchaser (which insurance must be reasonably approved by Property Owner). Such liability insurance shall be on an
occurrence basis and shall provide combined single limit coverage of not less than $2,000,000.00 (per occurrence and in the aggregate)
for bodily injury, death and property damage, by water or otherwise. The provisions of this Section shall survive the Closing or
termination of this Purchase Contract.

 

5.4           Purchaser
shall not permit any mechanic’s or materialman’s liens or any other liens to attach to the Property by reason of the
performance of any work or the purchase of any materials by Purchaser or any other party in connection with any studies or tests
conducted by or for Purchaser. Purchaser shall give Notice to Property Owner a reasonable time prior to entry onto the Property,
shall deliver proof of insurance coverage required above to Property Owner and shall permit Property Owner to have a representative
present during all investigations and inspections conducted on the Property. Purchaser shall take all reasonable actions and implement
all protections necessary to ensure that all actions taken in connection with the investigations and inspections of the Property,
and all equipment, materials and substances generated, used or brought onto the Property pose no material threat to the safety
of persons or the environment and cause no damage to the Property (all such damage to be promptly repaired) or other property of
Property Owner or other persons. All non-public information made available by Property Owner to Purchaser in accordance with this
Purchase Contract or obtained by Purchaser in the course of its investigations shall be treated as confidential information by
Purchaser, and, prior to the purchase of the Property by Purchaser, Purchaser shall use its best efforts to prevent its Consultants,
agents and employees from divulging such information to any unrelated third parties except as reasonably necessary to third parties
engaged by Purchaser for the limited purpose of analyzing and investigating such information for the purpose of evaluating or consummating
the transaction contemplated by this Purchase Contract, including Purchaser’s attorneys and representatives, prospective
lenders and engineers.

 

    	-7-

    	 

    

 

5.5           Seller
and Property Owner shall make available for inspection at the Property (or deliver to Purchaser, as reasonably determined by Purchaser
and Seller) within two (2) calendar days from the Effective Date the materials and information listed on Exhibit 5.5 attached
hereto and made a part hereof (the “Materials”), to the extent in Property Owner’s or Seller’s possession
or control. In no event shall Seller be required to disclose to Purchaser information regarding the partners of Seller, distributions
to partners or other partnership information not relating to the condition or operation of the Property or appraisals or other
valuation information). If the sale of the Property is not closed by the date fixed therefor or if the Purchase Contract is terminated
for any reason, Purchaser shall, within five (5) calendar days, return all such Materials to Seller. The provisions of this Section
shall survive the Closing or termination of this Purchase Contract.

 

5.6           Prior
to expiration of the Feasibility Period, Seller and Purchaser shall agree on a list of Fixtures and Tangible Personal Property.

 

ARTICLE 6

TITLE AND SURVEY

 

6.1           Seller
shall promptly secure a commitment for title insurance for the Property in an amount equal to the Purchase Price (“Title
Commitment”) issued by the Title Insurer for an owner’s title insurance policy on the most recent standard Texas
equivalent American Land Title Association Policy form, together with legible copies of all instruments identified as exceptions
therein and shall cause copies thereof to be delivered to Purchaser on or before three (3) days after the Effective Date.

 

6.2           Purchaser
shall have the right to examine title to the Property and shall notify Seller in writing on or before thirty-five (35) days after
the Effective Date of any objections that Purchaser may have. In addition, if any other title exception or defect not appearing
in the Title Commitment as of the effective date of Purchaser’s first title examination shall be discovered prior to Closing,
Purchaser shall have the right to notify Seller in writing of any objections that Purchaser may have to such additional matters.
If Purchaser shall give Seller notice of objection to any title exceptions or defects not caused by any act or omission of Seller
occurring subsequent to the Contract Date, Seller shall have until expiration of the Feasibility Period within which to cure or
satisfy such objection or to agree in writing to satisfy or cure such objection prior to Closing. If the objections shall not be
satisfied by Seller prior to expiration of the Feasibility Period or by Closing if Seller has agreed in writing to satisfy or cure
such objection prior to Closing, then, at the option of Purchaser, Purchaser shall have the right (a) to terminate this
Agreement or (b) to close the purchase regardless of such title objections without any adjustment in the Purchase Price.
If Seller shall cure or satisfy said objections within the Feasibility Period or shall agree in writing to satisfy or cure such
objection prior to Closing, then this Agreement shall continue in effect. Purchaser shall have the right at any time to waive any
objections that it may have made. If Purchaser does not terminate this Agreement pursuant to this section, then, in such event,
Purchaser shall be deemed conclusively to have waived any objections not cured or satisfied by Seller, and Purchaser shall be obligated
to purchase the Property, regardless of said objections. Purchaser agrees that the following items shall be deemed “Permitted
Exceptions” and Purchaser agrees to accept the Deed and title subject thereto:

 

    	-8-

    	 

    

 

6.2.1           Such
exceptions and matters objected to by Purchaser as provided in Section 6.2 above and for which Seller does not agree, in
writing, to satisfy or cure;

 

6.2.2           Such
exceptions and matters in the Title Commitment not objected to by Purchaser as provided in Section 6.2 above

 

6.2.3           All
Leases and any other occupancy, residency, lease, tenancy and similar agreements entered into in the ordinary course of business,
provided such were disclosed to Purchaser prior to the end of the Feasibility Period in accordance with ARTICLE 16 hereof;

 

6.2.4           Real
estate and property taxes for the calendar year in which closing occurs to the extent not due and payable;

 

6.3         Notwithstanding
anything herein to the contrary, Seller shall be obligated to remove from record (by bonding or otherwise) any of the following
affecting the Property as of the Closing Date: (w) any easements or rights of way with respect to the Property granted by Seller
after the date hereof and any agreements affecting title to the Property entered into by Seller after the date hereof, in either
case, without Purchaser’s prior written approval, which approval shall not be unreasonably withheld or delayed; (x) liquidated
final non-appealable liens or judgments affecting the Property; (y) any mortgage or other security interest entered into by Seller;
or (z) any mechanic’s or materialman’s lien and any judgment docketed against the Property, in any case resulting from
the non-payment by Seller of any sums alleged to be due and owing by Seller to a contractor or materialman (collectively, the “Mandatory
Removal Liens”). The existence of the Mandatory Removal Liens shall not be objections to title, provided that properly
executed instruments in recordable form necessary to satisfy and remove the same of record are delivered to the Purchaser at Closing
or, in the alternative, with respect to any mortgage, deed to secure debt or deed of trust liens, that payoff letters from the
holder of the mortgage, deed to secure debt or deed of trust liens shall have been delivered to and accepted by the Title Insurer
(sufficient to remove the same from the policy issued at Closing), together in either case, with recording and/or filing fees.

 

6.4         Seller,
at Seller’s cost and expense, shall cause to be delivered to Purchaser an ALTA/ACSM as-built survey containing Table A items
1-4, 6(b), 7(a), 7(b)(1), 7(c), 8, 9, 11(a), 13, 14, 16, 18, 19, and 20(a) (“Survey”). Purchaser shall be responsible
for any additional Survey costs due to requests of Purchaser or Purchaser’s lender. Purchaser, at Purchaser’s sole
cost and expense, may cause to be prepared an environmental report for the Property (“Environmental Report”).

 

6.4.1           Should
such Survey disclose conditions that give rise to a title exception (other than a Permitted Exception), then Purchaser shall have
the right to object thereto within the Feasibility Period in accordance with the procedures set forth in ARTICLE 5 and 6 above.

 

    	-9-

    	 

    

 

6.5         
If, (i) as the result of any change or event occurring after the date of the initial Title Commitment, the Escrow Agent issues
any update to the Title Commitment to add or modify requirements or exceptions or to modify the conditions to obtaining any endorsement
requested by Purchaser, or (ii) as the result of any change or event occurring after the date of the Survey, the surveyor modifies
the Survey in any material respect, then Purchaser shall promptly notify Seller of any objections to such revisions, but in no
event later than five (5) business days after Purchaser’s receipt of said update, in which event the same procedures for
response, cure, termination and waiver set forth above, as applicable, shall apply to such new objections.

 

6.6         
Purchaser shall notify Seller on or before the last day of the Feasibility Period of any maintenance, service or similar contract
which relate to the ownership, maintenance, construction or repair and/or operation of the Property and are cancelable on 90 days’
or shorter notice without penalty which Purchaser does not desire to assume (“Rejected Contracts”). Promptly
after it is determined that (a) Purchaser has no title objections, or (b) Purchaser has elected to proceed to Closing, Seller shall
give notice of cancellation to each service provider under the Rejected Contracts. To the extent that as of Closing any of the
Rejected Contracts have not yet terminated (due to less advance notice of cancellation than required thereunder) Purchaser shall
assume the obligations of such Rejected Contract after Closing until the cancellation becomes effective.

 

ARTICLE 7

CLOSING

 

7.1         Dates,
Places Of Closing, Prorations, Delinquent Rent and Closing Costs.

 

7.1.1           The
Closing shall occur no later than 2:00 p.m. prevailing Atlanta local time, on the Closing Date or such earlier date mutually agreed
to by Seller and Purchaser. The Closing shall occur through an escrow with the Title Insurer, whereby the Seller, Purchaser and
their attorneys need not be physically present at the Closing and may deliver documents by overnight air courier or other means.
Notwithstanding the foregoing, Purchaser, at its sole election, shall have the right to adjourn the Closing determined in the preceding
sentence for one (1) period of twenty (20) calendar days. In order to exercise such extension right, on or before five (5) days
prior to the initial Closing Date Purchaser shall (1) deliver written notice to Seller and Title Insurer of Purchaser’s
intent to adjourn the closing together, and (2) deliver the Extension Deposit to Title Insurer which amount shall be added
to, and considered a part of, the Deposit.

 

    	-10-

    	 

    

 

7.1.2           While
the transaction(s) contemplated by this Purchase Contract is (directly) a transfer of the Interest to Purchaser, and only indirectly
a transfer of the Property to Purchaser, the parties agree to prorate the revenue and expenses of the ordinary operation of the
Property as if the Seller was selling the Property as a straight asset sale of the Property to the Purchaser. Thus, all normal
and customarily proratable recurring income and expense items of an asset sale of a improved real property, including, without
limitation, Rents (as defined below), operating expenses, real and personal property taxes, any additional service contracts that
Purchaser elects to assume and other operating expenses and fees of the Property, shall be prorated as of the Closing Date, Seller
being charged or credited, as appropriate, for all of same attributable to the period through and including the day immediately
preceding the Closing Date (and credited for any amounts paid by Seller attributable to the period on and after the Closing Date,
if assumed by Purchaser) and Purchaser being responsible for, and credited or charged, as the case may be, for all of same attributable
to the period on and after the Closing Date. Purchaser shall be given a credit against the Purchase Price for Security Deposits
not applied prior to the Closing Date in accordance with the terms of the Leases. Purchaser shall assume at Closing the obligation
to pay any payments due parties under the Property Contracts assumed by Purchaser, provided all of the foregoing have been prorated.
Any real estate ad valorem or similar taxes for the Property, or any installment of assessments payable in installments which installment
is payable in the calendar year of Closing, shall be prorated to the date of Closing, based upon actual days involved. Seller shall
be responsible for all real estate and personal property taxes and assessments for all years prior to Closing. All real estate
taxes imposed because of a change of use of the Property prior to Closing shall be the responsibility and obligation of Seller.
The proration of real property taxes or installments of assessments shall be based upon the assessed valuation and tax rate figures
for the year in which the Closing occurs to the extent the same are available; provided, that in the event that actual figures
(whether for the assessed value of the Property or for the tax rate) for the year of Closing are not available at the Closing Date,
the proration shall be made using figures from the preceding year. The proration shall be adjusted as provided in Section 7.1.3
hereof. Any special assessment liens encumbering the Property as of the Closing Date which arise from completed improvements located
on the Property as of the Closing Date shall be assumed and paid by Seller. Purchaser shall assume and pay all other special assessment
liens encumbering the Property. For purposes of this Section 7.1.2 and Sections 7.1.3 and 7.1.4 the terms “Rent”
and “Rents” shall include, without limitation, base rents and month to month fees. The provisions of this Section
7.1.2 shall survive Closing and shall expire at the end of the Proration Period (as defined below).

