Common use of Profits Interests Clause in Contracts

Profits Interests. (i) The Company intends that each Class B Unit (such Class B Units, a “Profits Interest”), when issued, be treated as a separate “profits interest” within the meaning of Revenue Procedure 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits Interests. In accordance with Revenue Procedure 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company shall treat a Member holding a Profits Interest as the owner of such Profits Interest from the date it is granted, and shall file its IRS form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits Interest. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value of such Profits Interest issued to a Member, either at the time of grant of the Profits Interest or at the time any unvested Profits Interest becomes substantially vested. (iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the “Safe Harbor Election”), as the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f). (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (ia) The Company intends that and each Class B Unit Member agree to treat each Incentive Member’s Incentive Units (such Class B Unitsinterest, a “Profits Interest”), when issued, be treated ) as a separate “profits interestProfits Interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or and it is the intention of the Company and the Members that distributions to each Incentive Member (including any future IRS guidance or other authority additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits InterestsInterest of such Incentive Member qualifies as a “Profits Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. In the event that distributions to a Member pursuant to Section 5.02 are limited as a result of the first sentence of this Section 3.08, the Board of Managers is authorized to adjust future distributions to the Members in whatever manner it reasonably deems appropriate so that, after such adjustments are made, each Member receives, to the maximum extent possible, an amount of distributions equal to the amount of distributions such Member would have received were such sentence not part of this Agreement. Additionally, in accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company shall treat a Member holding a Profits Interest an Incentive Unit as the owner of such Profits Interest Unit from the date it is granted, and shall file its IRS form Form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with any such Profits Interest subject to vesting as if it were fully vested. Each Incentive Member agrees to take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits Interest. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value fair market value of such Profits Interest issued to a an Incentive Member, either at the time of grant of the Profits Interest or at the time any unvested the Profits Interest becomes substantially vested. The undertakings contained in this Section 3.08 shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. Each Incentive Member shall be required to file an election pursuant to Section 83(b) of the Code (a “Section 83(b) Election”) with respect to its Incentive Units no later than ten days after receipt of such Incentive Units. The provisions of this Section 3.08 shall apply regardless of whether or not an Incentive Member files a Section 83(b) Election with respect to its Incentive Units. (iiib) (i) The Company Board of Managers is hereby authorized and directed to cause the Company to make an election to value any Profits Interests Incentive Units issued by the Company as compensation for services to the Company (collectively, “Compensatory Interests”) at liquidation value (the “Safe Harbor Election”), as the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, The Board of Managers shall cause the Company shall to make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f). (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (i) The Company intends Partnership and each Partner agree (i) that each Class B Unit (such Class B Units, a “Profits Interest”), when issued, the General Partner shall be permitted to issue an interest in the Partnership to any Partner intended to be treated as a separate “profits interestProfits Interests” with respect to the Partnership, within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits Interestsas clarified by Rev. Proc. In accordance with Revenue Procedure 2001-43, 2001-2 CB 34 I.R.B. 191, for federal income tax purposes, ; (ii) to treat any Profits Interests as such; and (iii) that the Company provisions of this Agreement shall be interpreted in a manner consistent with the intended status of any Profits Interest. (ii) Any Profits Interests issued by the Partnership shall be subject to the following provision: Absent a contrary determination by the General Partner based on a change in law governing the taxation of “profits interests”: (A) the Partnership and each Partner shall treat each Partnership interest granted to such Partner as a Member holding Profits Interest; (B) the Partnership and each Partner shall treat each holder of a Profits Interest as the owner of such Profits Interest interest from the date it such interest is granted, and shall file its IRS form 1065, and issue appropriate Schedule K-1s to granted until such Member, allocating to such Member its distributive share interest is forfeited or otherwise disposed of; (C) each holder of all items of income, gain, loss, deduction and credit associated with any a Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share of the Partnership’s income, gain, deduction and loss in computing its U.S. federal income tax liability for the entire period during which it holds the such Profits Interest. The Company ; and (D) each Member agree Partner agrees not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value in respect of such any Profits Interest issued to a Member, either at the time of upon grant or vesting of the Profits Interest Interest. Upon a change in law governing the taxation of “profits interests,” each Partner shall take such actions as may be requested by the Partnership in response to such change in law, including agreeing to amend this Agreement in a manner the General Partner deems necessary or at appropriate to reflect such change in law and reporting any such matters in their income tax returns as determined by the time General Partner. Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and empowered, without further vote or action of the Partners, to amend this Agreement as it deems necessary or appropriate to comply with the requirements of, or address changes to, any unvested Profits Interest becomes substantially vestedlaw applicable to the taxation of “profits interests.” (iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the “Safe Harbor Election”), as the same may be permitted pursuant to or Partnership and each Partner agree that each Partner will only receive distributions in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations respect of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, Operating Profit to the extent permitted that the amounts included in such Operating Profits are determined by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest shall have agreed General Partner in writing its sole discretion to be bound by (a) sourced out of appreciation in the provisions of this Section 2.2(f). (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests assets of the Members, so that Fund after the Percentage Interest associated with forfeited Class B Units is reallocated among date each such Partner’s admission to the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance Partnership or (b) otherwise consistent with the ratio treatment of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, Partner’s Points as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future profits interests for failure to vestU.S. federal income tax purposes. