Common use of Profits Interests Clause in Contracts

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) as a separate “Profits Interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest 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 Rev. Proc. 2001-43, 2001-2 CB 191, the Company shall treat a Member holding an Incentive Unit as the owner of such Unit 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 such Profits Interest 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 of such Profits Interest issued to an Incentive Member, either at the time of grant of the Profits Interest or at the time 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. (b) (i) The Board of Managers is hereby authorized and directed to cause the Company to make an election to value any 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”). The Board of Managers shall cause the Company 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.

Profits Interests. (ai) The Company Partnership and each Member Partner agree (i) that the General Partner shall be permitted to treat each Incentive Member’s Incentive Units (such interest, a issue an interest in the Partnership to any Partner intended to be treated as “Profits Interest”) as a separate “Profits InterestInterests” with respect to the Partnership, within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest 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 clarified by Rev. Proc. 2001-43, 2001-2 CB 34 I.R.B. 191, ; (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 an Incentive Unit Profits Interest; (B) the Partnership and each Partner shall treat each holder of a Profits Interest as the owner of such Unit 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 such a Profits Interest as if it were fully vested. Each Incentive 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 an Incentive 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 the Profits Interest becomes substantially vestedGeneral Partner. The undertakings contained Notwithstanding anything in this Section 3.08 shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. Each Incentive Member shall be required Agreement 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. (b) (i) The Board of Managers contrary, the General Partner is hereby authorized and directed empowered, without further vote or action of the Partners, to cause the Company to make an election to value any Incentive Units issued by the Company amend this Agreement 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”). The Board of Managers shall cause the Company to make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) it deems necessary or appropriate to effectuate comply with the requirements of, or address changes to, any law applicable to the taxation of “profits interests.” (iii) The Partnership and maintain each Partner agree that each Partner will only receive distributions in respect of Operating Profit to the Safe Harbor Electionextent that the amounts included in such Operating Profits are determined by the General Partner in its sole discretion to be (a) sourced out of appreciation in the assets of the Fund after the date each such Partner’s admission to the Partnership or (b) otherwise consistent with the treatment of each such Partner’s Points as profits interests for U.S. federal income tax purposes.

Profits Interests. (ai) The Company and intends that each Member agree to treat each Incentive Member’s Incentive Units Class B Unit (such interestClass B Units, a “Profits Interest”) ), when issued, be treated as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. Revenue Procedure 93-27, 1993-2 C.B. 343, and it is or any future IRS guidance or other authority that supplements or supersedes the intention of the Company and the Members that distributions to each Incentive Member foregoing Revenue Procedure. (including any additional Incentive Members, if anyii) pursuant to Section 5.02 be limited to the extent necessary so that the The Class B Units are Profits Interest of such Incentive Member qualifies as a “Profits Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordinglyInterests. 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 Rev. Proc. Revenue Procedure 2001-43, 2001-2 CB 191, for federal income tax purposes, the Company shall treat a Member holding an Incentive Unit a Profits Interest as the owner of such Unit Profits Interest 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 such any 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 an Incentive a Member, either at the time of grant of the Profits Interest or at the time the any unvested 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. (b) (iiii) The Board of Managers Company is hereby authorized and directed to cause the Company to make an election to value any Incentive Units issued by the Company as compensation for services to the Company (collectively, “Compensatory Interests”) 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”). The Board of Managers shall cause Upon making such an election, the Company to 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. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) Each Class B Unit shall be treated as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, 343 and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest of such Incentive Member qualifies as a “Profits Safe Harbor Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. . (b) 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 Rev. Proc. 2001-43, 2001-2 CB 191, the Company Partnership shall treat a Member holding an Incentive Unit holder of Class B Units as the owner of such Unit Class B Units from the date it is such Class B Units are granted, and shall file its IRS Internal Revenue Service Form 10651065 (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 such Profits Interest Class B Units as if it were fully vested. Each Incentive 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 of such Profits Interest Class B Units issued to an Incentive Membera holder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time the Profits Interest Class B Units becomes substantially vested. The undertakings contained in this Section 3.08 17.4(b) 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. (bc) (i) The Board of Managers Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Company Partnership to make an election to value any Incentive Units issued by the Company as compensation for services a Safe Harbor Election with respect 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”)Class B Units. The Board of Managers Partnership shall cause the Company 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. (d) Without limitation of any other provision herein, no Transfer of any Class B Units by a holder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 17.4, in form satisfactory to the General Partner. (e) The provisions of this Section 17.4 shall apply regardless of whether or not such holder of a Class B Unit files an election pursuant to Section 83(b) of the 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 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 include the Special Limited Partner.