 

7.1.3           If
any of the items subject to proration hereunder cannot be prorated at the Closing because the information necessary to compute
such proration is unavailable, or if any errors or omissions in computing prorations at the Closing are discovered subsequent to
the Closing, then such item shall be reapportioned and such errors and omissions corrected as soon as practicable after the Closing
Date and the proper party reimbursed, which obligation shall survive the Closing for a period (the “Proration Period”)
from the Closing Date until six (6) months after the Closing Date. Neither party hereto shall have the right to require a recomputation
of a Closing proration or a correction of an error or omission in a Closing proration unless within the Proration Period one of
the parties hereto (i) has obtained the previously unavailable information or has discovered the error or omission, and (ii) has
given Notice thereof to the other party together with a copy of its good faith recomputation of the proration and copies of all
substantiating information used in such recomputation. The failure of a party to obtain any previously unavailable information
or discover an error or omission with respect to an item subject to proration hereunder and to give Notice thereof as provided
above within the Proration Period shall be deemed a waiver of its right to cause a recomputation or a correction of an error or
omission with respect to such item after the Closing Date. Any utility or other deposits or infrastructure reimbursements or payments
relating to construction of the Property, but paid after Closing, shall belong to Seller and Purchaser agrees to cooperate with
Seller with respect to any such funds.

 

    	-11-

    	 

    

 

7.1.4           Since
prorations are being made as if the Property was being sold to Purchaser as an asset sale of the Property, if on the Closing Date
any Tenant is in arrears in any Rent payment under any Tenant lease (the “Delinquent Rent”), any Delinquent
Rent received by Purchaser and Property Owner from such Tenant after the Closing shall be applied to amounts due and payable by
such Tenant during the following periods in the following order of priority: (i) first, to the period of time after the Closing
Date, and (ii) second, to the period of time before the Closing Date. If Delinquent Rent or any portion thereof received by
Purchaser after the Closing are due and payable to the Seller by reason of this allocation, the appropriate sum shall be promptly
paid to the Seller. Any monies received by Seller after Closing shall be forwarded to Purchaser for disbursement in accordance
with the order of payment provided herein above. After the Closing, Seller shall continue to have the right, but not the obligation,
in its own name, to demand payment of and to collect Delinquent Rent owed to Seller by any Tenant, which right shall include, without
limitation, the right to continue or commence legal actions or proceedings against any Tenant (provided, that Seller shall
not commence any legal actions or proceedings against any Tenant which continues as a Tenant at the Property after Closing without
the prior consent of Purchaser, which will not be unreasonably withheld or delayed and in any event shall not include an action
to evict such tenant), and the delivery of the General Assignment as described in Section 7.2.1.3 shall not constitute a waiver
by Seller of such right. Purchaser agrees to cooperate with Seller at no cost or liability to Purchaser in connection with all
efforts by Seller to collect such Delinquent Rent and to take all steps, whether before or after the Closing Date, as may be reasonably
necessary to carry out the intention of the foregoing, including, without limitation, the delivery to Seller, within seven (7)
days after a written request, of any relevant books and records (including, without limitation, rent statements, receipted bills
and copies of tenant checks used in payment of such rent), the execution of any and all consents or other documents, and the undertaking
of any act reasonably necessary for the collection of such Delinquent Rent by Seller; provided, however, that Purchaser’s
obligation to cooperate with Seller pursuant to this sentence shall not obligate Purchaser to terminate any Lease with an existing
Tenant or evict any existing Tenant from the Property. The provisions of this Section 7.1.4 shall survive Closing and shall expire
at the end of the Proration Period.

 

7.1.5           Purchaser
shall pay the cost of all transfer, sales, use and excise taxes and recording costs with respect to the Closing. Seller shall pay
the cost of the basic title insurance premium, the non-imputation endorsement, the cost associated with the addition of Table A
item 7(c) to the Survey and one-half (1/2) of the Escrow Fees of Title Insurer. Purchaser shall pay all other of Title Insurer’s
fees and charges. Seller shall pay for (i) all costs (including recording costs) associated with curing any title exceptions and
(ii) all costs (including recording costs) to payoff and release any Mandatory Removal Liens which are not Permitted Exceptions.
All costs and fees other than those allocated in this Purchase Contract shall be paid by Purchaser and/or Seller in accordance
with the custom of the city and state in which the Land is located. Purchaser and Seller shall each pay their own attorney’s
fees associated with the Closing. The provisions of this Section 7.1.5 shall survive Closing and shall expire at the end of the
Proration Period.

 

7.2         Items
To Be Delivered Prior To Or At Closing.

 

7.2.1       Seller.
At Closing, Seller (and, as appropriate, Morrow) shall deliver to Purchaser, each of the following items, fully execut3ed, as applicable:

 

7.2.1.1           An
Agreement of Assignment and Assumption (the "Assignment") in the form set forth on Exhibit 7.2.1.1, attached
hereto and incorporated herein with respect to the Interests. The acceptance of the Assignment at Closing, shall be deemed to be
full performance of, and discharge of, every agreement and obligation on Seller’s part to be performed under this Purchase
Contract, except for the Surviving Obligations.

 

    	-12-

    	 

    

 

7.2.1.2           The
certificate of formation and operating agreement of Property Owner certified as being rue, complete and correct in all respects.

 

7.2.1.3           Proof
that Property Owner and, if applicable, Seller is duly and validly organized and presently existing in good standing under the
laws of its respective formation together with the applicable authority documents, authorizing the sale of the Interests to Purchaser
and the execution, delivery and performance by Seller of this Purchase Contract and each document to be executed and delivered
by Seller in connection with this Purchase Contract and designating one or more officers to execute documents in Seller's name
in connection herewith, certified as correct and complete by Seller, together with an incumbency certificate for each person executing
documents on behalf of Seller.

 

7.2.1.4           All
certificates and assignments evidencing the Interests, if any.

 

7.2.1.5           A
closing statement executed by Seller.

 

7.2.1.6           A
seller’s affidavit in the customary form reasonably acceptable to Seller, executed by Property Owner, to enable Title Insurer
to delete the standard exceptions to the title insurance policy to be issued pursuant to the Title Commitments (other than matters
constituting any Permitted Exceptions) and the promulgated Texas form of non-imputation endorsement.

 

7.2.1.7           A
certification of Seller’s non-foreign status pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended.

 

7.2.1.8           Except
for the items expressly listed herein to be delivered at Closing, delivery of any other required items shall be deemed made by
Seller to Purchaser, if Seller leaves such documents at the Property in their customary place of storage or in the custody of Purchaser’s
representatives.

 

7.2.1.9           To
the extent in Seller’s possession or control, original copies of the Leases and Property Contracts, lease files, keys to
the property, Property Owner’s books and records (other than proprietary information) regarding the Property.

 

7.2.1.10         Evidence
of notice of termination of the Rejected Contracts as required in Section 6.5.

 

7.2.1.11         Proof
that the Management Contract has been terminated and is of no further force or effect.

 

7.2.1.12         An
updated, certified rent roll dated no earlier than three (3) business days prior to the Closing Date.

 

    	-13-

    	 

    

 

7.2.1.13         A
Tenant Letter substantially in the form attached hereto as Exhibit 7.2.1.13.

 

7.2.1.14         All
warranties relating to the construction of the Improvements and any fixtures and equipment installed or located on or at the Property.

 

7.2.1.15         Such
other documents as are reasonably necessary to consummate the transactions herein contemplated in accordance with the terms of
this Purchase Contract.

 

7.2.2       Purchaser.
At Closing, Purchaser shall deliver to the Title Insurer (for disbursement to Seller upon the Closing) the following items with
respect to the Property being conveyed at such Closing:

 

7.2.2.1           
The balance of the Purchase Price as required by ARTICLE 3 hereof plus or minus the adjustments or prorations required by this
Purchase Contract. If at Closing there are any liens or encumbrances on the Property that Seller is obligated or elects to pay
and discharge, Seller may use any portion of the Purchase Price for the Interests to satisfy the same, provided that Seller shall
have delivered to Title Insurer, on such Closing instruments in recordable form sufficient to satisfy such liens and encumbrances
of record (or, as to any mortgages, deeds to secure debt or deeds of trust, appropriate payoff letters, acceptable to the Title
Insurer), together with the cost of recording or filing such instruments. The existence of any such liens or encumbrances shall
not be deemed objections to title if Seller shall comply with the foregoing requirements.

 

7.2.2.2           A
countersigned counterpart of the Assignment.

 

7.2.2.3           A
closing statement executed by Purchaser.

 

7.2.2.4           Such
other documents as are reasonably necessary to consummate the transactions herein contemplated in accordance with the terms of
this Purchase Contract.

 

ARTICLE 8

REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER

 

8.1         Representations
and Warranties of Seller and Morrow.

 

8.1.1       For
the purpose of inducing Purchaser to enter into this Purchase Contract and to consummate the sale and purchase of the Property
in accordance herewith, Seller and Morrow, on a joint and several basis, represents and warrants to Purchaser the following as
of the Effective Date and as of the Closing Date:

 

    	-14-

    	 

    

 

8.1.1.1           Property
Owner is lawfully and duly organized, and in good standing under the laws of the state of Georgia and is authorized to transact
business in the State of Texas. Property Owner has all requisite power and authority to own, operate and lease its property and
to carry on its businesses in Georgia and Texas.

 

8.1.1.2           Property
Owner holds fee simple marketable title to the Property, including all real property contained therein required to be sold to Purchaser,
subject only to the Permitted Exceptions.

 

8.1.1.3           Except
for the Permitted Exceptions and Leases, there are no adverse or other parties in possession of the Property.

 

8.1.1.4           Property
Owner has no judgments outstanding against it. There are no actions, proceedings, litigation
or governmental investigations or condemnation actions either pending or threatened against the Property, as applicable.

 

8.1.1.5           Property
Owner has no knowledge of any claims for labor performed, materials furnished or services rendered in connection with constructing,
improving or repairing any of the Property, as applicable, caused by Property Owner and which remain unpaid beyond the date for
which payment was due and in respect of which liens may or could be filed against any of the Property, as applicable, except for
repairs, materials or services furnished in the ordinary course of business (for which Seller shall make the necessary arrangements
with the Title Insurer such that these matters shall not be title exceptions in the Title Commitment as of Closing).

