FIFTH AMENDED AND RESTATED MANAGEMENT AGREEMENT

among

Preferred Apartment Communities, Inc.,

Preferred Apartment Communities Operating Partnership, L.P.

and

Preferred Apartment Advisors, LLC

Effective as of January 1, 2015

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TABLE OF CONTENTS
Page
Section 1.    Definitions.    1
Section 2.    Appointment and Duties of the Manager.    6
Section 3.    Conduct Policies.    12
Section 4.    Additional Activities of the Manager; Non-Solicitation;
Restrictions.    12
Section 5.    Bank Accounts.    13
Section 6.    Records; Confidentiality.    14
Section 7.    Compensation.    15
Section 8.    Expenses of the Company.    17
Section 9.    Limits of the Manager’s Responsibility; Indemnification.    19
Section 10.    No Joint Venture.    21
Section 11.    Term; Renewal; Termination Without Cause.    21
Section 12.    Assignments.    22
Section 13.    Termination for Cause.    23
Section 14.    Action Upon Termination.    24
Section 15.    Release of Money or Other Property Upon Written Request.    24
Section 16.    Miscellaneous.    25

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This FIFTH AMENDED AND RESTATED MANAGEMENT AGREEMENT effective as of January 1,
2015 is entered into as of December 31, 2014, among Preferred Apartment
Communities, Inc., a Maryland corporation (“PAC”), Preferred Apartment
Communities Operating Partnership, L.P., a Delaware limited partnership (the
“Operating Partnership”), and Preferred Apartment Advisors, LLC, a Delaware
limited liability company (the “Manager”).
W I T N E S S E T H:
WHEREAS, the parties entered into the Management Agreement on November 19, 2010
(the “Original Agreement”), amended and restated the Original Agreement on
January 25, 2011 (the “Amended and Restated Agreement”), amended and restated
the Amended and Restated Agreement on February 28, 2011 (the “Second Amended and
Restated Agreement”), amended and restated the Second Amended and Restated
Agreement on May 13, 2011 (the “Third Amended and Restated Agreement”) and
amended and restated the Third Amended and Restated Agreement effective January
1, 2014 (the “Fourth Amended and Restated Agreement”); and
WHEREAS, the parties have agreed to make certain amendments and desire to amend
and restate the Fourth Amended and Restated Agreement in its entirety;
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree that the Third Amended and Restated Agreement hereby is
amended and restated in its entirety to read as follows:
Section 1.
Definitions.

(a)    The following terms shall have the respective meanings set forth below in
this Section 1(a):
“Above-Market Rates” has the meaning set forth in Section 11(b).
“Acquisition Expenses” means any and all expenses, exclusive of Acquisition
Fees, incurred by the Company, the Manager or any of their respective Affiliates
in connection with the selection, evaluation, acquisition, origination, making
or development of any Investment, whether or not acquired, including legal fees
and expenses, travel and communications expenses, property inspection expenses,
third party brokerage or finder’s fees, costs of appraisals, nonrefundable
option payments on property not acquired, accounting fees and expenses, title
insurance premiums and expenses, survey expenses, closing costs and the costs of
performing due diligence.
“Acquisition Fee” means the fee payable to the Manager or its assignees pursuant
to Section 7(a).
“Affiliate” means, with respect to a specified Person, (i) any Person directly
or indirectly controlling, controlled by, or under common control with such
specified Person, (ii) any general partner of such specified Person, and (iii)
any Person for which such specified Person acts as a

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general partner. For purposes of this definition, the terms “controlled”,
“controlled by”, or “under common control with” shall mean the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by contract or credit arrangement, as trustee or executor, or
otherwise.
“Agreement” means this Fifth Amended and Restated Management Agreement, as
amended or supplemented from time to time.
“Asset Management Fee” means the fee payable to the Manager pursuant to
Section 7(b).
“Automatic Renewal Term” has the meaning set forth in Section 11(a).
“Bankruptcy Event” means, with respect to any Person, (i) the filing by such
Person of a voluntary petition seeking liquidation, reorganization, arrangement
or readjustment, in any form, of its debts under Title 11 of the United States
Code or any other U.S. federal or state or foreign insolvency law, or such
Person’s filing an answer consenting to or acquiescing in any such petition,
(ii) the making by such Person of any assignment for the benefit of its
creditors, (iii) the expiration of 60 days after the filing of an involuntary
petition under Title 11 of the Unites States Code, an application for the
appointment of a receiver for a material portion of the assets of such Person,
or an involuntary petition seeking liquidation, reorganization, arrangement or
readjustment of its debts under any other U.S. federal or state or foreign
insolvency law, provided that the same shall not have been vacated, set aside or
stayed within such 60-day period, or (iv) the entry against such Person of a
final and non-appealable order for relief under any bankruptcy, insolvency or
similar law now or hereinafter in effect.
“Board” means the board of directors of PAC. In every instance herein requiring
approval of the Board or referring to policies or directions of the Board, for
purposes of this Agreement, the Board shall be deemed to include any duly
appointed and constituted committee of the Board with respect to each and every
act that under the Governing Instruments or applicable law may be taken with the
approval of a duly appointed and constituted committee of the Board, and
references herein to the Board shall be deemed to include references to each
such committee.
“Business Day” means any day except a Saturday, a Sunday or a day on which
banking institutions in New York, New York or in Atlanta, Georgia are not
required to be open.
“Cause Termination Notice” has the meaning set forth in Section 13(a).
“Change of Control” of an entity means a change in the direct or indirect (i)
beneficial ownership of more than 50% of the combined voting power of such
entity’s then outstanding equity interests, or (ii) power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or credit arrangement, as trustee or
otherwise.
“Claim” has the meaning set forth in Section 9(c).