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (ia) The Company intends that each Each Class B Unit (such Class B Units, a “Profits Interest”), when issued, shall be treated as a separate “profits interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure343 and as a Safe Harbor Interest. (iib) The Class B Units are Profits Interests. In accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company Partnership shall treat a Member holding a Profits Interest holder of Class B Units as the owner of such Profits Interest Class B Units from the date it is such Class B Units are granted, and shall file its IRS form 1065Internal Revenue Service Form 1065 (or such successor form), and issue appropriate Schedule K-1s (or such successor schedules) to such Memberholder of Class B Units, allocating to such Member holder its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting such Class B Units as if it were fully vested. Each Member agrees to holder of Class B Units shall take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits InterestClass B Units. The Company and each Member agree not to Neither the Partnership nor any Partner shall claim a deduction (as wages, compensation or otherwise) for the Fair Market Value fair market value of such Profits Interest Class B Units issued to a Memberholder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time any unvested Profits Interest the Class B Units becomes substantially vested. The undertakings contained in this Section 17.4(b) shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. (iiic) The Company Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Partnership to make an election to value any Profits Interests at liquidation value (the “a Safe Harbor Election”), as Election with respect to the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”)Class B Units. Upon making such an election, the Company The Partnership shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viiid) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company Class B Units by a Memberholder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 2.2(f)17.4, in form satisfactory to the General Partner. (ixe) On the forfeiture The provisions of an unvested Class B Unit, the forfeited Class B Unit this Section 17.4 shall be cancelled. The Manager shall recompute the Percentage Interests apply regardless of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio whether or not such holder of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at files an election pursuant to Section 83(b) of the time Code. PREFERRED APARTMENT COMMUNITIES, INC. By: Name: Title: PREFERRED APARTMENT ADVISORS, LLC By: NXXX Partners, Inc., its Member By: Name: Title: PREFERRED APARTMENT ADVISORS, LLC By: NXXX Partners, Inc., its Member By: Name: Title: Dated: ____________ __, 20___ [Name of reallocation Corporation/LLC] By: Name: Title: Dated: ____________ __, 20___ [Name of LP] By: Name: Title: Preferred Apartment Communities, Inc. General Partner Interest GP Units $ 109,998 36,666 0.709 % 3000 Xxxxxxxxxx Xxxxxxxxx Xxxxx 000 Limited Partner Interest Series A Redeemable Preferred Units None Not applicable Not applicable Axxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units $ 51,363,514 5,136,733 99.291 % Preferred Apartment Advisors, LLC Limited Partner Interest Class A Units $ 1 .1 0.000002 % 3000 Xxxxxxxxxx Xxxxxxxxx Xxxxx 000 Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units None Not applicable Not applicable Preferred Apartment Advisors, LLC 3000 Xxxxxxxxxx Xxxxxxxxx Xxxxx 000 Xxxxxxx, Xxxxxxx 00000 Special Limited Partner Interest None None Not applicable Not applicable For purposes of this Exhibit B, the term “Partner” shall become subject to include the existing schedule and to potential forfeiture in the future for failure to vestSpecial Limited Partner. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (ia) The Company intends that each Each Class B Unit (such Class B Units, a “Profits Interest”), when issued, shall be treated as a separate “profits interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure343 and as a Safe Harbor Interest. (iib) The Class B Units are Profits Interests. In accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company Partnership shall treat a Member holding a Profits Interest holder of Class B Units as the owner of such Profits Interest Class B Units from the date it is such Class B Units are granted, and shall file its IRS form 1065Internal Revenue Service Form 1065 (or such successor form), and issue appropriate Schedule K-1s (or such successor schedules) to such Memberholder of Class B Units, allocating to such Member holder its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting such Class B Units as if it were fully vested. Each Member agrees to holder of Class B Units shall take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits InterestClass B Units. The Company and each Member agree not to Neither the Partnership nor any Partner shall claim a deduction (as wages, compensation or otherwise) for the Fair Market Value fair market value of such Profits Interest Class B Units issued to a Memberholder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time any unvested Profits Interest the Class B Units becomes substantially vested. The undertakings contained in this Section 17.4(b) shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. (iiic) The Company Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Partnership to make an election to value any Profits Interests at liquidation value (the “a Safe Harbor Election”), as Election with respect to the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”)Class B Units. Upon making such an election, the Company The Partnership shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viiid) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company Class B Units by a Memberholder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 2.2(f)17.4, in form satisfactory to the General Partner. (ixe) On the forfeiture The provisions of an unvested Class B Unit, the forfeited Class B Unit this Section 17.4 shall be cancelled. The Manager shall recompute the Percentage Interests apply regardless of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio whether or not such holder of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at files an election pursuant to Section 83(b) of the time Code. General Partner: PREFERRED APARTMENT COMMUNITIES, INC. By: Name: Title: Initial Limited Partner: PREFERRED APARTMENT ADVISORS, LLC By: XXXX Partners, Inc., its Member By: Name: Title: Special Limited Partner: PREFERRED APARTMENT ADVISORS, LLC By: XXXX Partners, Inc., its Member By: Name: Title: Dated: ____________ __, 20___ [Name of reallocation Corporation/LLC] By: Name: Title: Dated: ____________ __, 20___ [Name of LP] By: Name: Title: Name and Address of Partner Type of Interest Type of Units Capital Contribution Number of Partnership Units Percentage Interest Preferred Apartment Communities, Inc. 0000 Xxxxxxxxxx Xxxxxxxxx Xxxxx 000 Xxxxxxx, Xxxxxxx 00000 General Partner Interest GP Units $109,998 36,666 0.708741% Preferred Apartment Communities, Inc. Limited Partner Interest Series A Redeemable Preferred Units None Not applicable Not applicable Preferred Apartment Communities, Inc. Limited Partner Interest Class A Units $51,363,514 5,136,733 99.291257% Preferred Apartment Advisors, LLC 0000 Xxxxxxxxxx Xxxxxxxxx Xxxxx 000 Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units $1 .1 0.000002% Preferred Apartment Advisors, LLC Special Limited Partner Interest None None Not applicable Not applicable For purposes of this Exhibit B, the term “Partner” shall become subject to include the existing schedule and to potential forfeiture in the future for failure to vestSpecial Limited Partner. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (ia) The Company intends that each Each Class B Unit (such Class B Units, a “Profits Interest”), when issued, shall be treated as a separate “profits interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure343 and as a Safe Harbor Interest. (iib) The Class B Units are Profits Interests. In accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company Partnership shall treat a Member holding a Profits Interest holder of Class B Units as the owner of such Profits Interest Class B Units from the date it is such Class B Units are granted, and shall file its IRS form 1065Internal Revenue Service Form 1065 (or such successor form), and issue appropriate Schedule K-1s (or such successor schedules) to such Memberholder of Class B Units, allocating to such Member holder its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting such Class B Units as if it were fully vested. Each Member agrees to holder of Class B Units shall take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits InterestClass B Units. The Company and each Member agree not to Neither the Partnership nor any Partner shall claim a deduction (as wages, compensation or otherwise) for the Fair Market Value fair market value of such Profits Interest Class B Units issued to a Memberholder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time any unvested Profits Interest the Class B Units becomes substantially vested. The undertakings contained in this Section 18.4(b) shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. (iiic) The Company Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Partnership to make an election to value any Profits Interests at liquidation value (the “a Safe Harbor Election”), as Election with respect to the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”)Class B Units. Upon making such an election, the Company The Partnership shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viiid) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company Class B Units by a Memberholder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 2.2(f)18.4, in form satisfactory to the General Partner. (ixe) On the forfeiture The provisions of an unvested Class B Unit, the forfeited Class B Unit this Section 18.4 shall be cancelled. The Manager shall recompute the Percentage Interests apply regardless of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio whether or not such holder of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at files an election pursuant to Section 83(b) of the time Code. General Partner: PREFERRED APARTMENT COMMUNITIES, INC. By: /s/ Xxxx X. Williams_____________________ Xxxx X. Xxxxxxxx President and Chief Executive Officer Initial Limited Partner: PREFERRED APARTMENT ADVISORS, LLC By: XXXX Partners, Inc., its Member By:_/s/ Xxxx X. Williams___________________ Xxxx X. Xxxxxxxx President and Chief Executive Officer Special Limited Partner: PREFERRED APARTMENT ADVISORS, LLC By: XXXX Partners, Inc., its Member By: /s/ Xxxx X. Xxxxxxxx ___________________ Xxxx X. Xxxxxxxx President and Chief Executive Officer Dated: ____________ __, 20___ [Name of reallocation Corporation/LLC] By: Name: Title: Dated: ____________ __, 20___ Name: Dated: ____________ __, 20___ [Name of Partnership] By: Name: Title: Exhibit A (as of January 16, 2013) Name and Address of Partner Type of Interest Type of Units Number of Partnership Units Percentage Interest Preferred Apartment Communities, Inc. 