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) as a separate “Profits Interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest 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 Rev. Proc. 2001-43, 2001-2 CB 191, the Company shall treat a Member holding an Incentive Unit as the owner of such Unit 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 such Profits Interest 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 of such Profits Interest issued to an Incentive Member, either at the time of grant of the Profits Interest or at the time 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. (b) (i) The Board of Managers is hereby authorized and directed to cause the Company to make an election to value any 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”). The Board of Managers shall cause the Company 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.

Profits Interests. (ai) The Company Class A-1 Units and each Member agree Class B Units issued hereunder are intended to treat each Incentive Member’s Incentive Units (such interest, a qualify and shall be treated under this Agreement as “Profits Interest”) as a separate “Profits Interestprofits interests” within the meaning of Rev. Proc. Revenue Procedure 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest 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 Rev. Proc. clarified by Revenue Procedure 2001-43, 2001-2 CB C.B. 191. As such, none 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 an Incentive Unit as the owner “profits interests” for all purposes of this Agreement in respect of such 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 from 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, loss or deduction and credit associated with such Profits Interest 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 of such Profits Interest issued to an Incentive Member, either at the time of grant of the Profits Interest or at the time 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 allocated to such Member shall be if and to the extent required by final Treasury Regulations promulgated after the date hereof to file an election pursuant to Section 83(b) of the Code (a “Section 83(b) Election”) ensure that allocations made with respect to its Incentive Units no later than ten days after receipt all “substantially nonvested” Interests of Members are recognized under Code Section 704(b). (v) Each recipient of a Class B Unit hereunder hereby agrees that such recipient shall make a valid and timely election in respect of such Incentive Units. The provisions of this Section 3.08 shall apply regardless of whether or not an Incentive Member files a Unit, upon receipt thereof, pursuant to Code Section 83(b), and shall provide the Company with an executed copy of such election, except to the extent the Board determines that such Class B Units are not subject to a “substantial risk of forfeiture” within the meaning of Code Section 83(a) Election and the Treasury Regulations thereunder. (vi) Allocations of income or loss pursuant to Article 4 shall be made with respect to its Incentive Class B Units. , whether vested or unvested. Any distributions pursuant to Article 5 hereof with respect to unvested Class B Units (bother than distributions under Section 5.3) (i) The Board shall not be made to the holders of Managers is hereby authorized and directed such unvested Class B Units until such Units vest, at which time any such distributions shall be made to cause the Company holder of such then vested Class B Units. Any distributions pursuant to make an election to value any Incentive the foregoing sentence that are forfeited as a result of the forfeiture without vesting of the applicable Class B Units issued shall thereafter be retained and/or distributed in a manner consistent with the distribution priorities set forth in Article 5 as determined 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”). The Board of Managers shall cause the Company 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 ElectionBoard.

Profits Interests. (ai) The Company Partnership and each Member Partner agree (i) that the General Partner shall be permitted to treat each Incentive Member’s Incentive Units (such interest, a issue an interest in the Partnership to any Partner intended to be treated as “Profits Interest”) as a separate “Profits InterestInterests” with respect to the Partnership, within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest 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 clarified by Rev. Proc. 2001-43, 2001-2 CB 34 I.R.B. 191, ; (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 an Incentive Unit Profits Interest; (B) the Partnership and each Partner shall treat each holder of a Profits Interest as the owner of such Unit 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 such a Profits Interest as if it were fully vested. Each Incentive 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 an Incentive 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 the Profits Interest becomes substantially vestedGeneral Partner. The undertakings contained Notwithstanding anything in this Section 3.08 shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. Each Incentive Member shall be required Agreement 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. (b) (i) The Board of Managers contrary, the General Partner is hereby authorized and directed empowered, without further vote or action of the Partners, to cause the Company to make an election to value any Incentive Units issued by the Company amend this Agreement 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”). The Board of Managers shall cause the Company to make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) it deems necessary or appropriate to effectuate and maintain comply with the Safe Harbor Electionrequirements of, or address changes to, any law applicable to the taxation of “profits interests.”