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“Closing Date” means the date of closing of the Initial Public Offering.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any successor statute thereto. Reference to any provision of the Code shall mean
such provision as in effect from time to time, as the same may be amended, and
any successor provision thereto, as interpreted by any applicable regulations as
in effect from time to time.
“Common Stock” means the Common Stock, par value $0.01 per share, of PAC.
“Company” means, collectively, PAC and the Operating Partnership.
“Company Entities” means, collectively, PAC, the Operating Partnership and each
of their respective subsidiaries.
“Company Indemnified Party” has meaning set forth in Section 9(b).
“Conduct Policies” has the meaning set forth in Section 3.
“Confidential Information” has the meaning set forth in Section 6.
“Construction Fee, Development Fee and Landscaping Fee” means the fee payable to
the Manager or its assignees pursuant to Section 7(e).
“Contract Sales Price” means the total consideration received by any of the
Company Entities for the sale of an Investment, which total consideration shall
include the amount of cash received, the fair market value of any property
received and the amount of debt assumed by the purchaser to which a Company
Entity is relieved of responsibility upon such disposition.
“Deferrable Fees” has the meaning set forth in Section 7(j).
“Director” means a member of the Board.
“Disposition Fee on Sale of Assets” means the fee payable to the Manager or its
assignees pursuant to Section 7(d).
“Effective Termination Date” has the meaning set forth in Section 11(b).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fees Accrued Upon Termination” means the amounts payable to the Manager or its
assignees equal to the aggregate of any earned but unpaid compensation and
expense reimbursements accrued as of the date of termination if this Agreement
is terminated (i) pursuant to a Change of Control of PAC, (ii) pursuant to a
Termination Without Cause, (iii) by the Manager pursuant to Section 13(b), or
(iv) based on a liquidation by the Company of all its assets.

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“Financing Transaction” means any transaction with respect to any Investment
involving any of the Company Entities incurring any mortgage or other
indebtedness, including the entering into any line of credit, transaction
involving the creation of any commercial mortgage-backed security and mezzanine
financing.
“GAAP” means United States generally accepted accounting principles,
consistently applied.
“General and Administrative Expenses Fee” means the fee payable to the Manager
or its assignees pursuant to Section 8(b)(ii) in connection with the
administration of the day-to-day operations and the performance and supervision
of the performance of such other administrative functions necessary to the
management of the Company.
“Governing Instruments” means, with regard to any entity, the articles of
incorporation or certificate of incorporation and by-laws in the case of a
corporation, the partnership agreement in the case of a general or limited
partnership, the certificate of formation and operating or limited liability
company agreement in the case of a limited liability company, the declaration of
trust or other comparable trust instrument in the case of a trust, or similar
governing documents in the case of another type of entity, in each case, as the
same may be amended from time to time.
“Indemnified Party” has the meaning set forth in Section 9(b).
“Independent Director” means a member of the Board who is “independent” in
accordance with PAC’s Governing Instruments and the rules of the NYSE MKT or
such other securities exchange on which the shares of Common Stock are listed.
“Initial Public Offering” means PAC’s initial public offering through one or
more underwriters pursuant to the IPO Registration Statement.
“Initial Term” has the meaning set forth in Section 11(a).
“Investment” means any investment by any Company Entity, directly or indirectly,
in Real Estate Assets, Real Estate Related Loans or any other asset.
“Investment Company Act” means the Investment Company Act of 1940, as amended.
“Investment Guidelines” means the investment guidelines approved by the Board, a
copy of which is attached hereto as Exhibit A, as the same may amended,
restated, supplemented or waived pursuant to the approval of a majority of the
entire Board (which must include a majority of the Independent Directors).
“Investment Transaction” means any purchase, acquisition, exchange, sale or
disposition, merger or interest exchange that results in the acquisition or
disposition of, or other transaction involving, an Investment.