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 General Partner Interest GP Units 36,666 0.675438 % Limited Partner Interest Class A Units 5,136,733 97.353695 % Preferred Apartment Advisors, LLC 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units .1 0.000002 % Preferred Apartment Advisors, LLC 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Special Limited Partner Interest None Not applicable Not applicable WSW Holdings, LLC f/b/oWSW Holdings (WY), LLC f/b/o Xxxx X. Xxxxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units 41,149 0.758021% Name and Address of Partner Type of Interest Type of Units Number of Partnership Units Percentage Interest WSW Holdings, LLC f/b/oWSW Holdings (WY), LLC f/b/o Xxxxxxx X. Xxxxxxxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units 32,919 0.606413% Xxxxxxx X. Xxxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units 16,460 0.303216% Xxxxxxx X. Xxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units 16,460 0.303216% Xxxxxx X. XxXxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 6,128 Not applicable Xxxxxxx X. Xxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 10,808 Not applicable Xxxxxxx X. Day 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 3,088 Not applicable Name and Address of Partner Type of Interest Type of Units Number of Partnership Units Percentage Interest Xxxx Xxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 6,128 Not applicable Exhibit B Allocations For purposes of this Exhibit B, the term “Partner” shall become subject to include the existing schedule and to potential forfeiture in the future for failure to vestSpecial Limited Partner. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (i) The Company intends that each Class A-1 Units and Class B Unit (such Class B Units, a “Profits Interest”), when issued, Units issued hereunder are intended to qualify and shall be treated under this Agreement as a separate “profits interestinterests” within the meaning of Revenue Procedure 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits Interests. In accordance with as clarified by Revenue Procedure 2001-43, 2001-2 CB C.B. 191. As such, for federal income tax purposesnone of the Members issued such Units shall be obligated to make Capital Contributions in respect of any Units so qualifying, the Company shall treat a Member such Members as holding a Profits Interest as the owner “profits interests” for all purposes of this Agreement in respect of such Profits Interest from Units so issued, and if the Company were liquidated immediately after issuance of the Class A-1 Units and Class B Units pursuant to this Agreement, before the Company made any earnings and before any appreciation occurred in the value of the Company’s assets, and the Company’s assets were sold at Fair Market Value and the proceeds distributed in a complete liquidation and dissolution of the Company, the holders of Class A-1 Units and Class B Units would not be entitled to receive any share of the proceeds of such complete liquidation and dissolution in respect of such Units. (ii) In connection with the issuance of any Class A-1 Units or Class B Units, the Board shall determine a strike price (a “Strike Price”) with respect to each such Unit. The Strike Price for any such Unit generally will be not less than the aggregate Fair Market Value of the Company’s assets (as determined by the Board in its sole discretion) reduced by any outstanding Company liabilities (limited, in the case of nonrecourse liabilities, to the collateral securing or otherwise available to satisfy such liabilities) as of the date it such Unit is grantedissued and may be increased to take into account any Capital Contributions to the Company that are made after such Unit is issued. For purposes of clarity, each such Unit issued on the same day shall have the same Strike Price. In the event the Board determines to issue additional Units with a Strike Price lower than the Strike Price associated with a prior issuance of Units, the Board may, in its sole discretion, reduce the Strike Price of the Units issued at the higher Strike Price. This Section 3.1(e) reflects the intention that any such Units issued after the date of this Agreement qualify as a “profits interest” under Revenue Procedure 93-27, 1993-2 C.B. 343 and Revenue Procedure 2001-43, 2001-2 C.B. 191, as contemplated by Section 3.1(e)(v) hereof. (iii) To the extent provided for in Treasury Regulations, revenue rulings, revenue procedures and/or other IRS guidance issued after the date hereof, the Company is hereby authorized to, and shall file its IRS form 1065at the direction of the Board shall, and issue appropriate Schedule K-1s elect a safe harbor under which the Fair Market Value of any Class A-1 Units or Class B Units issued after the effective date of such Treasury Regulations (or other guidance) will be treated as equal to the liquidation value of such Units (i.e., a value equal to the total amount that would be distributed with respect to such Units if the Company sold all of its assets for their Fair Market Value immediately after the issuance of such Units, satisfied its liabilities (excluding any nonrecourse liabilities to the extent the balance of such liabilities exceeds the Fair Market Value of the assets that secure them) and distributed the net proceeds to the Members under the terms of this Agreement). In the event that the Company makes a safe harbor election as described in the preceding sentence, each Member hereby agrees to comply with all safe harbor requirements with respect to Transfers of such Units while the safe harbor election remains effective. (iv) Notwithstanding the foregoing, upon a forfeiture of any Units by any Member, allocating to such Member its distributive share of all gross items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits Interest. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value of such Profits Interest issued to a Member, either at the time of grant of the Profits Interest or at the time any unvested Profits Interest becomes substantially vested. (iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the “Safe Harbor Election”), as the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election deduction shall be binding on allocated to such Member if and to the Company and on all of its Members extent required by final Treasury Regulations promulgated after the date hereof to ensure that allocations made with respect to all Transfers “substantially nonvested” Interests of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable ruleMembers are recognized under Code Section 704(b). (v) Each Member (including any person recipient of a Class B Unit hereunder hereby agrees that such recipient shall make a valid and timely election in respect of such Unit, upon receipt thereof, pursuant to whom a Profits Interest is Transferred in connection with the performance of servicesCode Section 83(b), by signing this Agreement or by accepting and shall provide the Company with an executed copy of such Transferelection, hereby agrees except to comply with all requirements the extent the Board determines that such Class B Units are not subject to a “substantial risk of forfeiture” within the Safe Harbor Election with respect to all Profits Interests Transferred while meaning of Code Section 83(a) and the Safe Harbor Election remains effectiveTreasury Regulations thereunder. (vi) The Company, acting under the control Allocations of the Manager, income or loss pursuant to Article 4 shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election made with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees Class B Units, whether vested or unvested. Any distributions pursuant to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation Article 5 hereof with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f). (ix) On the forfeiture of an unvested Class B Unit, Units (other than distributions under Section 5.3) shall not be made to the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests holders of the Members, so that the Percentage Interest associated with forfeited such unvested Class B Units is reallocated among until such Units vest, at which time any such distributions shall be made to the remaining outstanding Class A Units and holder of such then vested Class B Units. The Manager shall reallocate this Any distributions pursuant to the foregoing sentence that are forfeited Percentage Interest among as a result of the remaining outstanding Class A Units and forfeiture without vesting of the applicable Class B Units pro rata shall thereafter be retained and/or distributed in accordance a manner consistent with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and distribution priorities set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held Article 5 as determined by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vestBoard. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (i) 3.8.1 From and after the Effective Date, with the prior approval of the Board, the Company may from time to time issue Management Incentive Units from and to the extent of the Management Pool. The Company intends that each Class B Unit (such Class B Units, a “Profits Interest”), when issued, be treated as a separate Management Incentive Units are intended to constitute “profits interestinterests” within the meaning of Revenue Procedure 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits Interests. In accordance with as clarified by Revenue Procedure 2001-43, 2001-2 CB C.B. 191, for federal income tax purposes, the Company . The Management Incentive Units are interests solely in profits and shall treat a Member holding a Profits Interest as the owner of such Profits Interest from have Capital Accounts associated therewith on the date of issuance of zero dollars and shall not at any time receive any distribution that would cause the Capital Account associated therewith to have a negative value. In accordance with the foregoing, it is granted, and shall file its IRS form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits Interest. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value of such Profits Interest issued to a Member, either intended that at the time of grant of the Profits Interest or any Management Incentive Units that there shall be no liquidation value attributable thereto. In order to eliminate any liquidation value of any Management Incentive Unit at the time any unvested Profits Interest becomes substantially vested. of its grant, the Board shall establish a “participation threshold” amount for such Management Incentive Unit which shall be an amount that is not less than the Board-determined aggregate valuation for the Company as of the date such Management Incentive Unit is granted (each, a “Participation Threshold”). Such valuation shall be an amount not less than the amount that would be distributed in respect of all Units, if, immediately after the Management Incentive Unit is issued, the Company were to liquidate completely and in connection with such liquidation (i) sell all of its assets at their fair market values, (ii) settle all of its liabilities at their fair market values to the extent of the available assets of the Company, (iii) The each Member were to pay to the Company is hereby authorized at that time the amount of any obligation then unconditionally due to make an election the Company, and (iv) the Company were to value distribute any Profits Interests at liquidation value (remaining cash and other proceeds to the “Safe Harbor Election”), as the same may be permitted pursuant to or Members in accordance with the finally promulgated successor rules to Proposed Regulations distribution provisions of Section 1.83-3(l) and IRS Notice 2005-43 (collectively8.5.1; provided, however, that the Participation Threshold shall not be less than zero dollars. As of the Effective Date, the “Proposed Rules”). Upon making such an election, Participation Threshold for each of the Company shall make any allocations then outstanding Management Incentive Units is set forth in Schedule A to Exhibit A. The Board may equitably adjust the Participation Thresholds of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as the outstanding Management Incentive Units to allocation periods) the extent the Board determines necessary or appropriate to effectuate and maintain preserve the Safe Harbor Electioneconomic rights represented by the Management Incentive Units. Notwithstanding anything to the contrary in this Agreement, the Board may defer or reduce any distribution that would otherwise be made in respect of any Management Incentive Unit pursuant to this Agreement, to the extent the Board determines such reduction is necessary or appropriate to procure that such Management Incentive Unit will be treated as a “profits interest” as that term is defined in Revenue Procedure 93-27, 1993-2 C.B. 343, as clarified by Revenue Procedure 2001-43, 2001-2 C.B. 191. 3.8.2 The Company and the holders of Management Incentive Units shall file all tax returns consistent with such characterization. Within thirty (iv30) Any days following the receipt of any Unvested Units on or after the date hereof, each holder of such Safe Harbor Election Unvested Units will file with the Internal Revenue Service an election authorized by Code Section 83(b) with respect to such Unvested Units and will deliver to the Company a copy of such election promptly after its filing. The failure of the holder thereof to timely file such election under Code Section 83(b) within thirty (30) days following the receipt of any Unvested Units on or after the date hereof shall be binding result in the immediate forfeiture of such Unvested Units on the thirty-first (31st) day following such holder’s receipt of such Unvested Units. 3.8.3 Each Member authorizes the Board to elect to apply the safe harbor set forth in proposed Treasury Regulations Section 1.83-(l) (under which the fair market value of a partnership interest that is transferred in connection with the performance of services is treated as being equal to the liquidation value of that interest) if such proposed Treasury Regulation or similar Treasury Regulation becomes a Regulation. If the Board determines that the Company should make such election, the Members hereby authorize the Board to amend this Agreement to provide (i) the Company is authorized and directed to elect the safe harbor, (ii) the Company and on all each of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person Person to whom a Profits Membership Interest is Transferred transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby ) agrees to comply with all requirements of the Safe Harbor Election safe harbor with respect to all Profits Interests Transferred interests transferred in connection with the performance of services while such election remains in effect and (iii) the Safe Harbor Election remains effective. (vi) The CompanyCompany and each of its Members agree to take all actions necessary, acting under including providing the control of the ManagerCompany with any required information, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with permit the Company to perfect and maintain any Safe Harbor Election that comply with the Company elects requirements set forth or referred to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, applicable Regulations for such election to be effective. The Members authorize the Board to amend this Agreement to modify Article 5 (Allocations of Net Profits and Net Losses) to the extent permitted by this Agreement, shall be effective unless prior the Board determines in its discretion that such modification is necessary or desirable as a result of the issuance of Regulations relating to such Transfer, the transferee, assignee or intended recipient tax treatment of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f). (ix) On the forfeiture transfer of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued interest in connection with the performance of services. Notwithstanding anything to the contrary in this Agreement, the Board shall not be required to obtain the Members’ consent to amend this Agreement in accordance with this Section 3.8.3 and each Member agrees that it will be legally bound by any such amendment. 3.8.4 For the avoidance of doubt, neither the Company nor any Member of the Company is providing any covenant or guarantee that the characterization of the Management Incentive Units as “profits interests” as described in this Section 3.8 shall under no circumstances be liable for accepted by any such taxesgovernment authority or a court of law.