Profits Interests. (a) The Company and each Member agree All Profit Units are anticipated to treat each Incentive Member’s Incentive Units be “profits interests” (such interest, a “Profits Interest”) as a separate “Profits Interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, 343 (1993))) for U.S. federal income tax purposes with the recipient’s participation limited to the income and it is the intention asset appreciation of the Company arising after the date of issuance of any such Profit Units. Additional Profit Units may be issued as determined by the Manager and shall be issued pursuant to a Unit Award Agreement. (b) All Profit Units will 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 Members that distributions Profit Units received shall not entitle such Person to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited portion of the capital of the Company at the time of such Person’s admission to the extent necessary so that the Profits Interest of such Incentive Member qualifies 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 connection with 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 “Profits InterestParticipation Threshold” under 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 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 Rev. Proc. 2001-43, 2001-2 CB 191191 (2001) and shall be interpreted consistently therewith. (e) In connection with the issuance of any Profit Units, the Company shall treat a Member holding an Incentive Unit as Manager is hereby authorized and directed to elect to apply the owner safe harbor set forth in Proposed Treasury Regulation § 1.83-3(1) (under which the Fair Market Value of such Unit from Profit Units that are granted in connection with the date it performance of services is granted, treated as being equal to the Liquidation Value of that interest) 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 such Profits Interest 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 of such Profits Interest issued to an Incentive Member, either at the time of grant of the Profits Interest or at the time 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 a “liquidation value” election pursuant to Section 83(b) of the Code (a “Section 83(b) Election”) with respect to its Incentive the Profit 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. (b) (i) The Board of Managers is hereby authorized and directed to cause the Company to make an election to value any 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 Treasury Notice 2005-43 (collectively, and any succeeding guidance or authority issued by the “Proposed Rules”Internal Revenue Service with respect thereto). The Board of Managers shall cause the Company 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.

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) Each Class B Unit shall be treated as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, 343 and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest of such Incentive Member qualifies as a “Profits Safe Harbor Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. . (b) 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 Rev. Proc. 2001-43, 2001-2 CB 191, the Company Partnership shall treat a Member holding an Incentive Unit holder of Class B Units as the owner of such Unit Class B Units from the date it is such Class B Units are granted, and shall file its IRS Internal Revenue Service Form 10651065 (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 such Profits Interest Class B Units as if it were fully vested. Each Incentive 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 of such Profits Interest Class B Units issued to an Incentive Membera holder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time the Profits Interest Class B Units becomes substantially vested. The undertakings contained in this Section 3.08 17.4(b) 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. (bc) (i) The Board of Managers Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Company Partnership to make an election to value any Incentive Units issued by the Company as compensation for services a Safe Harbor Election with respect 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”)Class B Units. The Board of Managers Partnership shall cause the Company 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. (d) Without limitation of any other provision herein, no Transfer of any Class B Units by a holder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 17.4, in form satisfactory to the General Partner. (e) The provisions of this Section 17.4 shall apply regardless of whether or not such holder of a Class B Unit files an election pursuant to Section 83(b) of the 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 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 include the Special Limited Partner.

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) Interest as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343. Notwithstanding anything herein to the contrary, and it is the intention distributions in respect of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) Profits Interests pursuant to Section 5.02 6.2(c) (solely with respect to such Member’s Profits Interests) shall be limited to the extent necessary so that the each Profits Interest of such Incentive Member qualifies as a “Profits Interestprofits 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 6.2(c) are limited as a result of the first sentence of this Section 3.08preceding sentence, the Board of Managers Managing Member is authorized to adjust future distributions to the Members Member in whatever the 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; 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 Rev. Proc. 2001-43, 2001-2 CB C.B. 191, the Company shall treat a Member holding an Incentive Unit Profits Interests as the owner of such Unit Profits Interests from the date it is grantedof grant, 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 such Profits Interest as if it were fully vested. Each Incentive 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 Fair Market Value of such Profits Interest Interests issued to an Incentive a Member, either at the time of grant of the Profits Interest or at the time the Profits Interest becomes substantially vested. The undertakings contained in this Section 3.08 5.1(e) 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. (b) (i) The Board of Managers is hereby authorized and directed to cause the Company to make an election to value any 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”). The Board of Managers shall cause the Company 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.2001-