 

8.1.1.6           The
rent roll and the operating statements, if any (the “Financial Statements”) delivered to Purchaser by Property
Owner in connection with this Purchase Contract are true, complete and correct in all material respects and the rent roll, if any,
contains all of the Leases and tenancies of the Improvements as of the Effective Date, which leases have not been modified or amended
except as indicated on the rent roll (such rent roll to be updated as of Closing so as to be true, complete and correct in all
material respects).

 

8.1.1.7           Property
Owner has made, or will make, available to Purchaser true, correct and complete copies of all Leases (including all modifications
thereof) and all other documents or instruments which create possessory rights in all or any portion of the Improvements. To
the best of Property Owner’s knowledge, Property Owner has
performed all of its material obligations under the Leases.

 

8.1.1.8           Property
Owner and Morrow have not received any notice of any violation, or alleged violation, of any laws, regulations or any other requirements
of any governmental agency or authority having jurisdiction over the Property, to include, without limitation, notice of the violation,
or alleged violation, of any environmental protection laws or regulations.

 

8.1.1.9           As
of Closing, to the best of Property Owner’s knowledge, Property Owner will
have performed all of its material obligations under the Property Contracts and neither Property Owner nor
the other party to any of the Property Contracts will be in default thereunder. 

 

    	-15-

    	 

    

 

8.1.1.10         Seller
and Property Owner are not a "foreign person" but is a "United States person" as such terms are defined in
the Foreign Investment in Real Property Tax Act of 1980 and §§ 1445 and 7701 of the Internal Revenue Code (the “Code”).

 

8.1.2       Except
for the representations and warranties expressly set forth above in Section 8.1.1, the Property is expressly purchased and sold
“AS IS,” “WHERE IS,” and “WITH ALL FAULTS.” The Purchase Price
and the terms and conditions set forth herein are the result of arm’s-length bargaining between entities familiar with transactions
of this kind, and said price, terms and conditions reflect the fact that Purchaser shall have the benefit of, and, except as otherwise
provided in this Purchase Contract, is not relying upon any information provided by Property Owner or statements, representations
or warranties, express or implied, made by or enforceable directly against Seller or Property Owner, including, without limitation,
any relating to the value of the Property, the physical or environmental condition of the Property, any state, federal, county
or local law, ordinance, order or permit; or the suitability, compliance or lack of compliance of the Property with any regulation,
or any other attribute or matter of or relating to the Property (other than any covenants of title contained in the deeds conveying
the Property and the representations set forth above). Except as otherwise expressly provided otherwise in this Purchase Contract,
if Seller or Property Owner provides or has provided any documents, summaries, opinions or work product of consultants, surveyors,
architects, engineers, title companies, governmental authorities or any other person or entity with respect to the Property, Purchaser
and Seller agree that Seller has done so or shall do so only for the convenience of both parties, Purchaser shall not rely thereon
and the reliance by Purchaser upon any such documents, summaries, opinions or work product shall not create or give rise to any
liability of or against Seller, Seller’s partners, members, or affiliates or any of their respective partners, officers,
directors, participants, employees, contractors, attorneys, consultants, representatives, agents, successors, assigns or predecessors-in-interest.
Except for the warranties and representations of Property Owner herein, Purchaser shall rely only upon any title insurance obtained
by Purchaser with respect to title to the Property. Purchaser acknowledges and agrees that no representation has been made and
no responsibility is assumed by Seller with respect to current and future applicable zoning or building code requirements or the
compliance of the Property with any other laws, rules, ordinances or regulations, the financial earning capacity or expense history
of the Property, the continuation of contracts, continued occupancy levels of the Property, or any part thereof, or the continued
occupancy by tenants of any Leases or, without limiting any of the foregoing, occupancy at Closing. Prior to Closing, Seller or
Property Owner shall have the right, but not the obligation, to enforce its rights against any and all Property occupants, guests
or tenants.

 

8.1.3       The
representations and warranties made by the Seller and Morrow in this Section 8.1 shall survive the closing and shall constitute
Surviving Obligations for a period of nine (9) months from the Closing Date.

 

8.1.4       Representations
and warranties above made to the knowledge of Seller or Property Owner shall not be deemed to imply any duty of inquiry. For purposes
of this Purchase Contract, the term Property Owner’s “knowledge” shall mean and refer only to the collective
actual knowledge of the Designated Representative (as hereinafter defined) of the Property Owner. For purposes of this Purchase
Contract, the term Property Owner’s “knowledge” shall not be construed to refer to the knowledge of any
other partner, officer, director, agent, employee or representative of the Property Owner, or any affiliate of the Property Owner,
or to impose upon such Designated Representative any duty to investigate the matter to which such actual knowledge or the absence
thereof pertains, or to impose upon such Designated Representative any individual personal liability. As used herein, the term
Designated Representative shall refer to Lee Little, Regional Manager and Fred Hazel, Vice President.

 

    	-16-

    	 

    

 

8.2         Representations
and Warranties of Seller and Morrow (Interests). 

 

8.2.1       Seller
and Morrow, on a joint and several basis, represent and warrant to Purchaser as follows as of the Effective Date and as of the
Closing Date:

 

8.2.1.1           Seller,
collectively, are the record and beneficial owners and holders of one hundred percent (100%) of the membership interests of Property
Owner. Other than any encumbrances imposed by the operating agreement of the Property Owner (the “Operating Agreement”),
the Interests are owed by Seller free and clear of any and all encumbrances and liens. Other than this Purchase Contract, there
are no presently existing contracts relating to the issuance, sale, or transfer of any membership interest or any other equity
interest of the Property Owner. Other than this Purchase Contract, there exist no outstanding or existing rights, warrants or options
to acquire any of the Interest or other membership or equity interest of the Property Owner. None of the Interests are certificated
and the Property Owner has not elected to opt into Article 8 of the Uniform Commercial Code. Seller has the power and authority
to sell and convey the Interests and to execute the documents to be executed by Seller and the consummation of the transactions
contemplated hereby will not require the consent, approval or authorization of any other party not so received.

 

8.2.1.2           The
Property Owner does not engage, and has never engaged, in any business other than the ownership, maintenance and operation of the
Property and has no direct or indirect ownership interest in any other party and neither owns, leases nor has any tangible property
other than the Property.

 

8.2.1.3           There
are no restrictions on the sale of the Interests to Purchaser, and, on or before the Closing Date, there will be no security agreements,
pledges, options, equities, charges, restrictions, mortgages, judgments, financing statements or other liens or encumbrances against
the Interests. The Interests will be conveyed and assigned by Seller at Closing free and clear of any liens, claims and encumbrances.

 

8.2.1.4           
The Property Owner has filed or caused to be filed (on a timely basis) all tax returns that are or were required to be filed by
or with respect to the Property Owner pursuant to applicable legal requirements. Property Owner (i) has at all times been treated
as partnership for federal income tax purposes, and, (ii) has paid all taxes, fees, charges, levies or other assessments, including,
without limitation, income, gross receipts, excise, real and personal property, sales, transfer, license, payroll and franchise
taxes, and all interest, penalties and additions to tax relating thereto, imposed by any governmental authority (collectively,
"Taxes") and due or assessed against it. No taxing authority has taken a position inconsistent with treatment
as a partnership. None of the Seller, Property Owner nor any other party has taken any action, or failed to take any action, that
would cause the Property Owner to be treated as an association taxable as a corporation for income tax purposes.

 

    	-17-

    	 

    

 

8.2.1.5           
All tax and informational returns filed by, for or in connection with the Property Owner are true, correct, and complete. No deficiencies
for federal, state or other applicable Taxes have been claimed, assessed or, to Seller’s or Morrow’s knowledge, proposed
against the Property Owner by any governmental authority. There are no pending or, to Seller’s and Morrow’s knowledge,
threatened audits, investigations or claims for or relating to any liability in respect of federal, state or other applicable Taxes,
and there are no matters under discussion with any governmental authorities with respect to Federal, state or other applicable
Taxes that could result in an assessment of Federal, state or other applicable Taxes against the Property Owner. Neither Property
Owner, Seller or Morrow has been notified that any taxing authority intends to audit a Federal, state or other applicable tax return
for any other period for the Property Owner.

 

8.2.1.6           
There are no defined benefit plans or defined contribution plans covering any person or employee of the Property Owner including,
but not limited to, 401(k) plans, profit sharing plans, purchase money pension plans. The Property Owner has not put in place and
is not subject to any VEBA, health plan, insurance benefit plan, nonqualified pension plan, mult-employer plan, Title IV plan,
or any plan covered by or subject to ERISA.

 

8.2.1.7           
There is no pending, threatened or unasserted legal or administrative proceeding by or against Property Owner. The Property Owner
has complied with all applicable equal employment, worker compensation and labor laws, statutes, ordinances, rules and regulations.

 

8.2.1.8           
At Closing, the Property Owner shall have paid all social security, withholding, compensation, back pay, workers compensation,
penalties, benefits, and unemployment amounts and taxes with regard to all persons who were employees of the Property Owner.

 

8.2.1.9           Seller
has no knowledge of any violation by Seller, Property Owner or, without any inquiry, by the entity which has held title to the
Property during the five years preceding the Closing Date of (a) the PATRIOT Act, Pub. L. No. 107-56, the Bank Secrecy Act, 31
U.S.C. § 5311 et seq., the Money Laundering Control Act of 1986, and laws relating to the prevention and detection of money
laundering in 18 U.S.C. §§ 1956 and 1957; (b) the Export Administration Act (50 U.S.C. §§ 2401-2420), the International
Emergency Economic Powers Act (50 U.S.C. § 1701, et seq.), the Arms Export Control Act (22 U.S.C. §§ 2778-2994),
the Trading With The Enemy Act (50 U.S.C. app. §§ 1-44), and 13 U.S.C. Chapter 9; (c) the Foreign Asset Control Regulations
contained in 31 C.F.R., Subtitle B, Chapter V; and (d) any other civil or criminal federal or state laws, regulations, or orders
of similar import. Seller is not an entity with whom Purchaser is prohibited from engaging in this transaction due to any
United States government embargos, sanctions, or terrorism or money laundering laws, including, without limitation, due to Seller
or any party that has ownership in or control over Seller (each, a “Seller Party”) being (1) subject to United
States government embargos or sanctions, (2) in violation of terrorism or money laundering laws, or (3) listed on a published United
States government list (e.g., Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets
Control or other lists of similar import).

 

    	-18-

    	 

    

 

8.2.1.10         No
Bankruptcy, insolvency, rearrangement or similar action involving Property Owner or Seller, whether voluntary or involuntary, is
pending or threatened, and neither Property Owner nor Seller has ever:

 

		(i)	filed a voluntary petition in bankruptcy;

 

		(ii)	been adjudicated a bankrupt or insolvent or filed a petition
or action seeking any reorganization, arrangement, recapitalization, readjustment, liquidation, dissolution or similar relief
under any Federal bankruptcy act or any other laws;

 

		(iii)	sought or acquiesced in the appointment of any trustee,
receiver or liquidator of all or any substantial part of its properties, the Land and Improvements, personal property or any portion
thereof, or

 

		(iv)	made an assignment for the benefit of creditors or admitted
in writing its inability to pay its debts generally as the same become due.