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“IPO Registration Statement” means PAC’s Registration Statement on Form S-11
(Registration No. 333-168407), as amended from time to time, pursuant to which
it conducted the Initial Public Offering.
“Joint Ventures” means the joint venture or partnership or other similar
arrangements (other than between or among any Company Entity) in which a Company
Entity is a co-venturer, member, partner or other equity holder, which are
established to own Investments.
“Losses” has the meaning set forth in Section 9(a).
“Manager” has the meaning set forth at the head of this Agreement and shall
include any successor in interest thereto.
“Manager Change of Control” means a Change of Control of the Manager; provided,
however, that no Manager Change of Control shall result from (i) any public
offering of equity interests of the Manager, or (ii) any assignment of this
Agreement by the Manager as permitted hereby and in accordance with the terms
hereof.
“Manager Indemnified Party” has the meaning set forth in Section 9(a).
“Manager Permitted Disclosure Parties” has the meaning set forth in
Section 6(a).
“Multifamily Property Management and Leasing Fee” means the fee payable to the
Manager or its assignees pursuant to Section 7(c).
“Notice of Proposal to Negotiate” has the meaning set forth in Section 11(c).
“NYSE MKT” means the NYSE MKT.
“Operating Partnership” has the meaning at the head of this Agreement.
“PAC” has the meaning at the head of this Agreement.
“Person” or “person” means any natural person, corporation, partnership,
association, limited liability company, estate, trust or joint venture, any
federal, state, county or municipal government or any bureau, department or
agency thereof, or any other legal entity.
“Real Estate Assets” means any investments by any Company Entity in unimproved
or improved Real Property (including fee or leasehold interests, options and
leases), directly, through one or more subsidiaries or through a Joint Venture.
“Real Estate Related Loans” means any investments in mortgage loans and other
types of real estate related debt obligations, including mezzanine loans, bridge
loans, convertible mortgages, wraparound mortgage loans, construction mortgage
loans, loans on leasehold interests and participations in such loans, by any
Company Entity, directly, through one or more subsidiaries or through a Joint
Venture.

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“Real Property” means real property owned from time to time by any Company
Entity, directly, through one or more subsidiaries or through a Joint Venture,
which consists of (i) land only, (ii) land, including the buildings located
thereon, (iii) buildings only, or (iv) such Investments the Board or the Manager
designates as Real Property to the extent such Investments could be classified
as Real Property.
“Regulation FD” means Regulation FD as promulgated by the SEC.
“REIT” means a “real estate investment trust” as defined under the Code.

“Retail Management Fee” means the fee payable to the Manager or its assignees
pursuant to Section 7(j)(i).
“Retail Leasing Fee” means the fee payable to the Manager or its assignees
pursuant to Section 7(i)(ii).
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Target Assets” means the types of assets invested in by the Company, subject
to, and including any changes in, the Investment Guidelines.
“Termination Notice” has the meaning set forth in Section 11(b).
“Termination Without Cause” has the meaning set forth in Section 11(b).
(b)    As used herein, accounting terms relating to any Company Entity not
defined in Section 1(a), and accounting terms partly defined in Section 1(a), to
the extent not defined, shall have the respective meanings given to them under
GAAP.
(c)    As used herein, “calendar quarters” shall mean the periods from January 1
to March 31, April 1 to June 30, July 1 to September 30 and October 1 to
December 31 of the applicable year.
(d)    The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section references are to this
Agreement unless otherwise specified.
(e)    The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.
(f)    The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.”

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(g)    A reference to any gender shall be deemed to be a reference to all
genders.
Section 2.
Appointment and Duties of the Manager.