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) Each Class B Unit shall be treated as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, 343 and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest of such Incentive Member qualifies as a “Profits Safe Harbor Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. . (b) 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 Rev. Proc. 2001-43, 2001-2 CB 191, the Company Partnership shall treat a Member holding an Incentive Unit holder of Class B Units as the owner of such Unit Class B Units from the date it is such Class B Units are granted, and shall file its IRS Internal Revenue Service Form 10651065 (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 such Profits Interest Class B Units as if it were fully vested. Each Incentive 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 of such Profits Interest Class B Units issued to an Incentive Membera holder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time the Profits Interest Class B Units becomes substantially vested. The undertakings contained in this Section 3.08 17.4(b) 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. (bc) (i) The Board of Managers Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Company Partnership to make an election to value any Incentive Units issued by the Company as compensation for services a Safe Harbor Election with respect 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”)Class B Units. The Board of Managers Partnership shall cause the Company 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. (d) Without limitation of any other provision herein, no Transfer of any Class B Units by a holder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 17.4, in form satisfactory to the General Partner. (e) The provisions of this Section 17.4 shall apply regardless of whether or not such holder of 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 it (i) ceases to be a Special Limited Partner in the Partnership upon execution and delivery of 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 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 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 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. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) Each Class B Unit shall be treated as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, 343 and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest of such Incentive Member qualifies as a “Profits Safe Harbor Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. . (b) 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 Rev. Proc. 2001-43, 2001-2 CB 191, the Company Partnership shall treat a Member holding an Incentive Unit holder of Class B Units as the owner of such Unit Class B Units from the date it is such Class B Units are granted, and shall file its IRS Internal Revenue Service Form 10651065 (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 such Profits Interest Class B Units as if it were fully vested. Each Incentive 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 of such Profits Interest Class B Units issued to an Incentive Membera holder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time the Profits Interest Class B Units becomes substantially vested. The undertakings contained in this Section 3.08 17.4(b) 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. (bc) (i) The Board of Managers Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Company Partnership to make an election to value any Incentive Units issued by the Company as compensation for services a Safe Harbor Election with respect 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”)Class B Units. The Board of Managers Partnership shall cause the Company 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. (d) Without limitation of any other provision herein, no Transfer of any Class B Units by a holder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 17.4, in form satisfactory to the General Partner. (e) The provisions of this Section 17.4 shall apply regardless of whether or not such holder of a Class B Unit files an election pursuant to Section 83(b) of the 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 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 include the Special Limited Partner.

Profits Interests. (ai) The Company Partnership and each Member Partner agree (i) that the General Partner shall be permitted to treat each Incentive Member’s Incentive Units (such interest, issue a Partnership interest to any Partner intended to be treated as “Profits Interest”) as a separate “Profits InterestInterests” with respect to the Partnership, within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest 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 clarified by Rev. Proc. 2001-43, 2001-2 CB 34 I.R.B. 191, ; (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 an Incentive Unit 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 Unit 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 such a Profits Interest as if it were fully vested. Each Incentive 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 an Incentive 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 the Profits Interest becomes substantially vestedGeneral Partner. The undertakings contained Notwithstanding anything in this Section 3.08 shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. Each Incentive Member shall be required Agreement 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. (b) (i) The Board of Managers contrary, the General Partner is hereby authorized and directed empowered, without further vote or action of the Partners, to cause the Company to make an election to value any Incentive Units issued by the Company amend this Agreement 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”). The Board of Managers shall cause the Company to make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) it deems necessary or appropriate to effectuate and maintain comply with the Safe Harbor Electionrequirements of, or address changes to, any law applicable to the taxation of “profits interests.”