 

8.2.2        Except
for the representations and warranties expressly set forth above in Section 8.2.1, the Interest is expressly purchased and sold
“AS IS,” “WHERE IS,” and “WITH ALL FAULTS.” The Purchase Price
and the terms and conditions set forth herein are the result of arm’s-length bargaining between entities familiar with transactions
of this kind, and said price, terms and conditions reflect the fact that Purchaser shall have the benefit of, and, except as otherwise
provided in this Purchase Contract, is not relying upon any information provided by Property Owner or statements, representations
or warranties, express or implied, made by or enforceable directly against Seller or Morrow, including, without limitation, any
relating to the value of the Property, the physical or environmental condition of the Property, any state, federal, county or local
law, ordinance, order or permit; or the suitability, compliance or lack of compliance of the Property with any regulation, or any
other attribute or matter of or relating to the Property (other than any covenants of title contained in the deeds conveying the
Property and the representations set forth above). Except as otherwise expressly provided otherwise in this Purchase Contract,
if Morrow, Seller or Property Owner provides or has provided any documents, summaries, opinions or work product of consultants,
surveyors, architects, engineers, title companies, governmental authorities or any other person or entity with respect to the Property,
Purchaser and Seller agree that Morrow, Seller or Property Owner has done so or shall do so only for the convenience of both parties,
Purchaser shall not rely thereon and the reliance by Purchaser upon any such documents, summaries, opinions or work product shall
not create or give rise to any liability of or against Seller or Morrow, Seller’s partners, members, or affiliates or any
of their respective partners, officers, directors, participants, employees, contractors, attorneys, consultants, representatives,
agents, successors, assigns or predecessors-in-interest. Except for the warranties and representations of Seller in this Purchase
Contract, Purchaser shall rely only upon any title insurance obtained by Purchaser with respect to title to the Property. Except
as otherwise expressly provided otherwise in this Purchase Contract, Purchaser acknowledges and agrees that no representation has
been made and no responsibility is assumed by Seller with respect to current and future applicable zoning or building code requirements
or the compliance of the Property with any other laws, rules, ordinances or regulations, the financial earning capacity of the
Property Owner, the continuation of contracts, continued occupancy levels of the Property, or any part thereof, or the continued
occupancy by tenants of any Leases or, without limiting any of the foregoing, occupancy at Closing. Prior to Closing, Seller or
Property Owner shall have the right, but not the obligation, to enforce its rights against any and all Property occupants, guests
or tenants.

 

    	-19-

    	 

    

  

8.2.3       The
representations and warranties made by the Seller and Morrow in this Section 8.2 shall survive the Closing and shall constitute
Surviving Obligations for a period of three (3) years from the Closing Date. Any claim brought for a breach of this Section 8.2
must be brought within three (3) years of the Closing Date for the Seller to have liability.

 

		8.3	Representations and Warranties of Purchaser

 

8.3.1       For
the purpose of inducing Seller to enter into this Purchase Contract and to consummate the sale and purchase of the Property in
accordance herewith, Purchaser represents and warrants to Seller the following as of the Effective Date and as of the Closing Date:

 

8.3.2       With
respect to Purchaser and its business, Purchaser represents and warrants, in particular, that:

 

8.3.2.1           
Purchaser is a limited partnership duly organized, validly existing and in good standing under the laws of Delaware. Purchaser
is sophisticated and experienced in the acquisition, ownership, and operation of multi-family housing projects similar to the Property,
and has full knowledge of all applicable federal, state and local laws, rules, regulations, and ordinances in connection therewith.

 

8.3.2.2           
Purchaser, acting through any of its or their duly empowered and authorized officers, joint venturers, partners, managers, or members,
has all necessary power and authority to own and use its properties and to transact the business in which it is engaged, and has
full power and authority to enter into this Purchase Contract and to perform its obligations hereunder; and no consent of any of
Purchaser’s officers, joint venturers, partners, managers, or members are required to so empower or authorize Purchaser to
enter into this Purchase Contract. Prior to Closing, Purchaser shall have all necessary power and authority to execute and deliver
the documents and instruments required of Purchaser at Closing.

 

8.3.2.3           
No pending or, to the knowledge of Purchaser, threatened litigation exists which if determined adversely would restrain the consummation
of the transactions contemplated by this Purchase Contract or would declare illegal, invalid or non-binding any of Purchaser’s
obligations or covenants to Seller.

 

8.3.2.4           
Purchaser is duly authorized to execute and deliver, acting through its duly empowered and authorized officers, joint venturers,
partners, managers, and members, respectively, and perform this Purchase Contract, and such execution, delivery and performance
by Purchaser does not (i) violate any of the provisions of their respective articles of incorporation or organization, operating
agreements, partnership agreements or bylaws, (ii) violate any provision of any law, governmental rule or regulation currently
in effect, (iii) violate any judgment, decree, writ, injunction, award, determination or order currently in effect that names or
is specifically directed at Purchaser or its property, and (iv) require the consent, approval, order or authorization of, or any
filing with or notice to, any court or other governmental authority.

 

    	-20-

    	 

    

 

8.3.2.5           The
joinder of no person or entity other than Purchaser is necessary to consummate the transactions to be performed by Purchaser and
Purchaser has all necessary right and authority to perform such acts as are required and contemplated by this Purchase Contract.

 

ARTICLE 9

CONDITIONS PRECEDENT TO CLOSING

 

9.1           Purchaser’s
obligation to close under this Purchase Contract shall be subject to and conditioned upon the fulfillment in all material respects
of each and all of the following conditions precedent:

 

9.1.1       All
of the documents required to be delivered by Seller to Purchaser at the Closing pursuant to the terms and conditions hereof shall
have been delivered and shall be in form and substance required by this Purchase Contract.

 

9.1.2       Seller’s
representations and warranties set forth in this Purchase Contract shall have been true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing Date and as of the Effective Date as though such representations
and warranties were made at and as of such date and time.

 

9.1.3       Seller
shall have complied with, fulfilled and performed, in each case in all material respects, each of the covenants, terms and conditions
to be complied with, fulfilled or performed by Seller hereunder.

 

9.1.4       There
shall not be pending or, to the knowledge of either Purchaser or Seller, any litigation or threatened litigation which, if determined
adversely, would restrain the consummation of any of the transactions contemplated by this Purchase Contract or declare illegal,
invalid or nonbinding any of the covenants or obligations of the Purchaser

 

9.2           Without
limiting any of the rights of Seller elsewhere provided for in this Purchase Contract, Seller’s obligation to close with
respect to conveyance of the Property under this Purchase Contract shall be subject to and conditioned upon the fulfillment of
each and all of the following conditions precedent:

 

9.2.1       Purchaser’s
representations and warranties set forth in this Purchase Contract shall have been true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing Date and as of the Effective Date as though such representations
and warranties were made at and as of such date and time.

 

9.2.2       Purchaser
shall have complied with, fulfilled and performed, in each case in all material respects, each of the covenants, terms and conditions
to be complied with, fulfilled or performed by Purchaser hereunder.

 

    	-21-

    	 

    

 

ARTICLE 10

BROKERAGE

 

10.1         Except
for Engler Financial Group, LLC (“Broker”), Seller and Purchaser each represents and warrants to the other that it
has not dealt with or utilized the services of any other real estate broker, sales person or finder in connection with this Purchase
Contract, and each party agrees to indemnify the other party from and against all claims for brokerage commissions and finder’s
fees arising from or attributable to the acts of omissions of the indemnifying party. The provisions of this Section shall survive
the Closing or termination of this Purchase Contract.

 

10.2         Seller
agrees to pay Broker a commission according to the terms of a separate agreement. Broker shall not be deemed a party or third party
beneficiary of this Purchase Contract.

 

ARTICLE 11

POSSESSION

 

11.1         Possession
of the Property subject to the Permitted Exceptions and the Leases shall be delivered to Purchaser at the Closing.

 

ARTICLE 12

DEFAULTS AND REMEDIES

 

12.1         If
Purchaser has not delivered its Notice as provided in Section 5.2 on or before the expiration of the Feasibility Period, and Purchaser
subsequently terminates this Purchase Contract (for any reason other than a Seller default hereunder) or Purchaser materially defaults
hereunder on or prior to the Closing Date not cured by the Closing Date and consummation of the Closing does not occur by reason
of such termination or material default by Purchaser, Seller and Purchaser agree that it would be impractical and extremely difficult
to estimate the damages which Seller may suffer. Therefore, Seller and Purchaser hereby agree that, except for the Purchaser’s
obligations to Seller under Section 5.3, the reasonable estimate of the total net detriment that Seller would suffer in the event
that Purchaser terminates this Purchase Contract or materially defaults hereunder on or prior to the Closing Date is and shall
be, and Seller’s sole remedy (whether at law or in equity) shall be, the right to receive from the Title Insurer and retain
the full amount of the Deposit. The payment and performance of the above as liquidated damages is not intended as a forfeiture
or penalty within the meaning of applicable law and is intended to settle all issues and questions about the amount of damages
suffered by Seller in the applicable event, except only for damages under Purchaser’s Surviving Obligations, irrespective
of the time when the inquiry about such damages may take place. Upon any such failure by Purchaser hereunder, this Purchase Contract
shall be terminated, and neither party shall have any further rights or obligations hereunder, each to the other, except for the
Purchaser’s obligations to Seller under Purchaser’s Surviving Obligations, and the right of Seller to collect such
liquidated damages to the extent not theretofore paid by Purchaser.

 

    	-22-

    	 

    

 

12.2         Provided
that Purchaser has not terminated this Purchase Contract and is not otherwise in material default hereunder, if the Closing does
not occur as a result of Seller’s material default hereunder, Purchaser’s sole remedy shall be (i) to elect to terminate
this Purchase Contract and receive reimbursement of the Deposit and be paid by Seller Purchaser’s actual and verifiable out-of-pocket
third party costs relating directly to this transaction in an amount not to exceed $50,000.00 plus the sum of any non-refundable
commitment or rate lock fee paid by Buyer in connection with its financing of the Property, not to exceed Six Hundred Thousand
and 00/100 ($600,000.00) of the Purchase Price or (ii) to seek specific performance of this Purchase Contract.

 

ARTICLE 13

RISK OF LOSS OR CASUALTY

 

13.1         The
risk of loss of damage to the Property by reason of any insured or uninsured casualty during the period through and including the
Closing Date shall be borne by Seller. Seller and Property Owner covenant and agree to maintain all of its existing insurance coverage
upon the Property in full force and effect until the Closing Date, without material modification thereto. In the event of any “material
damage,” as hereinafter defined, to or destruction of the Property or any portion thereof, Purchaser may, at its option,
by Notice given to Seller within ten (10) days after Purchaser is notified of such material damage or destruction: (i) unilaterally
terminate this Purchase Contract except the Surviving Obligations shall survive and the Deposit shall be immediately returned to
Purchaser; or (ii) proceed under this Purchase Contract with no reduction in the Purchase Price, receive any insurance proceeds
due Seller or Property Owner as a result of such damage or destruction (including any rent loss insurance applicable to the period
from and after the Closing Date), together with the amount of any deductible with respect to such insurance proceeds, and assume
responsibility for repair of the Property. If the Property is not materially damaged, then Purchaser shall not have the right to
terminate this Purchase Contract, but all insurance proceeds (including any rent loss insurance applicable to the period from and
after the Closing Date), together with the amount of any deductible with respect to such insurance proceeds, shall be paid or assigned
to Purchaser and Purchaser shall assume responsibility for such repair. For purposes of this paragraph, “material damage”
means damages reasonably estimated to exceed $250,000.00 to repair, as determined by an independent insurance claims adjuster doing
business in the county in which the Land is located, which claims adjuster shall be reasonably satisfactory to Seller and Purchaser.