(a)    PAC and the Operating Partnership hereby appoint the Manager to manage
and administer the Investments and day‑to-day operations of the Company
Entities, subject at all times to the further terms and conditions set forth in
this Agreement and to the oversight of, and such further limitations or
parameters consistent with this Agreement as may be imposed from time to time
by, the Board. The Manager will use commercially reasonable efforts to perform
each of its duties set forth herein, provided that funds are made available by
the Company for such purposes as set forth in Section 8. The Company shall not
appoint any other Person except the Manager to perform the duties and carry out
the responsibilities of the Manager described herein, except as may otherwise be
permitted by this Agreement and except to the extent that the Manager elects, in
its sole and absolute discretion, subject to the terms of this Agreement, to
cause the duties of the Manager as set forth herein to be provided by third
parties.
(b)    The Manager, in its capacity as manager of the Investments and the
day-to-day operations of the Company Entities, at all times will be subject to
the oversight and direction of the Board, will act in a manner that is compliant
with the provisions of the Governing Instruments of each Company Entity, will
use commercially reasonable efforts to present to the Company potential
investment opportunities and will perform its duties hereunder, including
managing the Company’s business affairs in conformity with the Investment
Guidelines and other policies that are determined and adopted by the Board. PAC,
the Operating Partnership and the Manager hereby acknowledge the adoption by the
Board of the Investment Guidelines, including the Company’s investment strategy
with respect to Target Assets. PAC, the Operating Partnership and the Manager
hereby acknowledge and agree that, during the term of this Agreement, any
proposed changes to the Company’s investment strategy that would modify or
expand the Target Assets shall require a change in, or supplement to, the
Investment Guidelines. The Company shall notify the Manager promptly of any
amended, restated, supplemented or waived Investment Guidelines, including any
modification or revocation of the Manager’s authority set forth in the
Investment Guidelines; provided, however, that such modification or revocation
shall not be applicable to investment transactions to which the Manager has
committed any Company Entity prior to the date of receipt by the Manager of such
notification.
(c)    The Manager will be responsible for the day-to-day operations of the
Company Entities (which, for purposes of the Manager’s responsibilities in this
Agreement, includes their respective subsidiaries) and will perform (or cause to
be performed), subject to the Board’s oversight, such services and activities
relating to the Investments and the day-to-day operations of the Company
Entities as may be appropriate, which may include:
(i)    (A) proposing modifications to the Investment Guidelines to the Board,
(B) periodically reviewing the Company’s Investment portfolio for compliance
with the Investment Guidelines and reporting its findings to the Board, (C)
periodically reviewing and reporting to the Board regarding the diversification
of the Company’s Investment portfolio and the financing strategies, and (D)
conducting or overseeing the provision of the services and activities set forth
in this Section 2;

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(ii)    investigating, analyzing, selecting, conducting due diligence with
respect to, negotiating the terms and conditions of (including negotiating the
forms of definitive agreements), arranging financing for and recommending to the
Board in accordance with procedures adopted by the Board possible Investment
Transactions consistent with the Investment Guidelines;
(iii)    with respect to prospective Investment Transactions and Financing
Transactions, conducting negotiations (including negotiation of definitive
agreements) with sellers, purchasers, prospective merger partners, lenders and
other financing sources and brokers and, if applicable, their respective agents
and representatives and closing Investment Transactions and Financing
Transactions on behalf of the Company;
(iv)    effecting any private placement of interests in the Operating
Partnership, tenancy-in-common or other interests in Investments as may be
approved by the Board;
(v)    delivering to, or maintaining on behalf of, the Company copies of all
appraisals obtained in connection with the Investments in any Real Estate Assets
as may be required to be obtained by the Board;
(vi)    negotiating and causing the Company to enter into, within the
discretionary limits and authority granted by the Board, repurchase agreements,
interest rate swap agreements, agreements relating to borrowings under programs
established by the U.S. Government and other agreements and instruments required
to conduct the business of the Company;
(vii)    engaging and supervising, at the expense of the Company, independent
contractors that provide investment banking, securities brokerage, mortgage
brokerage, real estate brokerage services, other financial services, due
diligence services, underwriting review services, legal and accounting services,
and all other services (including transfer agent and registrar services) as may
be required relating to the Company’s operations, Investments, Investment
Transactions or Financing Transactions;
(viii)    advising the Company on, preparing, negotiating and entering into, on
behalf of the Company, applications and agreements relating to programs
established by the U.S. Government;
(ix)    coordinating and managing operations of any joint venture or
co-investment interests held by the Company and conducting all matters with the
joint venture or co‑investment partners;
(x)    providing executive and administrative personnel, office space and office
services required in rendering services to the Company;
(xi)    entering into on behalf of the Company leases and service contracts in
connection with the Investments and administering the day-to-day operations and
performing and supervising the performance of such other administrative
functions

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necessary to the Company’s management under oversight by the Board, including
the collection of revenues and the payment of the Company’s debts and
obligations and maintenance of appropriate computer services to perform such
administrative functions;
(xii)    communicating on the Company’s behalf with the holders of any equity or
debt securities of PAC or the Operating Partnership as required to satisfy the
reporting and other requirements of any governmental body or agency or trading
market and to maintain effective relations with such holders;
(xiii)    evaluating and recommending to the Board hedging strategies and
engaging on the Company’s behalf in hedging activities within the discretionary
limits and authority as granted by the Board, consistent with the Company’s
qualification as a REIT and with the Investment Guidelines;
(xiv)    counseling the Board and the Company regarding the maintenance of PAC’s
qualification as a REIT and monitoring compliance with the various REIT
qualification tests and other rules set out in the Code and Treasury Regulations
thereunder and using commercially reasonable efforts to cause PAC to qualify for
taxation as a REIT;
(xv)    counseling the Board and the Company regarding the maintenance of PAC’s
exemption from the status of an investment company required to register under
the Investment Company Act, monitoring compliance with the requirements for
maintaining such exemption and using commercially reasonable efforts to cause
PAC to maintain such exemption from such status;
(xvi)    furnishing reports and statistical and economic research to the Board
regarding the activities and services performed for the Company by the Manager,
including reports with respect to potential conflicts of interest involving the
Manager or any of its Affiliates;
(xvii)    monitoring the performance of the Investments and providing periodic
reports with respect thereto to the Board, including comparative information
with respect to such operating performance and budgeted or projected operating
results;
(xviii)    investing and reinvesting any moneys and securities of the Company
within the discretionary limits and authority as granted by the Board (including
investing in short-term investments pending investment in other Investments,
payment of fees, costs and expenses) and advising the Company with respect to
its equity and debt capitalization and its financing strategies, and the
payments of dividends or distributions to PAC’s stockholders and the Operating
Partnership’s partners;
(xix)    causing the Company to retain qualified accountants and legal counsel,
as applicable, to assist in developing appropriate accounting procedures and
systems, internal controls and other compliance procedures and testing systems
with respect to financial reporting obligations and compliance with the
provisions of the Code applicable