Profits Interests. (i) The Company intends that and each Class B Unit Member agree to treat each Incentive Member’s Incentive Units (such Class B Unitsinterest, a “Profits Interest”), when issued, be treated ) as a separate “profits interestProfits Interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or and it is the intention of the Company and the Members that distributions to each Incentive Member (including any future IRS guidance or other authority additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits InterestsInterest of such Incentive Member qualifies as a “Profits Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. In the event that distributions to a Member pursuant to Section 5.02 are limited as a result of the first sentence of this Section 3.08, the Board of Managers is authorized to adjust future distributions to the Members in whatever manner it reasonably deems appropriate so that, after such adjustments are made, each Member receives, to the maximum extent possible, an amount of distributions equal to the amount of distributions such Member would have received were such sentence not part of this Agreement. Additionally, in accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company shall treat a Member holding a Profits Interest an Incentive Unit as the owner of such Profits Interest Unit from the date it is granted, and shall file its IRS form Form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with any such Profits Interest subject to vesting as if it were fully vested. Each Incentive Member agrees to take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits Interest. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value fair market value of such Profits Interest issued to a an Incentive Member, either at the time of grant of the Profits Interest or at the time any unvested the Profits Interest becomes substantially vested. (iii) . The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the “Safe Harbor Election”), as the same may undertakings contained in this Section 3.08 shall be permitted pursuant to or construed in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.834 of Rev. Proc. 2001-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”)43. Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election Each Incentive Member shall be binding on required to file an election pursuant to Section 83(b) of the Company and on all of its Members Code (a “Section 83(b) Election”) with respect to all Transfers its Incentive Units no later than ten days after receipt of Profits Interests made by the Company while such Incentive Units. The provisions of this Section 3.08 shall apply regardless of whether or not an Incentive Member files a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (vSection 83(b) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effectiveits Incentive Units. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f). (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. i. The Partnership and each Partner agree (i) The Company intends that each Class B Unit (such Class B Units, a “Profits Interest”), when issued, the General Partner shall be permitted to issue an interest in the Partnership to any Partner intended to be treated as a separate “profits interestProfits Interests” with respect to the Partnership, within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits Interestsas clarified by Rev. Proc. In accordance with Revenue Procedure 2001-43, 2001-2 CB 34 I.R.B. 191, for federal income tax purposes, ; (ii) to treat any Profits Interests as such; and (iii) that the Company provisions of this Agreement shall be interpreted in a manner consistent with the intended status of any Profits Interest. ii. Any Profits Interests issued by the Partnership shall be subject to the following provision: Absent a contrary determination by the General Partner based on a change in law governing the taxation of “profits interests”: (A) the Partnership and each Partner shall treat each Partnership interest granted to such Partner as a Member holding Profits Interest; (B) the Partnership and each Partner shall treat each holder of a Profits Interest as the owner of such Profits Interest interest from the date it such interest is granted, and shall file its IRS form 1065, and issue appropriate Schedule K-1s to granted until such Member, allocating to such Member its distributive share interest is forfeited or otherwise disposed of; (C) each holder of all items of income, gain, loss, deduction and credit associated with any a Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share of the Partnership’s income, gain, deduction and loss in computing its U.S. federal income tax liability for the entire period during which it holds the such Profits Interest. The Company ; and (D) each Member agree Partner agrees not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value in respect of such any Profits Interest issued to a Member, either at the time of upon grant or vesting of the Profits Interest or at Interest. Upon a change in law governing the time any unvested Profits Interest becomes substantially vested. (iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the taxation of “Safe Harbor Election”), profits interests,” each Partner shall take such actions as the same may be permitted pursuant requested by the Partnership in response to or such change in accordance with law, including agreeing to amend this Agreement in a manner the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) General Partner deems necessary or appropriate to effectuate reflect such change in law and maintain the Safe Harbor Election. (iv) Any reporting any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made matters in their income tax returns as determined by the Company while a Safe Harbor Election is General Partner. Notwithstanding anything in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor this Agreement to the Proposed Rules contrary, the General Partner is hereby authorized and empowered, without further vote or any other applicable rule. (v) Each Member (including any person action of the Partners, to whom a Profits Interest is Transferred in connection with the performance of services), by signing amend this Agreement as it deems necessary or by accepting such Transfer, hereby agrees appropriate to comply with all the requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Companyof, acting under the control of the Manageror address changes to, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, law applicable to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient taxation of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f)“profits interests. (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.”

Profits Interests. (ia) The Company intends that each Each Class B Unit (such Class B Units, a “Profits Interest”), when issued, shall be treated as a separate “profits interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure343 and as a Safe Harbor Interest. (iib) The Class B Units are Profits Interests. In accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company Partnership shall treat a Member holding a Profits Interest holder of Class B Units as the owner of such Profits Interest Class B Units from the date it is such Class B Units are granted, and shall file its IRS form 1065Internal Revenue Service Form 1065 (or such successor form), and issue appropriate Schedule K-1s (or such successor schedules) to such Memberholder of Class B Units, allocating to such Member holder its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting such Class B Units as if it were fully vested. Each Member agrees to holder of Class B Units shall take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits InterestClass B Units. The Company and each Member agree not to Neither the Partnership nor any Partner shall claim a deduction (as wages, compensation or otherwise) for the Fair Market Value fair market value of such Profits Interest Class B Units issued to a Memberholder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time any unvested Profits Interest the Class B Units becomes substantially vested. The undertakings contained in this Section 17.4(b) shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. (iiic) The Company Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Partnership to make an election to value any Profits Interests at liquidation value (the “a Safe Harbor Election”), as Election with respect to the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”)Class B Units. Upon making such an election, the Company The Partnership shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viiid) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company Class B Units by a Memberholder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 2.2(f)17.4, in form satisfactory to the General Partner. (ixe) On the forfeiture The provisions of an unvested Class B Unit, the forfeited Class B Unit this Section 17.4 shall be cancelled. The Manager shall recompute the Percentage Interests apply regardless of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio whether or not such holder of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at files an election pursuant to Section 83(b) of the time Code. General Partner: PREFERRED APARTMENT COMMUNITIES, INC. By: /s/ Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx Chief Executive Officer Initial Limited Partner: PREFERRED APARTMENT ADVISORS, LLC By: XXXX Partners, Inc., its Member By:/s/ Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx Chief Executive Officer Special Limited Partner: PREFERRED APARTMENT ADVISORS, LLC By: XXXX Partners, Inc., its Member By:/s/ Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx Chief Executive Officer Dated: ____________ __, 20___ [Name of reallocation Corporation/LLC] By: Name: Title: Dated: ____________ __, 20___ Name: Dated: ____________ __, 20___ [Name of Partnership] By: Name: Title: Exhibit A (as of January 10, 2014) Name and Address of Partner Type of Interest Type of Units Number of Partnership Units Percentage Interest Preferred Apartment Communities, Inc. 