 

ARTICLE 14

EMINENT DOMAIN

 

14.1         In
the event that at the time of Closing all or any part of the Property is (or has previously been) acquired, or is about to be acquired,
by authority of any governmental agency (or in the event that at such time there is any notice of any such acquisition or intent
to acquire by any such governmental agency), Purchaser shall have the right, at Purchaser’s option, to terminate this Purchase
Contract (except the Surviving Obligations shall survive) by giving written Notice within fifteen (15) days of Purchaser’s
receipt from Seller of written Notice of the occurrence of such event and recover the Deposit hereunder, or to settle in accordance
with the terms of this Purchase Contract for the full Purchase Price and receive the full benefit or any condemnation award. It
is expressly agreed between the parties hereto that this paragraph shall in no way apply to customary dedications for public purposes
that may be necessary for the development of the Property.

 

    	-23-

    	 

    

 

ARTICLE 15

MISCELLANEOUS

 

		15.1	Exhibits and Riders

 

All Exhibits and Riders
annexed hereto are a part of this Purchase Contract for all purposes. In the event any Riders are annexed hereto and there are
any conflicts between the terms of this Purchase Contract and the Riders, the terms of the Riders shall supercede and control.

 

		15.2	Assignability

 

Subject to Section 15.19,
except for an assignment to a wholly owned subsidiary of Purchaser or to a single purpose entity formed and controlled by one or
more affiliates of Purchaser, in which event, the consent of Seller shall not be required provided Purchaser promptly notifies
Seller of such assignment this Purchase Contract is not assignable by any party hereto without first obtaining the prior written
approval of the non-assigning party. If Seller permits Purchaser to assign this Purchase Contract or if Purchaser assigns this
Purchase Contract to a wholly owned subsidiary of Purchaser or to a single purpose entity formed and controlled by one or more
affiliates of Purchaser in accordance with the terms of this Section 15.2, Purchaser shall not be relieved of any liability
hereunder.

 

		15.3	Binding Effect

 

This Purchase Contract
shall be binding upon and inure to the benefit of Seller and Purchaser, and their respective heirs, personal representatives, successors
and permitted assigns.

 

		15.4	Captions

 

The captions, headings,
and arrangements used in this Purchase Contract are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.

 

		15.5	Number and Gender of Words

 

Whenever herein the singular
number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where
appropriate.

 

		15.6	Notices

 

All notices, demands,
requests and other communications required pursuant to the provisions of this Purchase Contract (“Notice”) shall
be in writing and shall be deemed to have been properly given or served for all purposes (i) if sent by Federal Express or any
other nationally recognized overnight carrier for next business day delivery, on the first business day following deposit of such
Notice with such carrier, (ii) if personally delivered, on the actual date of delivery, (iii) if sent by certified mail, return
receipt requested postage prepaid, on the fifth (5th) business day following the date of mailing, or (iv) if sent by facsimile
or electronic mail, on the date of delivery provided the sender maintain a copy of evidence of successful transmission and also
delivers the Notice via overnight delivery addressed as follows:

 

    	-24-

    	 

    

 

	If to Seller:
	 
	c/o Davis Development
	1050 Eagles Landing Parkway, Suite 300
	Stockbridge, Georgia 30281
	Telephone (770) 474-4345
	Facsimile (770) 474-5213
	Email: fred@davisdevga.com
	Attention: Fred S. Hazel
	 
	With a copy to:
	 
	Davis Development
	1050 Eagles Landing Parkway, Suite 300
	Stockbridge, Georgia 30281
	Telephone (770) 474-4345
	Facsimile (770) 474-5213
	Email: lance@davisdevga.com
	Attention: Lance A. Chernow
	 
	If to Purchaser:
	 
	Trade Street Operating Partnership, LP
	 19950 W. Country Club Drive
	Suite 801
	Aventura. Florida 33180
	Telephone (786) 248-6050
	Facsimile (786) 248-3679
	Email: GBaumann@Trade-Street.com
	Attention: Greg Baumann
	 
	With a copy to:
	 
	Bass, Berry & Sims, PLC
	100 Peabody Place, Suite 900
	Memphis, TN 38103
	Telephone  (901) 543-5943
	Facsimile  (901) 543-5999
	Email guhlhorn@bassberry.com
	Attention:  T. Gaillard Uhlhorn

 

    	-25-

    	 

    

 

Any of the parties
may designate a change of address by Notice in writing to the other parties. Whenever in this Purchase Contract the giving of Notice
by mail or otherwise is required, the giving of such Notice may be waived in writing by the person or persons entitled to receive
such Notice.

 

		15.7	Governing Law And Venue

 

The laws of the state
in which the Land is situated shall govern the validity, construction, enforcement, and interpretation of this Purchase Contract,
unless otherwise specified herein except for the conflict of law provisions thereof. All claims, disputes and other matters in
question arising out of or relating to this Purchase Contract, or the breach thereof, shall be decided by proceedings instituted
and litigated in a court for the district in which the Land is situated, and the parties hereto expressly consent to the venue
and jurisdiction of such court.

 

		15.8	Entirety And Amendments; Survival

 

This Purchase Contract
embodies the entire Purchase Contract between the parties and supersedes all prior purchase contracts and understandings, if any,
relating to the Property, and may be amended or supplemented only by an instrument in writing executed by the party against whom
enforcement is sought. All terms and provisions of this Purchase Contract shall be merged into the Closing documents and shall
not survive Closing, unless expressly set forth to the contrary in this Purchase Contract.

 

		15.9	Severability

 

If any provision of this
Purchase Contract is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully
severable. The Purchase Contract shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Purchase Contract; and the remaining provisions of this Purchase Contract shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Purchase Contract.
In lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Purchase Contract
a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible to make such provision
legal, valid, and enforceable.

 

		15.10	Multiple Counterparts

 

This Purchase Contract
may be executed in a number of identical counterparts. If so executed, each of such counterparts is to be deemed an original for
all purposes and all such counterparts shall, collectively, constitute one Purchase Contract. In making proof of this Purchase
Contract, it shall not be necessary to produce or account for more than one such counterparts.

 

    	-26-

    	 

    

 

		15.11	Further Acts

 

In addition to the acts
and deeds recited herein and contemplated and performed, executed and/or delivered by Seller and Purchaser, Seller and Purchaser
agree to perform, execute and/or deliver or cause to be performed, executed and/or delivered any and all such further acts, deeds,
and assurances as may be necessary to, and to use their respective best efforts to consummate the transactions contemplated hereby.

 

		15.12	Construction

 

No provision of this
Purchase Contract shall be construed in favor of, or against, any particular party by reason of any presumption with respect to
the drafting of this Purchase Contract; both parties, being represented by counsel, having fully participated in the negotiation
of this instrument.

 

		15.13	Confidentiality

 

Purchaser, Seller and
their respective agents shall not disclose the terms and conditions contained in this Purchase Contract and shall keep the same
confidential; provided, however, that notwithstanding the foregoing, Purchaser may disclose the terms and conditions of this Purchase
Contract (i) as required by law, (ii) to undertake its due diligence hereunder and to consummate the transactions contemplated
by this Purchase Contract or any financing relating thereto, or (iii) to Purchaser’s or Seller’s lenders, attorneys
and accountants. Neither party hereto shall make any public statements or announcements, or issue any press releases, relating
to the transactions contemplated hereby without the prior approval of the other party hereto (unless such statement, announcement,
or press release is required by any applicable securities law or any rule or regulation of the New York Stock Exchange, in which
case such prior approval is not required). Any information provided by Seller to Purchaser under the terms of this Purchase Contract
is for informational purposes only. In providing such information to Purchaser, except as set forth herein, Seller makes
no representation or warranty, express, written, oral, statutory, or implied, and all such representations and warranties are hereby
expressly excluded. Except as set forth herein, Purchaser shall not in any way be entitled to rely upon the accuracy of such information.
Such information is also confidential and, except as set forth herein, Purchaser shall be prohibited from making such information
public to any other person or entity other than its agents and legal representatives, without Seller’s prior written authorization,
which may be granted or denied in Seller’s sole discretion. The provisions of this Section shall survive the Closing or termination
of this Purchase Contract.

 

		15.14	Non-Solicitation of Employees

 

Purchaser acknowledges
and agrees that, without the express written consent of Seller, neither Purchaser nor any of Purchaser’s employees, affiliates
or agents shall solicit or contact any of Proeprty Owner’s employees for potential employment, other than employees located
at the Property for potential employment at the Property following Closing.

 

    	-27-

    	 

    

 

		15.15	Time Of The Essence

 

It is expressly agreed
by the parties hereto that time is of the essence with respect to this Purchase Contract.

 

		15.16	Cumulative Remedies And Waiver

 

Except as expressly provided
otherwise in this Purchase Contract, no remedy herein conferred or reserved is intended to be exclusive of any other available
remedy or remedies herein conferred or referred, but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Purchase Contract. No delay or omission to exercise any right or power accruing upon any default,
omission, or failure of performance hereunder shall impair any right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may be deemed expedient. No waiver, amendment, release,
or modification of this Purchase Contract shall be established by conduct, custom, or course of dealing.

 

		15.17	Litigation Expenses

 

In the event either party
hereto commences litigation against the other to enforce its rights hereunder, the prevailing party in such litigation shall be
entitled to recover from the other party its reasonable attorneys’ fees and expenses incidental to such litigation.

 

		15.18	Time Periods

 

Should the last day of
a time period fall on a weekend or legal holiday, the next Business Day thereafter shall be considered the end of the time period.

 

		15.19	Exchange

 

Either party may consummate
the purchase or sale (as applicable) of the Property as part of a so-called like kind exchange (an “Exchange”)
pursuant to § 1031 of the Code, provided that: (a) the Closing shall not be delayed or affected by reason of the Exchange
nor shall the consummation or accomplishment of an Exchange be a condition precedent or condition subsequent to the exchanging
party’s obligations under this Agreement, (b) the exchanging party shall effect its Exchange through an assignment of this
Agreement, or its rights under this Agreement, to a qualified intermediary, (c) neither party shall be required to take an assignment
of the purchase agreement for the relinquished or replacement property or be required to acquire or hold title to any real property
for purposes of consummating an Exchange desired by the other party; and (d) the exchanging party shall pay any additional costs
that would not otherwise have been incurred by the non-exchanging party had the exchanging party not consummated the transaction
through an Exchange. Neither party shall by this Agreement or acquiescence to an Exchange desired by the other party have its rights
under this Agreement affected or diminished in any manner or be responsible for compliance with or be deemed to have warranted
to the exchanging party that its Exchange in fact complies with § 1031 of the Code.

 

    	-28-

    	 

    

 

		15.20	Liability of Individuals

 

Purchaser acknowledges
that, except as otherwise provided in this Section 15.20, Beaver Creek Trust, Fred S. Hazel, Lance A. Chernow, Keli J. Hazel, Jeffrey
S. Greene, Stephen Michael Davis and Blake Miguel Davis Trust (the “Exempt Parties”) shall have no personal
liability under this Purchase Contract or any document executed in connection with the transactions contemplated by this Purchase
Contract. The Exempt Parties shall have personal liability for the representations and warranties contained in Section 8.2.1 to
the extent that such representations and warranties survive the Closing. Except for the specific obligation to assign the Interests,
Purchaser agrees that any and all claims relating to this Purchase Contract shall be brought against Morrow Investors, Inc. and
not the Exempt Parties.