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to REITs and, if applicable, taxable REIT subsidiaries, and to conduct quarterly
compliance reviews with respect thereto;
(xx)    assisting the Company in qualifying to do business in all applicable
jurisdictions and to obtain and maintain all appropriate licenses;
(xxi)    assisting the Company in complying with all laws and regulatory
requirements applicable to the Company’s business activities, including
preparing or causing to be prepared all financial statements required under
applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Exchange Act, the Securities Act, state or
foreign securities laws or by the NYSE MKT;
(xxii)    assisting the Company in taking all necessary action to enable the
Company to make required tax filings and reports, including soliciting
information from stockholders to the extent required by the provisions of the
Code applicable to REITs;
(xxiii)    handling and resolving all claims, disputes or controversies
(including all litigation, arbitration, settlement or other proceedings or
negotiations) in which the Company may be involved or to which the Company or
the Company’s properties or assets may be subject arising out of the Company’s
day-to-day operations (other than with the Manager or its Affiliates), subject
to such limitations or parameters as may be imposed from time to time by the
Board;
(xxiv)    using commercially reasonable efforts to cause expenses incurred on
behalf of the Company to be commercially reasonable or commercially customary
and within any budgeted parameters or expense guidelines proposed by the Manager
and approved by the Board from time to time;
(xxv)    advising the Board regarding the Company’s equity and debt financings,
hedging activities and joint venture arrangements including (A) advising the
Board on the appropriateness of the Company’s leverage ratio, levels of
preferred and common equity financing, pricing of equity offerings, derivative
positions and strategies and off-balance sheet arrangements, and (B) seeking to
execute on the Company’s behalf Financing Transactions, equity offerings,
hedging transactions and joint ventures and off-balance sheet transactions
consistent with the Board’s directions and the Company’s financing policies as
approved by the Board;
(xxvi)    providing portfolio management services to the Company;
(xxvii)    arranging marketing materials, advertising, industry group activities
(such as conference participations and industry organization memberships) and
other promotional efforts designed to promote the Company’s business; and
(xxviii)    performing such other services as may be required from time to time
for management and other activities relating to the Company’s assets and
business as the

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Board shall reasonably request or the Manager shall deem appropriate under the
particular circumstances.
(d)    The Manager may retain, for and on behalf, and at the sole cost and
expense, of the Company, such services of the Persons referred to in Section 8
as the Manager deems necessary or advisable in connection with the management
and operations of the Company. In performing its duties under this Section 2,
the Manager shall be entitled to rely reasonably on qualified experts and
professionals (including accountants, legal counsel and other professional
service providers) hired by the Manager at the Company’s sole cost and expense.
(e)    The Manager shall refrain from any action that, in its sole judgment made
in good faith, (i) is not in compliance with the Investment Guidelines, (ii)
would adversely and materially affect the qualification of PAC as a REIT or the
Operating Partnership as a partnership under the Code or the Company’s status as
an entity excluded from investment company status under the Investment Company
Act, or (iii) would conflict with or violate (A) any law, rule or regulation of
any governmental body or agency having jurisdiction over any Company Entity, (B)
any rule of any exchange on which the securities of the Company may be listed,
or (C) any applicable Governing Instruments. The Manager may proceed with taking
an action described above if further instructed to do so by the Board. If the
Manager is ordered to take any action by the Board, the Manager promptly shall
notify the Board if it is the Manager’s judgment that such action would
adversely and materially affect such qualification or status or conflict with or
violate any such law, rule or regulation or Governing Instruments.
Notwithstanding the foregoing, neither the Manager nor any of its Affiliates
shall be liable to any Company Entity, the Board, any of the stockholders,
partners, members or other holders of equity interests of any Company Entity for
any act or omission by the Manager or any of its Affiliates, except as provided
in Section 9.
(f)    The Manager shall notify the Board of all Investment Transactions within
30 days following completion of the transaction. The Manager shall seek and
obtain Board approval of any Investment Transaction that does not meet the
Investment Guidelines. Subject to this Section 2(f), the Manager may execute
without Board approval any Investment Transaction that fits within the
Investment Guidelines. If any transaction requires approval by the Independent
Directors, the Manager will deliver to the Independent Directors all documents
and other information reasonably required by them to evaluate properly the
proposed transaction. With respect to Investment Transactions for which Board
approval is not required, the Manager shall provide to the Board a summary of
its investment analysis with respect to the proposed Investment Transaction. The
Board may, at any time upon the giving of notice to the Manager, modify or
revoke the authority set forth in this Section 2(f); provided, however, that
such modification or revocation shall be effective upon receipt by the Manager
and shall not be applicable to Investment Transactions to which the Manager has
committed the Company prior to the date of receipt by the Manager of such
notification.
(g)    The Company will take all actions reasonably required to permit and
enable the Manager to carry out its duties and obligations under this Agreement,
including all steps reasonably necessary to allow the Manager to file any
registration statement or other filing