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 General Partner Interest GP Units 36,666 0.2356083% Preferred Apartment Advisors, LLC 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units .1 0.0000006% Preferred Apartment Advisors, LLC 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Special Limited Partner Interest None Not applicable Not applicable WSW Holdings, LLC f/b/oWSW Holdings (WY), LLC f/b/o Xxxx X. Xxxxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 73,764 Not applicable WSW Holdings, LLC f/b/oWSW Holdings (WY), LLC f/b/o Xxxxxxx X. Xxxxxxxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 63,902 Not applicable Name and Address of Partner Type of Interest Type of Units Number of Partnership Units Percentage Interest Xxxxxxx X. Xxxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 20,946 Not applicable Xxxxxxx X. Xxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 20,946 Not applicable Xxxxxx X. XxXxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 30,571 Not applicable Xxxxxxx X. Xxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 18,414 Not applicable Xxxxxxx X. Day 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 5,122 Not applicable Xxxx Xxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 10,358 Not applicable Xxxx X. Iskason 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 4,892 Not applicable Name and Address of Partner Type of Interest Type of Units Number of Partnership Units Percentage Interest Xxxxx Xxxxxxxxxx 0000 Xxxxxxxxxx XxxxxxxxxXxxxx 0000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 1,223 Not applicable Exhibit B Allocations For purposes of this Exhibit B, the term “Partner” shall become subject to include the existing schedule and to potential forfeiture in the future for failure to vestSpecial Limited Partner. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (ia) The Company intends that each Each Class B Unit (such Class B Units, a “Profits Interest”), when issued, shall be treated as a separate “profits interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure343 and as a Safe Harbor Interest. (iib) The Class B Units are Profits Interests. In accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company Partnership shall treat a Member holding a Profits Interest holder of Class B Units as the owner of such Profits Interest Class B Units from the date it is such Class B Units are granted, and shall file its IRS form 1065Internal Revenue Service Form 1065 (or such successor form), and issue appropriate Schedule K-1s (or such successor schedules) to such Memberholder of Class B Units, allocating to such Member holder its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting such Class B Units as if it were fully vested. Each Member agrees to holder of Class B Units shall take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits InterestClass B Units. The Company and each Member agree not to Neither the Partnership nor any Partner shall claim a deduction (as wages, compensation or otherwise) for the Fair Market Value fair market value of such Profits Interest Class B Units issued to a Memberholder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time any unvested Profits Interest the Class B Units becomes substantially vested. The undertakings contained in this Section 17.4(b) shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. (iiic) The Company Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Partnership to make an election to value any Profits Interests at liquidation value (the “a Safe Harbor Election”), as Election with respect to the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”)Class B Units. Upon making such an election, the Company The Partnership shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viiid) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company Class B Units by a Memberholder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 2.2(f)17.4, in form satisfactory to the General Partner. (ixe) On the forfeiture The provisions of an unvested Class B Unit, the forfeited Class B Unit this Section 17.4 shall be cancelled. The Manager shall recompute the Percentage Interests apply regardless of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio whether or not such holder of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at files an election pursuant to Section 83(b) of the time Code. PREFERRED APARTMENT COMMUNITIES, INC. By: /s/ Jxxx X. Xxxxxxxx Name: Jxxx X. Xxxxxxxx Title: President and Chief Executive Officer PREFERRED APARTMENT ADVISORS, LLC By: NXXX Partners, Inc., its Member By: /s/ Jxxx X. Xxxxxxxx Name: Jxxx X. Xxxxxxxx Title: President and Chief Executive Officer PREFERRED APARTMENT ADVISORS, LLC By: NXXX Partners, Inc., its Member By: /s/ Jxxx X. Xxxxxxxx Name: Jxxx X. Xxxxxxxx Title: President and Chief Executive Officer Dated: ____________ __, 20___ [Name of reallocation Corporation/LLC] By: Name: Title: Dated: ____________ __, 20___ [Name of LP] By: Name: Title: Preferred Apartment Communities, Inc. General Partner Interest GP Units $ 109,998 36,666 0.708741 % 3000 Xxxxxxxxxx Xxxxxxxxx Xxxxx 000 Limited Partner Interest Series A Redeemable Preferred Units None Not applicable Not applicable Axxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units $ 51,363,514 5,136,733 99.291257 % Preferred Apartment Advisors, LLC Limited Partner Interest Class A Units $ 1 .1 0.000002 % 3000 Xxxxxxxxxx Xxxxxxxxx Xxxxx 000 Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units None Not applicable Not applicable Preferred Apartment Advisors, LLC 3000 Xxxxxxxxxx Xxxxxxxxx Xxxxx 000 Xxxxxxx, Xxxxxxx 00000 Special Limited Partner Interest None None Not applicable Not applicable For purposes of this Exhibit B, the term “Partner” shall become subject to include the existing schedule and to potential forfeiture in the future for failure to vestSpecial Limited Partner. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (ia) The Company intends that each Each Class B Unit (such Class B Units, a “Profits Interest”), when issued, shall be treated as a separate “profits interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure343 and as a Safe Harbor Interest. (iib) The Class B Units are Profits Interests. In accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company Partnership shall treat a Member holding a Profits Interest holder of Class B Units as the owner of such Profits Interest Class B Units from the date it is such Class B Units are granted, and shall file its IRS form 1065Internal Revenue Service Form 1065 (or such successor form), and issue appropriate Schedule K-1s (or such successor schedules) to such Memberholder of Class B Units, allocating to such Member holder its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting such Class B Units as if it were fully vested. Each Member agrees to holder of Class B Units shall take into account such distributive share in computing its federal income tax liability for the entire period during which it holds the Profits InterestClass B Units. The Company and each Member agree not to Neither the Partnership nor any Partner shall claim a deduction (as wages, compensation or otherwise) for the Fair Market Value fair market value of such Profits Interest Class B Units issued to a Memberholder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time any unvested Profits Interest the Class B Units becomes substantially vested. The undertakings contained in this Section 17.4(b) shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. (iiic) The Company Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Partnership to make an election to value any Profits Interests at liquidation value (the “a Safe Harbor Election”), as Election with respect to the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”)Class B Units. Upon making such an election, the Company The Partnership shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viiid) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company Class B Units by a Memberholder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 2.2(f)17.4, in form satisfactory to the General Partner. (ixe) On the forfeiture The provisions of an unvested Class B Unit, the forfeited Class B Unit this Section 17.4 shall be cancelled. The Manager shall recompute the Percentage Interests apply regardless of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio whether or not such holder of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit files an election pursuant to Section 83(b) of the Code. Signature Page to Sixth Amended and Restated Agreement of Limited Partnership of Preferred Apartment Communities Operating Partnership, L.P., among the undersigned and the other parties thereto. PREFERRED APARTMENT COMMUNITIES, INC. By: /s/ Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx Chief Executive Officer PREFERRED APARTMENT ADVISORS, LLC By: XXXX Partners, Inc., its Member By: /s/ Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx Chief Executive Officer The undersigned, solely in its capacity as Special Limited Partner, hereby (a) consents to and approves the amendment and restatement of the Fifth Amended and Restated Agreement, and (b) acknowledges and agrees that is not currently vested at it (i) ceases to be a Special Limited Partner in the time Partnership upon execution and delivery of reallocation shall become subject this Sixth Amended and Restated Agreement of Limited Partnership of Preferred Apartment Communities Operating Partnership, L.P., and (ii) has irrevovacably waived any entitlement to the existing schedule Special Limited Partnership Interest. PREFERRED APARTMENT ADVISORS, LLC By: XXXX Partners, Inc., its Member By: /s/ Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx Chief Executive Officer Corporate/Limited Liability Company Additional Limited Partner Signature Page to Sixth Amended and to potential forfeiture in Restated Agreement of Limited Partnership of Preferred Apartment Communities Operating Partnership, L.P., among the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, undersigned and the Company shall under no circumstances be liable for any such taxes.other parties thereto. Dated: ____________ __, 20___ [Name of Corporation/LLC] By: Name: Title: Individual Additional Limited Partner Signature Page to Sixth Amended and Restated Agreement of Limited Partnership of Preferred Apartment Communities Operating Partnership, L.P., among the undersigned and the other parties thereto. Dated: ____________ __, 20___ Name: Partnership Limited Partner Signature Page to