 

		15.21	Net Worth Requirement

 

Morrow Investors, Inc.
hereby represents and warrants to Purchaser that it has, and for a period of three (3) years after the Closing it shall maintain,
a net worth of at least Eight Million ($8,000,000) Dollars.

 

		15.22	Rule 3.14 Audit

 

Until Closing and for
a period of one year following the Closing Date, Seller agrees to provide to Purchaser and Purchaser’s accountants existing
non-confidential and non-proprietary accounting and financial materials relating solely to Seller’s operation of the Property
(including, without limitation, bank statements, rent rolls and property-level accounting records) reasonably requested by Purchaser
for the purpose of preparing a property-level P&L audit; provided, that Seller shall not be required to prepare or compile
any materials nor shall Seller be required to incur any third party costs or expenses in connection therewith nor shall Seller
be required to make any representations or warranties with respect to such information beyond representation letter substantially
in the form of on Exhibit 15.22 attached hereto. Buyer acknowledges and agrees that the foregoing accounting and financial materials
to be provided by Seller does not include any information or materials relating to the acquisition of the Real Property by Seller
or the construction of the Improvements by Seller and is to be limited solely to information regarding the Property after it was
placed into operation.

 

		15.23	Tax Matters

 

(a)          Preparation
of Tax Returns Due After Closing Date. Sellers shall cause a short-year interim tax return (and accompanying K-1s) to be prepared
and filed as soon as practicable after the Closing Date reflecting the Property Owner’s current fiscal year operations to
and including the Closing Date. Sellers shall be responsible for the Property Owner’s tax obligations set forth on such short-year
interim tax return. Purchaser shall prepare or cause the Company to prepare any tax return relating to the Property Owner’s
for any taxable period ending after the Closing Date.

 

    	-29-

    	 

    

 

(b)           Cooperation
and Exchange of Information. Sellers and Purchaser will provide each other with such cooperation and information as either
of them reasonably may request of the other in filing any tax return, amended return or claim for refund, determining a liability
for Taxes or a right to a refund of Taxes or participating in or conducting any audit or other proceeding in respect of Taxes.
Such cooperation and information shall include providing copies of relevant tax returns or portions thereof, together with accompanying
schedules and related work papers and documents relating to rulings or other determinations by tax authorities. Each party shall
make its employees available on a mutually convenient basis to provide explanations of any documents or information provided hereunder.
The Property Owner will retain all returns, schedules and work papers and all material records or other documents relating to Tax
matters of the Property Owner for the taxable period first ending after the Closing Date and for all prior taxable periods until
the later of (i) the expiration of the statute of limitations of the taxable periods to which such returns and other documents
relate, without regard to extensions except to the extent notified by the other party in writing of such extensions for the respective
tax periods, or (ii) eight years following the due date (without extension) for such returns. Any information obtained under this
Section 15.23 shall be kept confidential, except as may be otherwise necessary in connection with the filing of returns
or claims for refund or in conducting an audit or other proceeding.

 

ARTICLE 16

OPERATION OF THE PROPERTY

 

16.1         After
the Effective Date, Seller and Morrow covenant that (a) Property Owner shall only enter into new Leases or renew existing
Leases provided that same are made at arm’s length, at the rents and with no concessions other than as set forth on Exhibit
16.1, for a term of not more than thirteen (13) months and in accordance with Property Owner’s customary leasing procedures.
(b) shall only modify, terminate (upon a tenant default) or accept the surrender or forfeiture of any of the Leases in the
ordinary course of business and (c) shall not modify any of the Property Contracts without first obtaining the written consent
of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed.

 

16.2         Except
as specifically set forth in this ARTICLE 16, Morrow and Seller shall cause the Property Owner to operate the Property after the
Effective Date in the ordinary course of business and shall maintain the Improvements in their condition as of the Effective Date,
ordinary wear and tear excluded, and except as necessary in the Seller’s or Morrow’s sole discretion to address any
life or safety issue at the Property, Seller and Morrow covenant that Property Owner will not make any material alterations to
the Property or remove any of the Fixtures and Tangible Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed. Seller and Morrow shall cause the Property Owner to comply with
or cure all notices of violation of present and hereafter issued all applicable federal, state, municipal and other governmental
laws, ordinances, requirements, rules, regulations, notices and orders, and all agreements, covenants, conditions, easements and
restrictions relating to the Property. Morrow and Seller shall cause the Property Owner not sell, further pledge, encumber or otherwise
transfer or dispose of all or any part of any Property (except for such items of Fixtures and Tangible Personal Property as become
obsolete or are disposed of in the ordinary course and only if replaced by an item of like quality and functionally unless same
is no longer necessary for the operation of the Property). Morrow and Seller shall cause the Property Owner not to initiate, consent
to, approve or otherwise take any action with respect to zoning or any other governmental rules or regulations presently applicable
to all or any portion of the Property.

 

    	-30-

    	 

    

 

16.3         Any
new Property Contract entered into after the date hereof shall be subject to the covenants, representations and warranties set
forth in this Purchase Contract and applicable to Property Contracts.

 

16.4         Morrow
and Seller shall cause the Property Owner to maintain in full force and effect property insurance on the Property, which insurance
provides for casualty insurance covering the full replacement value of the Property.

 

16.5         Seller
shall maintain in full force and effect property insurance on the Property, which insurance provides for casualty insurance covering
the full replacement value of the Property. On the Closing Date, all vacant units within the Property shall be in “rent ready
condition,” except those units which were occupied and which became vacant within five (5) Business Days prior to the Closing
Date. With respect to any such units becoming vacant within the five (5) Business Day period prior to the Closing Date that are
not “rent-ready” on the Closing date, Seller shall provide Purchaser with a credit against the Purchase Price at Closing
of Eight Hundred and 00/100 ($800.00) Dollars per unit. The term “rent-ready condition” shall mean: interior carpets
have been cleaned or replaced as necessary, freshly painted interior walls, working kitchen appliances (and water heaters and HVAC
to the extent such items serve only the individual vacant unit(s)), and no material damage to the doors, walls, ceilings, floors
or windows inside such vacant units.

 

16.6         Seller
shall complete construction of the Improvements in a good, workmanlike and timely manner, in substantial conformance with the Plans
and Specifications. The Plans and Specifications shall not be modified or amended without the prior written approval of
Purchaser.

 

[THE REMAINDER OF THIS PAGE WAS INTENTIONALLY
LEFT

BLANK. SIGNATURES BEGIN ON THE FOLLOWING
PAGE.]

 

    	-31-

    	 

    

 

NOW WHEREFORE, the
parties hereto have caused this Purchase Contract to be executed and delivered as of the date first set forth above.

 

		Property Owner:
	 	 
	Date of Execution:	STACY ROAD PARTNERS, LLC, a
		Georgia limited liability company
	June 3, 2013	 
	 	By:	Morrow Investors, Inc., a Georgia
	 	 	corporation, Its Manager
	 	 
	 		By:	/s/ Fred S. Hazel
	 	 	 	Fred S. Hazel, Vice President

 

[SIGNATURES CONTINUED
ON NEXT PAGE]

 

    	-32-

    	 

    

 

		Morrow:
	 	 
	Date of Execution:	MORROW INVESTORS, INC., a
	 	Georgia Corporation
	June 3, 2013	 
	 	By:	/s/ Fred S. Hazel
	 	 	Fred S. Hazel, Vice President

 

[SIGNATURES CONTINUED
ON NEXT PAGE]

 

    	-33-

    	 

    

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE.]

 

		Seller
	Date of Execution:	 
	 	BEAVER CREEK TRUST
	 	 	 
	June 3, 2013	By:	Briarcliff Management, LLC, a
	 	 	Nevada limited liability company, Trustee
	 	 	 
	 	 	By: 	/s/ Fred S. Hazel
	 	 	 	Fred S. Hazel, Co-Managing Member
	 	 	 
	 	 	By: 	/s/ Stephen Michael Davis
	 	 	 	Stephen Michael Davis, Co-Managing
    Member
	 	 	 
	 	 	By: 	/s/ David A. Deeter
	 	 	 	David A. Deeter, Co-Managing Member
	 	 	 
	June 3, 2013	 	/s/ Fred S. Hazel
	 	 	Fred S. Hazel
	 	 	 
	June 3, 2013	 	/s/ Lance A. Chernow
	 	 	Lance A. Chernow
	 	 	 
	June 3, 2013	 	/s/ Keli J. Hazel
	 	 	Keli J. Hazel
	 	 	 
	June 3, 2013	 	/s/ Jeffrey S. Greene
	 	 	Jeffrey S. Greene
	 	 	 
	June 3, 2013	 	/s/ Stephen Michael Davis
	 	 	Stephen Michael Davis
	 	 	 
	June 3, 2013	 	BLAKE MIGUEL DAVIS TRUST
	 	 	 
	 	 	By:	/s/ David A. Deeter
	 	 	 	David A. Deeter, Co-Trustee
	 	 	 
	 	 	By:	/s/ Stephen Michael Davis
	 	 	 	Stephen Michael Davis, Co-Trustee

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE.]

 

    	-34-

    	 

    

 

[SIGNATURES CONTINUED
FROM PREVIOUS PAGE]

 

	 	Purchaser:
	 	 
	Date of Execution:	TRADE STREET OPERATING PARTNERSHIP, LP, a Delaware limited partnership
	 	 
	June 6, 2013	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/ Bert Lopez
	 	 	Name:	Bert Lopez
	 	 	Title:	COO/CFO
	 	 
	 	Purchaser’s Tax Identification Number/Social Security Number:
	 	 
	 	30-0734476

 

    	-35-

    	 

    

 

EXHIBIT A

 

_____________________________

 

Members of Stacy Road Partners, LLC:

 

Beaver Creek Trust

Fred S. Hazel

Lance A. Chernow

Keli J. Hazel

Jeffrey S. Greene

Stephen Michael Davis

Blake Miguel Davis Trust

 

    	Exhibit A

    	 

    

 

EXHIBIT 1.1.12

 

LIST OF EXCLUDED FIXTURES AND TANGIBLE
PERSONAL PROPERTY 

 

1.          AMSI
Software Licenses

 

    	Exhibit 1.1.12

    	 

    

 

EXHIBIT 1.1.15

 

LEGAL DESCRIPTION OF LAND

 

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 for 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 a
1.140 acre right-of-way dedication for Stacy Road;

 

THENCE along the north line of said 1.140 acre right-of-way
dedication for Stacy Road as follows:

 

SOUTH 89°15'43" WEST a distance of 117.34
feet to a 5/8 inch iron rod found for the beginning of curve to the right having a radius of 1,335.00 feet and a chord bearing
of North 89°26'33" West

 

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 found for the beginning of a curve to the left having a radius of 1,465.00 feet and a chord bearing
of North 89°26'35" West;

 

Continuing along said curve to the left through a
central angle of 02°35'25" for an arc length of 66.23 feet to a 5/8 inch iron rod found for the point of tangency;

 

SOUTH 89°15'43' WEST a distance of 779.96 feet
to a 5/8 inch iron rod set for the southwest corner of the herein described tract of land;

 

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 set for the northwest corner of the herein described tract of land;

 

THENCE NORTH 89°36'01" EAST a distance of 793.25 feet
to a point for corner located in the center of said Rowlett Creek and being the northeast corner of the herein described tract
of land;

 

THENCE along the center of said Rowlett Creek, SOUTH 26°20'21"
EAST a distance of 535.79 feet to a point for

corner;

 

    	Exhibit 1.1.15 – Page 1

    	 

    

 

THENCE continuing with the center 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 857,285
square feet of land more or less, all according to that survey prepared by A.J. Bedford Group, Inc.