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) Each Class B Unit shall be treated as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, 343 and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest of such Incentive Member qualifies as a “Profits Safe Harbor Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. . (b) 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 Rev. Proc. 2001-43, 2001-2 CB 191, the Company Partnership shall treat a Member holding an Incentive Unit holder of Class B Units as the owner of such Unit Class B Units from the date it is such Class B Units are granted, and shall file its IRS Internal Revenue Service Form 10651065 (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 such Profits Interest Class B Units as if it were fully vested. Each Incentive 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 of such Profits Interest Class B Units issued to an Incentive Membera holder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time the Profits Interest Class B Units becomes substantially vested. The undertakings contained in this Section 3.08 18.4(b) 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. (bc) (i) The Board of Managers Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Company Partnership to make an election to value any Incentive Units issued by the Company as compensation for services a Safe Harbor Election with respect 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”)Class B Units. The Board of Managers Partnership shall cause the Company 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. (d) Without limitation of any other provision herein, no Transfer of any Class B Units by a holder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 18.4, in form satisfactory to the General Partner. (e) The provisions of this Section 18.4 shall apply regardless of whether or not such holder of a Class B Unit files an election pursuant to Section 83(b) of the 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 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 include the Special Limited Partner.

Profits Interests. (a) The Company and each Member agree to treat each Incentive Member’s Incentive Units (such interest, a “Profits Interest”) Each Class B Unit shall be treated as a separate “Profits Interestprofits interest” within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, 343 and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest of such Incentive Member qualifies as a “Profits Safe Harbor Interest” under Rev. Proc. 93-27, and this Agreement shall be interpreted accordingly. . (b) 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 Rev. Proc. 2001-43, 2001-2 CB 191, the Company Partnership shall treat a Member holding an Incentive Unit holder of Class B Units as the owner of such Unit Class B Units from the date it is such Class B Units are granted, and shall file its IRS Internal Revenue Service Form 10651065 (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 such Profits Interest Class B Units as if it were fully vested. Each Incentive 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 of such Profits Interest Class B Units issued to an Incentive Membera holder of such Class B Units, either at the time of grant of the Profits Interest Class B Units or at the time the Profits Interest Class B Units becomes substantially vested. The undertakings contained in this Section 3.08 17.4(b) 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. (bc) (i) The Board of Managers Notwithstanding anything in this Agreement to the contrary, the General Partner is hereby authorized and directed in its sole determination to cause the Company Partnership to make an election to value any Incentive Units issued by the Company as compensation for services a Safe Harbor Election with respect 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”)Class B Units. The Board of Managers Partnership shall cause the Company 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. (d) Without limitation of any other provision herein, no Transfer of any Class B Units by a holder thereof, to the extent permitted by this Agreement, shall be effective unless prior to such Transfer, the transferee, assignee or intended recipient of such Class B Units shall have agreed in writing to be bound by the provisions of Section 10.2(d) and this Section 17.4, in form satisfactory to the General Partner. (e) The provisions of this Section 17.4 shall apply regardless of whether or not such holder of a Class B Unit files an election pursuant to Section 83(b) of the 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 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 include the Special Limited Partner.