Sixth Amended and Restated Agreement of Limited Partnership of Preferred Apartment Communities Operating Partnership, L.P., among the undersigned and the other parties thereto. Dated: ____________ __, 20___ [Name of Partnership] By: Name: Title: Name and Address of Partner Type of Interest Type of Units Number of Partnership Units Percentage Interest Preferred Apartment Communities, Xxx.0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 General Partner Interest GP Units 36,666 0.1508466% Limited Partner Interest Series APreferred Units 651,934 Not applicable Preferred Apartment Advisors, XXX0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units .1 0.0000004% WSW Holdings, LLC f/b/oWSW Holdings (WY), LLC f/b/o Xxxx X. Xxxxxxxx0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 67,437 Not applicable WSW Holdings, LLC f/b/oWSW Holdings (WY), LLC f/b/o Xxxxxxx X. Xxxxxxxxxxx 0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 52,451 Not applicable Xxxxxxx X. Xxxxxxx 0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 14,986 Not applicable Xxxxxxx X. Xxxxxx0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 14,986 Not applicable Xxxxxx X. DuPree3284 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 52,451 Not applicable Xxxxxxx X. Sprain3284 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 10,790 Not applicable Xxxxxxx X. Day3284 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 1,499 Not applicable Xxxx Cullen3284 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 2,998 Not applicable Xxxx X. Xxxxxxx0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 4,496 Not applicable Xxxxx Bartkowski3284 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class A Units 1,223 0.0050315% Xxxx Murphy3284 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 24,353 Not applicable Xxxx Xxxxxxx0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 2,998 Not applicable Xxxx Xxxxx Associates, LLLPc/o Xxxxxxx Whisenant5485 Xxxxx Xxxxx Xxxx, NWAtlanta, Georgia 30327 Limited Partner Interest Class A Units 419,228 1.7247343% Al Xxxxxxx0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 7,493 Not applicable Xxxxxx Xxxxxxxx Gayle3284 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 2,998 Not applicable Xxxxx Xxxxxxx0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 4,496 Not applicable Xxxxxxx Xxxxxxx0000 Xxxxxxxxx Xxxxxxx XXXxxxx 000Xxxxxxx, Xxxxxxx 00000 Limited Partner Interest Class B Units 1,499 Not applicable Xxxxxxx X Allocations

Profits Interests. (i) The Company intends Partnership and each Partner agree (i) that each Class B Unit (such Class B Units, a “Profits Interest”), when issued, the General Partner shall be permitted to issue an interest in the Partnership to any Partner intended to be treated as a separate “profits interestProfits Interests” with respect to the Partnership, within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits Interestsas clarified by Rev. Proc. In accordance with Revenue Procedure 2001-43, 2001-2 CB 34 I.R.B. 191, for federal income tax purposes, ; (ii) to treat any Profits Interests as such; and (iii) that the Company provisions of this Agreement shall be interpreted in a manner consistent with the intended status of any Profits Interest. (ii) Any Profits Interests issued by the Partnership shall be subject to the following provision: Absent a contrary determination by the General Partner based on a change in law governing the taxation of “profits interests”: (A) the Partnership and each Partner shall treat each Partnership interest granted to such Partner as a Member holding Profits Interest; (B) the Partnership and each Partner shall treat each holder of a Profits Interest as the owner of such Profits Interest interest from the date it such interest is granted, and shall file its IRS form 1065, and issue appropriate Schedule K-1s to granted until such Member, allocating to such Member its distributive share interest is forfeited or otherwise disposed of; (C) each holder of all items of income, gain, loss, deduction and credit associated with any a Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share of the Partnership’s income, gain, deduction and loss in computing its U.S. federal income tax liability for the entire period during which it holds the such Profits Interest. The Company ; and (D) each Member agree Partner agrees not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value in respect of such any Profits Interest issued to a Member, either at the time of upon grant or vesting of the Profits Interest or at Interest. Upon a change in law governing the time any unvested Profits Interest becomes substantially vested. (iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the taxation of “Safe Harbor Election”), profits interests,” each Partner shall take such actions as the same may be permitted pursuant requested by the Partnership in response to or such change in accordance with law, including agreeing to amend this Agreement in a manner the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) General Partner deems necessary or appropriate to effectuate reflect such change in law and maintain the Safe Harbor Election. (iv) Any reporting any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made matters in their income tax returns as determined by the Company while a Safe Harbor Election is General Partner. Notwithstanding anything in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor this Agreement to the Proposed Rules contrary, the General Partner is hereby authorized and empowered, without further vote or any other applicable rule. (v) Each Member (including any person action of the Partners, to whom a Profits Interest is Transferred in connection with the performance of services), by signing amend this Agreement as it deems necessary or by accepting such Transfer, hereby agrees appropriate to comply with all the requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Companyof, acting under the control of the Manageror address changes to, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, law applicable to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient taxation of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f)“profits interests. (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.”

Profits Interests. (ia) The Company intends that each Class B Unit (such Class B Units, a “Profits Interest”), when issued, All Profit Units are anticipated to be treated as a separate “profits interestinterests” (within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or 343 (1993))) for U.S. federal income tax purposes with the recipient’s participation limited to the income and asset appreciation of the Company arising after the date of issuance of any future IRS guidance or other authority that supplements or supersedes such Profit Units. Additional Profit Units may be issued as determined by the foregoing Revenue ProcedureManager and shall be issued pursuant to a Unit Award Agreement. (iib) The Class B All Profit Units are Profits Interestswill be subject in all respects to the terms of any applicable award agreement entered into in connection with the grant or issuance of such Profit Units, including, without limitation, provisions in any applicable award agreement providing for vesting, forfeiture and repurchase with respect to the Profit Units. (c) Immediately upon receipt of Profit Units, the Member will have no initial Capital Account balance and the Profit Units received shall not entitle such Person to any portion of the capital of the Company at the time of such Person’s admission to the Company as a Member, such that if the Company’s assets were sold at Fair Market Value immediately after the grant to such Member of Profit Units and the proceeds distributed in complete liquidation of the Company, the Profit Units so received would entitle such Member to receive no share of those proceeds. In accordance connection with Revenue Procedure any issuance of Profit Units, the Capital Accounts of the then existing Members shall be adjusted to reflect the Liquidation Value. (d) Upon the issuance of any Profit Units, the Company shall specify the “Participation Threshold” applicable to such Profit Units. The Participation Threshold for Profit Units shall mean an amount equal to the Liquidation Value of the Company as of the date of issuance; provided, however, the Participation Threshold shall not be less than zero dollars ($0). The grant of Profit Units that is intended to constitute a profits interest to a Member is intended to comply with Rev. Proc. 93-27, 1993-2 CB 343 (1993) and Rev. Proc. 2001-43, 2001-2 CB 191, for federal income tax purposes191 (2001) and shall be interpreted consistently therewith. (e) In connection with the issuance of any Profit Units, the Company shall treat a Member holding a Profits Interest as Manager is hereby authorized and directed to elect to apply the owner of such Profits Interest from the date it is granted, and shall file its IRS form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with any Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share safe harbor set forth in computing its federal income tax liability for the entire period during Proposed Treasury Regulation § 1.83-3(1) (under which it holds the Profits Interest. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value of such Profits Interest issued to a Member, either at the time of grant of the Profits Interest or at the time any unvested Profits Interest becomes substantially vested. (iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the “Safe Harbor Election”), as the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred Profit Units that are granted in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees services is treated as being equal to comply with all requirements the Liquidation Value of that interest) and to file a “liquidation value” election pursuant to Section 83(b) of the Safe Harbor Election Code with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. Profit Units (vi) The Company, acting under pursuant to Treasury Notice 2005-43 and any succeeding guidance or authority issued by the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election Internal Revenue Service with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(fthereto). (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.