 

TRACT II

 

Easement Estate as created in Reciprocal Easement Agreement
with Covenants, Conditions and Restrictions by and between McKinney Seven Stacy, LP, a Texas limited partnership and JK 720 Custer,
LP, a Texas limited partnership dated November 26, 1970, filed December 7, 2007, recorded cc#20071207001637170, Real Property Records
of Collin County, Texas.

 

 

    	Exhibit 1.1.15 – Page 2

    	 

    

 

EXHIBIT 1.1.24

 

PLANS AND SPECIFICATIONS

 

See attached

 

    	Exhibit 1.1.24

    	 

    

 

EXHIBIT 3.1.2

 

FORM OF ESCROW AGREEMENT

 

	 	Project Name:
	 	The Avenues at Craig Ranch

 

This Escrow Agreement,
dated as of June ____, 2013, by and among the parties listed on Exhibit A attached thereto and made a part hereof (collectively,
Seller”), TRADE STREET OPERATING PARTNERSHIP, LP, a Delaware limited partnership (“Purchaser”) and CHICAGO TITLE
INSURANCE Company (“Escrow Agent”);

 

WITNESSETH:

 

WHEREAS, Purchaser
has entered into a Purchase and Sale Contract dated June ___, 2013 (the “Contract”) with Seller, whereby Seller has
agreed to sell and Purchaser has agreed to buy certain premises described on Exhibit B attached hereto and made a part hereof
(the “Premises”); and

 

WHEREAS, pursuant
to the provisions of the Contract, Seller and Purchaser have requested that Escrow Agent act as escrow agent under the Contract,
and Purchaser has tendered good funds to Escrow Agent in the amount of $200,000.00 representing the Initial Deposit; and

 

WHEREAS, on
or before two (2) days after the expiration of the Feasibility Period, Purchaser is required to deliver to Escrow Agent $600,000.00
representing the Second Deposit;

 

WHEREAS, the
Initial Deposit and Additional Deposit are collectively referred to as the “Deposit;”

 

WHEREAS, Purchaser,
Escrow Agent and Seller wish to more particularly set forth and define the rights, obligations and duties of Escrow Agent in and
to the Deposit and the Deed;

 

NOW, THEREFORE,
in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser, Seller and Escrow Agent hereby agree as follows:

 

1.  The Deposit
is to be held in an interest-bearing account, pursuant to the Contract, with interest payable to Purchaser. Purchaser’s Federal
Tax Identification Number is ___________________. The wire transfer instructions for Escrow Agent are set forth on Exhibit C
attached hereto and made a part hereof.

 

2.  Both
Purchaser and Seller shall give notice to Escrow Agent at least two business days prior to closing pursuant to the Contract. Such
notice shall also include instructions for disbursement of the Deposit and the Deed at Closing.

 

    	Exhibit 3.1.2 – Page 1

    	 

    

 

3.  Upon
notice from Purchaser to Escrow Agent that it has terminated the Contract pursuant to the terms of Section 5.2 of the Contract,
the Initial Deposit shall immediately be returned to Purchaser and no notice from Seller shall be required. Both Purchaser and
Seller shall give notice to Escrow Agent for the disbursement of the Deposit in all other instances as provided in the Contract,
except in a notice of default in which case unilateral notice may be given. In the event Escrow Agent receives such unilateral
notice of default, Escrow Agent shall promptly notify the party alleged to have defaulted and if such party fails to notify Escrow
Agent of its dispute of a default within ten (10) days of receipt of Escrow Agent’s notice, then Escrow Agent may disburse
the Deposit in accordance with the unilateral notice of the party claiming default. If Escrow Agent does receive notice disputing
a claim of default within said ten (10) day period, then Escrow Agent may treat such as a dispute between Purchaser and Seller
and act in accordance with the terms of Paragraph 5 hereof.

 

4.  Purchaser
and Seller agree that (i) Escrow Agent is a mere stakeholder with respect to the Deposit and/or other monies payable to Escrow
Agent as escrow agent under the Contract and/or this Escrow Agreement, and (ii) Escrow Agent has no liability with respect
to said Deposit and other monies, except for gross negligence and/or willful neglect on the part of Escrow Agent.

 

5.  In the
event of a dispute between Purchaser and Seller with respect to the Deposit and/or other monies payable to Escrow Agent as escrow
agent under the Contract and/or this Escrow Agreement, Escrow Agent has the right, at its exclusive discretion, to deposit the
Deposit into any court having jurisdiction over the dispute between Purchaser and Seller. In the event Escrow Agent exercises its
rights under this paragraph, (a) all reasonable costs incurred by Escrow Agent (including but not limited to attorney’s fees)
shall be borne equally by Seller and Purchaser, and (b) all obligations of Escrow Agent under the Contract and/or this Escrow
Agreement shall terminate (except for liability of Escrow Agent for gross negligence and/or willful neglect as aforesaid).

 

6.  All reasonable
costs incurred by Escrow Agent as escrow agent under the Contract and/or this Escrow Agreement (except costs or liabilities arising
from Escrow Agent’s gross negligence and/or willful neglect) shall be borne equally by Seller and Purchaser, and each such
party agrees to indemnify and hold harmless Escrow Agent to the extent of such party’s respective liability for any loss,
costs, claim against Escrow Agent as escrow agent under the Contract and/or this Escrow Agreement (except for Escrow Agent’s
gross negligence and/or willful neglect).

 

7.  Any notice,
requests or demands to be made or given hereunder to any party shall be deemed duly given only if in writing and sent (i) by
messenger for hand delivery, (ii) by overnight delivery service or (iii) by certified mail, return receipt requested
and is addressed to the parties as follows:

 

    	Exhibit 3.1.2 – Page 2

    	 

    

 

If to Seller:

 

Davis Development, Inc.

1050 Eagles Landing Parkway, Suite 300

Stockbridge, Georgia 30281

Telephone (770) 474-4345

Facsimile (770) 474-5213

Email: fred@davisdevga.com

Attention: Fred S. Hazel

 

And to:

 

Davis Development, Inc.

1050 Eagles Landing Parkway, Suite 300

Stockbridge, Georgia 30281

Telephone (770) 474-4345

Facsimile (770) 474-5213

Email: lance@davisdevga.com

Attention: Lance A. Chernow

 

If to Purchaser:

Trade Street Operating Partnership, LP

19950 W. Country Club Drive

Suite 801

Aventura. Florida 33180

Telephone (786) 248-6050

Facsimile (786) 248-3679

Email: GBaumann@Trade-Street.com

Attention: Greg Baumann

 

With a copy to:

Bass, Berry & Sims, PLC

100 Peabody Place, Suite 900

Memphis, TN 38103

Telephone (901) 543-5943

Facsimile (901) 543-5999

Email guhlhorn@bassberry.com

Attention: T. Gaillard Uhlhorn

  

If to Escrow Agent, addressed to:

 

Chicago Title Insurance Company

5565 Glenridge Connector

    	Exhibit 3.1.2 – Page 3

    	 

    

 

Suite 300

Atlanta, Georgia 30342

Telephone (404) 303-3203

Facsimile (404) 419-3205

Email: chris.valentine@ctt.com

Attention: Christopher J. Valentine

 

8.  This
Escrow Agreement may be executed in counterparts. This Escrow Agreement shall be governed by the laws of the state in which the
Premises are located.

 

9.  Escrow
Agent shall not charge an escrow fee for the holding and disbursement of the Deposit pursuant to the Contract.

 

IN WITNESS WHEREOF,
this Escrow Agreement has been duly executed by the parties hereto, to be effective as of the date above written.

 

	 	Purchaser:
	 	 
	 	TRADE STREET OPERATING PARTNERSHIP, LP, a Delaware limited partnership
	 	 	 
	 	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:	 
	 	Name:	 
	 	Title:	 

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

    	Exhibit 3.1.2 – Page 4

    	 

    

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

	 	Seller:
	 	 
	 	BEAVER CREEK TRUST
	 	 	 
	 	By:	Briarcliff Management, LLC, a
	 	 	Nevada limited liability company, Trustee

 

	 	By:	 
	 	 	Fred S. Hazel, Co-Managing Member
	 	 	 
	 	By:	 
	 	 	Stephen Michael Davis, Co-Managing
	 	 	Member
	 	 	 
	 	By:	 
	 	 	David A. Deeter, Co-Managing
	 	 	Member

 

	 	 
	 	Fred S. Hazel
	 	 
	 	 
	 	Lance A. Chernow
	 	 
	 	 
	 	Keli J. Hazel
	 	 
	 	 
	 	Jeffrey S. Greene
	 	 
	 	 
	 	
        Stephen Michael Davis

         

 

	 	BLAKE MIGUEL DAVIS
TRUST 

	 	By:	 
	 	 	David A. Deeter, Co-Trustee
	 	 	 
	 	By:	 
	 	 	Stephen Michael Davis, Co-Trustee

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE.]

    	Exhibit 3.1.2 – Page 5

    	 

    

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

	 	Escrow Agent:
	 	 
	 	Chicago Title Insurance Company
	 	 	 
	 	By:	 
	 	Print Name:	 
	 	Title:	 

 

 

    	Exhibit 3.1.2 – Page 6

    	 

    

  

EXHIBIT A

 

 

Sellers:

Beaver Creek Trust

Fred S. Hazel

Lance A. Chernow

Keli J. Hazel

Jeffrey S. Greene

Stephen Michael Davis

Blake Miguel Davis Trust

 

    	Exhibit 3.1.2 – Page 7

    	 

    

 

EXHIBIT B

 

LEGAL DESCRIPTION

 

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 for 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 a
1.140 acre right-of-way dedication for Stacy Road;

 

THENCE along the north line of said 1.140 acre right-of-way
dedication for Stacy Road as follows:

 

SOUTH 89°15'43" WEST a distance of 117.34
feet to a 5/8 inch iron rod found for the beginning of curve to the right having a radius of 1,335.00 feet and a chord bearing
of North 89°26'33" West

 

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 found for the beginning of a curve to the left having a radius of 1,465.00 feet and a chord bearing
of North 89°26'35" West;

 

Continuing along said curve to the left through a
central angle of 02°35'25" for an arc length of 66.23 feet to a 5/8 inch iron rod found for the point of tangency;

 

SOUTH 89°15'43' WEST a distance of 779.96 feet
to a 5/8 inch iron rod set for the southwest corner of the herein described tract of land;

 

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 set for the northwest corner of the herein described tract of land;

 

THENCE NORTH 89°36'01" EAST a distance of 793.25 feet
to a point for corner located in the center of said Rowlett Creek and being the northeast corner of the herein described tract
of land;

 

    	Exhibit 3.1.2 – Page 8

    	 

    

 

THENCE along the center of said Rowlett Creek, SOUTH 26°20'21"
EAST a distance of 535.79 feet to a point for

corner;

 

THENCE continuing with the center 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 857,285
square feet of land more or less, all according to that survey prepared by A.J. Bedford Group, Inc.