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required to be made under the Securities Act, Exchange Act, the NYSE MKT’s
Company Guide, the Code or other applicable law, rule or regulation on behalf of
the Company in a timely manner. The Company will use commercially reasonable
efforts to make available to the Manager all resources, information and
materials reasonably requested by the Manager to enable the Manager to satisfy
its obligations hereunder, including its obligations to deliver financial
statements and any other information or reports with respect to the Company.
(h)    As frequently as the Manager may deem necessary or advisable, or at the
direction of the Board, the Manager shall prepare (or, at the sole cost and
expense of the Company, cause to be prepared) reports and other information
relating to any proposed or consummated Investment.
(i)    The Manager shall prepare (or, at the sole cost and expense of the
Company, cause to be prepared) all reports, financial or otherwise, reasonably
required by the Board in order for the Company Entities to comply with their
respective Governing Instruments or as otherwise reasonably requested by the
Board, including an annual audit of PAC’s consolidated financial statements by a
nationally recognized independent accounting firm.
(j)    The Manager shall prepare (or, at the sole cost and expense to the
Company, cause to be prepared) regular reports for the Board to enable the Board
to review the Company’s acquisitions, Investment portfolio composition and
characteristics, credit quality, performance and compliance with the Investment
Guidelines and policies approved by the Board.
(k)    Officers, employees and agents of the Manager and its Affiliates may
serve as directors, officers, agents, nominees or signatories for any Company
Entity, to the extent permitted by their respective Governing Instruments, by
any resolutions duly adopted by the Board, the Operating Partnership or such
subsidiary. When executing documents or otherwise acting in such capacities for
any Company Entity, such Persons shall indicate in what capacity they are
executing on behalf of such Company Entity. Without limiting the foregoing,
while this Agreement is in effect, the Manager will establish a management team,
including a chief executive officer and president or similar positions, along
with appropriate support personnel, to provide the management services to be
provided by the Manager to the Company Entities hereunder, who shall devote such
of their time to the management of the Investments and consideration of the
Investment Guidelines and policies as necessary and appropriate, commensurate
with the level of activity of the Company from time to time.
(l)    The Manager, at its sole cost and expense, shall maintain reasonable and
customary “errors and omissions” insurance coverage and other customary
insurance coverage in respect to its obligations and activities under, or
pursuant to, this Agreement, naming PAC and the Operating Partnership as
additional insureds.
(m)    The Manager, at its sole cost and expense, shall provide such internal
audit, compliance and control services as may be required for the Company to
comply with applicable law (including the Securities Act and Exchange Act),
regulation (including SEC regulations) and the rules and requirements of the
NYSE MKT and as otherwise reasonably requested by the Company or the Board from
time to time.

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(n)    The Manager, at its sole cost and expense, shall maintain any required
registration of the Manager or any Affiliate with the SEC under the Investment
Advisers Act of 1940, as amended, or with any state securities authority in any
state in which the Manager or its Affiliate is required to be registered as an
investment advisor under applicable state securities laws.
Section 3.
Conduct Policies.

The Manager acknowledges receipt of the Company’s Code of Business Conduct and
Ethics and the Company’s Policy on Insider Trading (collectively, the “Conduct
Policies”) and will use commercially reasonable efforts to require the Persons
who provide services to the Company to comply with the Conduct Policies in the
performance of such services hereunder or such comparable policies as shall in
substance hold such Persons to at least the standards of conduct set forth in
the Conduct Policies.
Section 4.
Additional Activities of the Manager; Non-Solicitation; Restrictions.