Profits Interests. (i) The Company intends that and each Class B Unit (such Class B Units, a “Member agree to treat each Profits Interest”), when issued, be treated Interest as a separate “profits interest” within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343. Notwithstanding anything herein to the contrary, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure. distributions in respect of Profits Interests pursuant to Section 6.2(c) (ii) The Class B Units are solely with respect to such Member’s Profits Interests) shall be limited to the extent necessary so that each Profits Interest qualifies as a “profits interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. In the event that distributions to a Member pursuant to Section 6.2(c) are limited as a result of the preceding sentence, the Managing Member is authorized to adjust future distributions to the Member in the manner it deems appropriate so that, after such adjustments are made, each Member receives, to the maximum extent possible, an amount of distributions equal to the amount of distributions such Member would have received were such sentence not part of this Agreement; provided, however, that any such adjustment to distributions shall be consistent with the treatment of the Profits Interests as “profits interests”. Additionally, in accordance with Revenue Procedure Rev. Proc. 2001-43, 2001-2 CB C.B. 191, for federal income tax purposes, the Company shall treat a Member holding a Profits Interest Interests as the owner of such Profits Interest Interests from the date it is grantedof grant, and shall file its IRS form Form 1065, and issue appropriate Schedule K-1s to such Member, allocating to such Member its distributive share of all items of income, gain, loss, deduction and credit associated with any such Profits Interest subject to vesting as if it were fully vested. Each Member holding Profits Interests agrees to take into account such distributive share in computing its U.S. federal income tax liability for the entire period during which it holds the Profits InterestInterests. The Company and each Member agree not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value of such Profits Interest Interests issued to a Member, either at the time of grant of the Profits Interest or at the time any unvested the Profits Interest becomes substantially vested. (iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the “Safe Harbor Election”), as the same may be permitted pursuant to or in accordance with the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Election. (iv) Any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made by the Company while a Safe Harbor Election is in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor to the Proposed Rules or any other applicable rule. (v) Each Member (including any person to whom a Profits Interest is Transferred in connection with the performance of services), by signing this Agreement or by accepting such Transfer, hereby agrees to comply with all requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Company, acting under the control of the Manager, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f). (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing undertakings contained in this Section 2.2(f5.1(e) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting in accordance with Section 4 of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.Rev. Proc. 2001-

Profits Interests. (i) The Company intends Partnership and each Partner agree (i) that each Class B Unit (such Class B Units, the General Partner shall be permitted to issue a “Profits Interest”), when issued, Partnership interest to any Partner intended to be treated as a separate “profits interestProfits Interests” with respect to the Partnership, within the meaning of Revenue Procedure Rev. Proc. 93-27, 1993-2 C.B. 343, or any future IRS guidance or other authority that supplements or supersedes the foregoing Revenue Procedure. (ii) The Class B Units are Profits Interestsas clarified by Rev. Proc. In accordance with Revenue Procedure 2001-43, 2001-2 CB 34 I.R.B. 191, for federal income tax purposes, ; (ii) to treat any Profits Interests as such; and (iii) that the Company provisions of this Agreement shall be interpreted in a manner consistent with the intended status of any Profits Interest. (ii) Any Profits Interests issued by the Partnership shall be subject to the following provision: Absent a contrary determination by the General Partner based on a change in law governing the taxation of “profits interests”: (A) the Partnership and each Partner shall treat each Partnership interest granted to such Partner as a Member holding Profits 701158.0018 4830-3854-5382 v5 Interest; (B) the Partnership and each Partner shall treat each holder of a Profits Interest as the owner of such Profits Interest interest from the date it such interest is granted, and shall file its IRS form 1065, and issue appropriate Schedule K-1s to granted until such Member, allocating to such Member its distributive share interest is forfeited or otherwise disposed of; (C) each holder of all items of income, gain, loss, deduction and credit associated with any a Profits Interest subject to vesting as if it were fully vested. Each Member agrees to take into account such distributive share of the Partnership’s income, gain, deduction and loss in computing its U.S. federal income tax liability for the entire period during which it holds the such Profits Interest. The Company ; and (D) each Member agree Partner agrees not to claim a deduction (as wages, compensation or otherwise) for the Fair Market Value in respect of such any Profits Interest issued to a Member, either at the time of upon grant or vesting of the Profits Interest or at Interest. Upon a change in law governing the time any unvested Profits Interest becomes substantially vested. (iii) The Company is hereby authorized to make an election to value any Profits Interests at liquidation value (the taxation of “Safe Harbor Election”), profits interests,” each Partner shall take such actions as the same may be permitted pursuant requested by the Partnership in response to or such change in accordance with law, including agreeing to amend this Agreement in a manner the finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectively, the “Proposed Rules”). Upon making such an election, the Company shall make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) General Partner deems necessary or appropriate to effectuate reflect such change in law and maintain the Safe Harbor Election. (iv) Any reporting any such Safe Harbor Election shall be binding on the Company and on all of its Members with respect to all Transfers of Profits Interests made matters in their income tax returns as determined by the Company while a Safe Harbor Election is General Partner. Notwithstanding anything in effect. A Safe Harbor Election once made may be revoked by the Company as permitted by the finally promulgated successor this Agreement to the Proposed Rules contrary, the General Partner is hereby authorized and empowered, without further vote or any other applicable rule. (v) Each Member (including any person action of the Partners, to whom a Profits Interest is Transferred in connection with the performance of services), by signing amend this Agreement as it deems necessary or by accepting such Transfer, hereby agrees appropriate to comply with all the requirements of the Safe Harbor Election with respect to all Profits Interests Transferred while the Safe Harbor Election remains effective. (vi) The Companyof, acting under the control of the Manageror address changes to, shall file all returns, reports and other documentation as may be required to perfect and maintain any Safe Harbor Election with respect to Transfers of Profits Interests covered by such Safe Harbor Election. (vii) Each Member agrees to cooperate with the Company to perfect and maintain any Safe Harbor Election that the Company elects to make, and to timely execute and deliver any documentation with respect thereto reasonably requested by the Company. (viii) Without limitation of any other provision herein, no Transfer of any Profits Interest in the Company by a Member, law applicable to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient taxation of such Profits Interest shall have agreed in writing to be bound by the provisions of this Section 2.2(f)“profits interests. (ix) On the forfeiture of an unvested Class B Unit, the forfeited Class B Unit shall be cancelled. The Manager shall recompute the Percentage Interests of the Members, so that the Percentage Interest associated with forfeited Class B Units is reallocated among the remaining outstanding Class A Units and Class B Units. The Manager shall reallocate this forfeited Percentage Interest among the remaining outstanding Class A Units and Class B Units pro rata in accordance with the ratio of the Percentage Interests held by each of these Members to all outstanding Percentage Interests in such a manner that the sum of all outstanding Percentage Interests shall total 100%. The current Percentage Interest held by each Member, as determined and recomputed by the Manager, shall be computed by the Manager and set forth in the books and records of the Company. The Manager from time to time shall amend Exhibit B to show the current Percentage Interests held by the Members. Any portion of the Percentage Interest allocated to a Class B Unit that is not currently vested at the time of reallocation shall become subject to the existing schedule and to potential forfeiture in the future for failure to vest. (x) Nothing in this Section 2.2(f) shall be construed as imposing any liability on the Company for any Member’s taxes resulting from the receipt, ownership or vesting of Membership Interests issued in connection with the performance of services, and the Company shall under no circumstances be liable for any such taxes.”