 

TRACT II

 

Easement Estate as created in Reciprocal Easement Agreement
with Covenants, Conditions and Restrictions by and between McKinney Seven Stacy, LP, a Texas limited partnership and JK 720 Custer,
LP, a Texas limited partnership dated November 26, 1970, filed December 7, 2007, recorded cc#20071207001637170, Real Property Records
of Collin County, Texas.

 

    	Exhibit 3.1.2 – Page 9

    	 

    

 

EXHIBIT C

 

ESCROW AGENT’S WIRING INSTRUCTIONS

 

 

 

 

	ABA#:	 	 
	 	 	 
	 	 	 
	BANK:	 	 
	 	 	 
	 	 	 
	ACCOUNT #:	 	 
	 	 	 
	 	 	 
	CREDIT TO:	 	 
	 	 	 
	 	 	 
	CONTACT:	 	 
	 	PHONE:	 
	 	EMAIL:	 
	 	 	 
	PLEASE REFERENCE:	[INSERT NAME OF PROPERTY]

 

    	Exhibit 3.1.2 – Page 10

    	 

    

  

EXHIBIT 5.5

 

THE MATERIALS

  

		1.	Rent roll for the Property (when available and upon request) together with the form lease currently
in use at the Property, copies of tenant leases and copies of tenant files.

 

		2.	Licenses and Permits (excluding construction).

 

		3.	Occupancy Certificates (when available and upon request).

 

		4.	Copies of the most current real estate or personal property ad valorem tax statements for the Property.

 

		5.	Copies of all property contracts (even those not terminable within 90 days).

 

		6.	Personal Property Inventory.

 

		7.	Insurance loss runs, if any.

 

		8.	Occupancy Reports.

 

		9.	Architectural, mechanical, electrical, plumbing, drainage, construction, and similar plans, specifications
and blueprints relating to the Improvements.

 

		10.	Operating statements itemizing income and expense items
for the Property (when available and upon request).

 

		11.	Existing Title Policy and Recorded Exceptions.

 

		12.	Existing Boundary Survey.

 

		13.	Organizational Documents.

 

		14.	2011 Federal Tax Return.

 

		15.	The Plans and Specifications.

  

    	Exhibit 5.5

    	 

    

  

EXHIBIT 7.2.1.1

 

ASSIGNMENT AND ASSUMPTION OF INTERESTS

 

This Agreement of Assignment
and Assumption (the "Assignment") is made this _________ day of ________, 2013, by and among the parties listed
on Exhibit A attached hereto and made a part hereof (collectively, hereinafter referred to as "Assignor") and
______________________________, a _________________ (hereinafter referred to as "Assignee").

 

Recital of Facts

 

WHEREAS, Assignor are
the sole members of Stacy Road Partners, LLC, a Georgia limited liability company (the “Company"), pursuant to
that certain Second Amended and Restated Operating Agreement dated November 1, 2012 (the “Organizational Agreement");

 

WHEREAS, Assignor owns
and holds a one-hundred percent (100%) interest in the Company (the " Interest") and desires to convey the Interest
to Assignee; and

 

WHEREAS, pursuant to
and in accordance with that certain Purchase and Sale Contract (the “Contract”) between Assignor and Assignee
dated as of June ___, 2013, Assignor desires to assign, and Assignee desires to assume, the Interest.

 

NOW, THEREFORE, in
consideration of the sum of Ten Dollars ($10.00) and the agreements herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:

 

1.           Assignor
does hereby assign, transfer and set over to Assignee and Assignee’s successors and assigns, forever, the Interest, including,
without limitation, (i) all right, title and interest of Assignor in and to the Company, (ii) all right, title and interest of
Assignor pursuant to the Organizational Agreement in and to all real and personal property and every other right, however characterized,
now or hereafter held by the Company, and (iii) all of Assignor's respective claims, rights, powers, privileges, security interests,
liens and remedies under the Organizational Agreement.

 

2.           Assignee
hereby accepts the assignment and transfer from Assignor of the Interest in the Company and hereby assumes all obligations
of Assignor under the Organizational Agreement and otherwise as a Member arising after the date hereof.

 

3.           Assignor
represents and warrants to Assignee as follows:

 

(a)         Assignor
has the power and authority to execute and deliver this Assignment and transfer the Interests to Assignee pursuant to the terms
of this Assignment.

 

(b)        This
Assignment is the binding obligation of Assignor, enforceable in accordance with its terms.

 

    	Exhibit 7.2.1.1 – Page 1

    	 

    

 

 

(c)         Assignor
has good and marketable title to the Interests free and clear of all liens, claims and encumbrances and immediately after the transfer
of the Interests to Assignees hereunder, Assignee shall have good and marketable title to the Interests free and clear of all liens,
claims and encumbrances

 

4.           Assignor
and Assignee agree that this Assignment shall become effective as of the date hereof.

 

5.           From
time to time after the date hereof, Assignor will execute and deliver or cause to be executed and delivered such other instruments
of conveyance, assignment, transfer and delivery and will take such other reasonable actions as Assignee may reasonably request
in order to effectively transfer, convey, assign and deliver to Assignee the Interests.

 

6.           This
Assignment will be construed under and governed by the laws of the State of Georgia, without giving effect to principles of conflict
of laws of that state. Any action arising from or relating to this Assignment shall be brought in any State of Georgia court or
any federal court in Georgia where jurisdiction and venue are proper.

 

7.           This
Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective legal representatives,
successors and assigns.

 

8.           This
Assignment may be executed in counterparts, and each counterpart hereof shall be deemed to be an original instrument, but all such
counterparts shall constitute but one instrument.

 

    	Exhibit 7.2.1.1 – Page 2

    	 

    

 

IN WITNESS WHEREOF,
Assignor and Assignee have executed this instrument as of the day and year first above written.

 

	 	ASSIGNOR:
	 	 
	 	BEAVER CREEK TRUST
	 	 	 
	 	By:	Briarcliff Management, LLC, a
	 	 	Nevada limited liability company, Trustee

 

	 	By:	 
	 	 	Fred S. Hazel, Co-Managing Member
	 	 	 
	 	By:	 
	 	 	Stephen Michael Davis, Co-Managing
	 	 	Member
	 	 	 
	 	By:	 
	 	 	David A. Deeter, Co-Managing
	 	 	Member

 

	 	 
	 	Fred S. Hazel
	 	 
	 	 
	 	Lance A. Chernow
	 	 
	 	 
	 	Keli J. Hazel
	 	 
	 	 
	 	Jeffrey S. Greene

 

[SIGNATURES CONTINUE ON FOLLOWING PAGE.]

 

    	Exhibit 7.2.1.1 – Page 3

    	 

    

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE.]

 

	 	 
	 	Stephen Michael Davis 

	 	 	 
	 	BLAKE MIGUEL DAVIS TRUST 2012
	 	 	 
	 	By:	 
	 	 	David A. Deeter, Co-Trustee
	 	 	 
	 	By	 
	 	 	Stephen Michael Davis, Co-Trustee

 

[SIGNATURES CONTINUE OF FOLLOWING PAGE.]

 

    	Exhibit 7.2.1.1 – Page 4

    	 

    

 

[SIGNATURES CONTINUED FROM PREVIOUS PAGE.]

 

	 	ASSIGNEE:	 
	 	 	,a
	 	 	 

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	Exhibit 7.2.1.1 – Page 5

    	 

    

  

EXHIBIT
7.2.1.13

 

TENANT LETTER

 

________________, ________

 

		RE:	Notice of Change of Ownership of  _____________________________Apartments

 

Dear Tenants:

 

You are hereby notified as follows:

 

That as of the date hereof,_________________________
(the “Seller”) has transferred, sold, assigned, and conveyed all of its interest in and to the above-described
property, (the “Property”) to ____________________________ (the “New Owner”). After today,
New Owner will be responsible for all obligations of the “landlord” or “lessor” under your lease.

 

Future notices and
rental payments with respect to your lease premises at the Property should be made to the New Owner in accordance with your lease
terms at the following address:

 

	 	 	 
	 	 	 
	 	 	 

 

Your security deposit
has been transferred to the New Owner and as such the New Owner shall be responsible for holding the same in accordance with the
terms of your lease.

 

[The remainder of
this page is blank intentionally;

the signature page(s) follow.]

 

    	Exhibit 7.2.1.13 – Page 1

    	 

    

 

If you have any questions regarding any of this information,
please contact the New Owner.

 

	 	Very truly yours,	 
	 	 	 
	 	Seller:	 
	 	 	 	,
	 	a	 	 

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	New Owner:	 
	 	 	 	 
	 	a	 	 

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	Exhibit 7.2.1.13 – Page 2

    	 

    

  

EXHIBIT 15.22

 

Audit Representation Letter

 

____________________________

(Acquisition Completion Date)

 

Dear Sirs:

 

We are writing at your request to confirm
our understanding that your audit of the apartment community operations of “_______________________” for the twelve
months ended ________________, was made for the purpose of complying with the Securities and Exchange Commission Regulation S-X,
subsection 210.3-14 “Special Instructions for Real Estate Operations to Be Acquired”. In connection with your audit
we confirm, to the best of our knowledge and belief, the following representations made to you during your audit:

 

		1.	To our actual knowledge, we have made available
to you the financial records and related data described on Exhibit “A” attached hereto for the period under audit.

 

		2.	There have been no undisclosed:

 

		a.	Irregularities involving any member of management
or employees who have significant roles in the internal control structure.

 

		b.	Irregularities involving other persons that
could have a material effect on the financial records and related data.

 

		c.	Violations or possible violations of laws
or regulations, the effects of which should be considered for disclosure in the financial records and related data.

 

		3.	There are no undisclosed:

 

		a.	Unasserted claims or assessments that our
lawyers have advised us are probable of assertion.

 

		b.	Material gain or loss contingencies (including
oral and written guarantees).

 

		c.	Material transactions that have not been
properly recorded in the financial records and related data.

 

		d.	Material related party transactions and
related amounts receivable or payable, including sales, purchases, loans, transfers, leasing arrangements, and guarantees.

 

		e.	Events that have occurred subsequent to
the audit period that would require adjustment to or disclosure in the financial records and related data.

 

		4.	All aspects of contractual agreements that
would have a material effect on the financial records and related data have been complied with.

 

    	Exhibit 15.22 – Page 1

    	 

    

 

To our knowledge
and belief, no events have occurred subsequent to December 31, 20__, and through the date this letter is signed that would require
adjustment to or disclosure in the Financial Statements. Notwithstanding anything herein or otherwise to the contrary,
this letter has been delivered without recourse to the undersigned and in the event of any errors or inconsistencies, you and the
Buyer agree not to seek recourse against us (or our partners, officers, employees, agents or advisors) for any loss, cost expense,
liability or claim you may suffer or incur as a result thereof. This letter has been delivered solely, as an accommodation to Buyer
and, as a result, is without consideration.

 

	Very truly yours,	 
	“Seller/Management”	 

 

    	Exhibit 15.22 – Page 2

    	 

    

 

EXHIBIT 16.1

 

RENT CONCESSIONS

 

 

See attached.

 

    	Exhibit 16.1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}]]