(a)    Subject to Section 4(c) and except as may be provided in the Investment
Guidelines, nothing in this Agreement shall: (i) prevent the Manager, any of its
Affiliates or any of their respective officers, directors or employees, from
engaging in other businesses or from rendering services of any kind to any other
Person, whether or not the investment objectives or policies of any such other
Person are similar to those of the Company; provided, however, that the Manager
devotes sufficient resources to the Company’s business to discharge its
obligations to the Company under this Agreement; or (ii) in any way bind or
restrict the Manager, any of its Affiliates or any of their respective officers,
directors or employees from buying, selling or trading any securities or
commodities for their own accounts or for the account of others for whom the
Manager, any of its Affiliates or any of their respective officers, directors or
employees may be acting.
(b)    While information and recommendations supplied to the Company shall, in
the Manager’s good faith judgment, be appropriate under the circumstances and in
light of the investment objectives and policies of the Company, they may be
different from the information and recommendations supplied by the Manager or
any Affiliate of the Manager to others. The Company shall be entitled to
equitable treatment under the circumstances in receiving information,
recommendations and any other services, but the Company recognizes that the
Company is not entitled to receive preferential treatment as compared with the
treatment given by the Manager or any Affiliate of the Manager to others.
(c)    The Manager shall report to the Board any condition or circumstance,
existing or anticipated, of which it has knowledge, which creates or could
create a conflict of interest between the Manager’s obligations to the Company
and its obligations to or its interest in any other Person. If the Manager or
any of its Affiliates sponsored any other investment program with similar
investment objectives to the Company that has investment funds available at the
same time as the Company, the Manager shall inform the Board of the method to be
applied by the Manager in allocating investment opportunities among the Company
and competing investment entities and shall provide regular updates to the Board
of the investment opportunities provided by the Manager to competing programs in
order for the Board (including the

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Independent Directors) to evaluate that the Manager is allocating such
opportunities in accordance with such method.
(d)    In the event of a Termination Without Cause of this Agreement by the
Company pursuant to Section 11(b), for a period of two years from and after the
date of such termination of this Agreement, the Company shall not (and shall
cause each of the Company Entities to not), without the consent of the Manager,
employ or otherwise retain (directly or indirectly any Company Entity) any
Person who was employed as an executive by the Manager or any of its Affiliates
on the date of such termination or any Person who shall have been employed as an
executive by the Manager or any of its Affiliates at any time within the
two-year period immediately preceding the date on which such Person is scheduled
to commence employment with or otherwise be retained by the Company or any other
Company Entity. The Company acknowledges and agrees that, in addition to any
damages, the Manager shall be entitled to equitable relief for any violation of
this Section 4(d) by PAC or the Operating Partnership (directly or indirectly
through any of their respective subsidiaries), including injunctive relief.
Section 5.
Bank Accounts.

At the direction of the Board, the Manager may establish and maintain one or
more bank accounts in the name of any Company Entity, and may collect and
deposit into any such account or accounts, and disburse funds from any such
account or accounts, under such policies, terms and conditions as the Company
may establish and the Board may approve, provided that no funds shall be
commingled with the funds of the Manager or its Affiliates. The Manager shall
from time to time render appropriate accountings of such collections and
payments to the Board and, upon request, shall provide information regarding
such account to the Company’s auditors.
Section 6.
Records; Confidentiality.

(a)    The Manager shall maintain appropriate books of accounts and records
relating to services performed hereunder, and such books of account and records
shall be accessible for inspection by representatives of the Company Entities at
any time during normal business hours. The Manager shall keep confidential any
and all non-public information, written or oral, obtained by it in connection
with the services rendered hereunder (“Confidential Information”) and shall not
use Confidential Information except in furtherance of its duties under this
Agreement or disclose Confidential Information, in whole or in part, to any
Person other than (i) to its Affiliates and the officers, directors, employees,
agents, representatives or advisors of the Manager or any of its Affiliates who
need to know such Confidential Information for the purpose of rendering services
hereunder, (ii) to appraisers, financing sources and others in the ordinary
course of the Company’s business ((i) and (ii) collectively, “Manager Permitted
Disclosure Parties”), (iii) in connection with any governmental or regulatory
filings of the Company, or filings with the NYSE MKT or other applicable
securities exchange or market, (iv) in presentations or other disclosures to the
Company’s investors (subject to compliance with Regulation FD), (iv) to
governmental officials having jurisdiction over the Company, (v) as required by
law or legal process to which the Manager or any Person to whom disclosure is
permitted hereunder is a party, or (vi) with the consent of the Company. The
Manager will inform each of its Manager Permitted Disclosure Parties of the
non-public nature of the