Profits Interests. (a) The 3.8.1 From and after the Effective Date, with the prior approval of the Board, the Company and each Member agree may from time to treat each Incentive Member’s time issue Management Incentive Units (such interest, a from and to the extent of the Management Pool. The Management Incentive Units are intended to constitute “Profits Interest”) as a separate “Profits Interestprofits interests” within the meaning of Rev. Proc. Revenue Procedure 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest 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 Rev. Proc. clarified by Revenue Procedure 2001-43, 2001-2 CB C.B. 191, the Company . The Management Incentive Units are interests solely in profits and shall treat a Member holding an Incentive Unit as the owner of such Unit 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 such Profits Interest 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 of such Profits Interest issued to an Incentive 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 of its grant, the Profits Interest becomes substantially vested. The undertakings contained in this Section 3.08 Board shall establish a “participation threshold” amount for such Management Incentive Unit which shall be construed 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) each Member were to pay to the Company at that time the amount of any obligation then unconditionally due to the Company, and (iv) the Company were to distribute any remaining cash and other proceeds to the Members in accordance with the distribution provisions of Section 4 8.5.1; provided, however, that the Participation Threshold shall not be less than zero dollars. As of Rev. Procthe Effective Date, the Participation Threshold for each of the then outstanding Management Incentive Units is set forth in Schedule A to Exhibit A. The Board may equitably adjust the Participation Thresholds of the outstanding Management Incentive Units to the extent the Board determines necessary or appropriate to preserve the economic 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. Each Incentive Member shall be required to Within thirty (30) days following the receipt of any Unvested Units on or after the date hereof, each holder of such Unvested Units will file with the Internal Revenue Service an election pursuant to authorized by Code Section 83(b) of the Code (a “Section 83(b) Election”) with respect to such Unvested Units and will deliver to the Company a copy of such election promptly after its Incentive 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 no later than ten days on or after the date hereof shall result in the immediate forfeiture of such Unvested Units on the thirty-first (31st) day following such holder’s 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 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) (bunder 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 Board of Managers the Company is hereby authorized and directed to cause elect the safe harbor, (ii) the Company and each of its Members (including any Person to whom a Membership Interest is transferred in connection with the performance of services) agrees to comply with all requirements of the safe harbor with respect to all interests transferred in connection with the performance of services while such election remains in effect and (iii) the Company and each of its Members agree to take all actions necessary, including providing the Company with any required information, to permit the Company to make an comply with the requirements set forth or referred to in the applicable Regulations for such election to value any Incentive Units issued by be effective. The Members authorize the Company as compensation for services Board to amend this Agreement to modify Article 5 (Allocations of Net Profits and Net Losses) to the Company (collectivelyextent the Board determines in its discretion that such modification is necessary or desirable as a result of the issuance of Regulations relating to the tax treatment of the transfer of an interest in connection with the performance of services. Notwithstanding anything to the contrary in this Agreement, “Compensatory Interests”) at liquidation value (the “Safe Harbor Election”), as Board shall not be required to obtain the same may be permitted pursuant Members’ consent to or 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 finally promulgated successor rules to Proposed Regulations Section 1.83-3(l) and IRS Notice 2005-43 (collectivelyavoidance of doubt, the “Proposed Rules”). The Board of Managers shall cause neither the Company to make nor any allocations Member of items the Company is providing any covenant or guarantee that the characterization of income, gain, deduction, loss the Management Incentive Units as “profits interests” as described in this Section 3.8 shall be accepted by any government authority or credit (including forfeiture allocations and elections as to allocation periods) necessary or appropriate to effectuate and maintain the Safe Harbor Electiona court of law.

Profits Interests. (a) i. The Company Partnership and each Member Partner agree (i) that the General Partner shall be permitted to treat each Incentive Member’s Incentive Units (such interest, a issue an interest in the Partnership to any Partner intended to be treated as “Profits Interest”) as a separate “Profits InterestInterests” with respect to the Partnership, within the meaning of Rev. Proc. 93-27, 1993-2 C.B. 343, and it is the intention of the Company and the Members that distributions to each Incentive Member (including any additional Incentive Members, if any) pursuant to Section 5.02 be limited to the extent necessary so that the Profits Interest 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 clarified by Rev. Proc. 2001-43, 2001-2 CB 34 I.R.B. 191, ; (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 an Incentive Unit Profits Interest; (B) the Partnership and each Partner shall treat each holder of a Profits Interest as the owner of such Unit 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 such a Profits Interest as if it were fully vested. Each Incentive 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 an Incentive 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 the Profits Interest becomes substantially vestedGeneral Partner. The undertakings contained Notwithstanding anything in this Section 3.08 shall be construed in accordance with Section 4 of Rev. Proc. 2001-43. Each Incentive Member shall be required Agreement 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. (b) (i) The Board of Managers contrary, the General Partner is hereby authorized and directed empowered, without further vote or action of the Partners, to cause the Company to make an election to value any Incentive Units issued by the Company amend this Agreement 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”). The Board of Managers shall cause the Company to make any allocations of items of income, gain, deduction, loss or credit (including forfeiture allocations and elections as to allocation periods) it deems necessary or appropriate to effectuate and maintain comply with the Safe Harbor Electionrequirements of, or address changes to, any law applicable to the taxation of “profits interests.”