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Confidential Information and to obtain agreement from such Persons to treat such
Confidential Information in accordance with the terms hereof.
(b)    Nothing herein shall prevent any Manager Permitted Disclosure Party from
disclosing Confidential Information (i) upon the order of any court or
administrative agency, (ii) upon the request or demand of, or pursuant to any
law or regulation to, any regulatory agency or authority, (iii) to the extent
reasonably required in connection with the exercise of any remedy hereunder, or
(iv) to its legal counsel or independent auditors; provided, however, that with
respect to clauses (i) and (ii), it is agreed that, so long as not legally
prohibited, the Manager will provide PAC with prompt written notice of such
order, request or demand so that PAC may seek, at its sole expense, an
appropriate protective order and/or waive any Manager Permitted Disclosure
Party’s compliance with the provisions of this Agreement. If, failing the entry
of a protective order or the receipt of a waiver hereunder, the Manager is
required to disclose Confidential Information, the Manager Permitted Disclosure
Party may disclose only that portion of such information that is legally
required without liability hereunder; provided, however, that the Manager
Permitted Disclosure Party agrees to exercise commercially reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded such
information.
(c)    Notwithstanding anything herein to the contrary, the following types of
Confidential Information shall be deemed to be excluded from provisions hereof:
(i) any Confidential Information that is available to the public from a source
other than the Manager or its Affiliates, (ii) any Confidential Information that
is released in writing by any of the Company Entities to the public (except to
the extent exempt under, and in compliance with, Regulation FD) or to persons
who are not under similar obligation of confidentiality to any of the Company
Entities; and (iii) any Confidential Information that is obtained by the Manager
from a third party which, to the Manager’s knowledge, does not constitute a
breach by such third party of an obligation of confidence with respect to the
Confidential Information disclosed.
(d)    The provisions of this Section 6 shall survive the expiration or earlier
termination of this Agreement for a period of two years thereafter, provided
that the parties will maintain trade secrets of the other party identified in
writing as trade secrets, and which in fact constitute trade secrets, for a
period of no longer than five years thereafter.
Section 7.
Compensation.

(a)    Acquisition Fee. The Company shall pay an Acquisition Fee to the Manager
or its assignees as compensation for services rendered in connection with the
investigation, selection and acquisition (by purchase, investment or exchange)
of Investments. The total Acquisition Fee payable to the Manager or its
assignees shall equal 1.0% of the purchase price of Real Estate Assets and 1.0%
of the amount advanced for Real Estate Related Loans or other Investments (other
than Real Estate Assets), along with reimbursement of Acquisition Expenses
actually incurred by the Manager or any of its Affiliates; provided, however,
that no Acquisition Fee will be payable until the Closing Date, although it may
accrue before the Closing Date. The purchase price of Real Estate Assets shall
equal the amount paid or allocated to the acquisition (by purchase, investment
or exchange) of the Real Estate Assets inclusive of expenses related thereto and
the amount of debt assumed in connection with such Investment or to which such
Investment

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may be subject following such acquisition, but exclusive of Acquisition Fees.
The purchase price allocable for an Investment held through a Joint Venture
shall equal the product of (i) the purchase price of, or the amount advanced
for, the Investment, as applicable, determined as stated above, and (ii) the
direct or indirect ownership percentage in the Joint Venture held directly or
indirectly by any Company Entity. For purposes of this paragraph, “ownership
percentage” shall be the percentage of capital stock, membership interests,
partnership interests or other equity interests held by any Company Entity,
without regard to classification of such equity interests. The Company shall pay
to the Manager or its assignees the Acquisition Fee promptly upon the closing of
the Investment, subject to the proviso set forth above.
(b)    Asset Management Fee. The Company shall pay a monthly Asset Management
Fee to the Manager or its assignees as compensation for services rendered in
connection with the management of the Investments. The Asset Management Fee
shall be payable monthly in cash or shares of PAC’s Common Stock, at the option
of the Manager, and shall be equal to one-twelfth of 0.50% of the total value of
the Company’s assets (including cash or cash equivalents) held as of the last
day of the immediately preceding month, based on the adjusted cost of the
Company’s assets before reduction for depreciation, amortization, impairment
charges and cumulative acquisition costs charged to expense in accordance with
GAAP (adjusted cost of Real Estate Assets and Real Estate Related Loans will
include the purchase price, Acquisition Expenses, capital expenditures and other
customarily capitalized costs) and as adjusted for appropriate closing dates for
individual asset acquisitions. The Asset Management Fee will be appropriately
pro rated for any partial month.
(c)    Multifamily Property Management and Leasing Fee. The Company shall pay a
Multifamily Property Management and Leasing Fee to the Manager or its assignees
as compensation for services rendered in connection with the rental, leasing,
operation and management of the Company’s multifamily Real Estate Assets and the
supervision of any non-Affiliates that are engaged by the Manager to provide
such services in an amount equal to 4.0% of the gross revenues of multifamily
properties managed per month. The Manager may subcontract the performance of its
multifamily property management and leasing services duties to third parties
(including its Affiliates) and pay all or a portion of the Multifamily Property
Management and Leasing Fee to such persons with whom it contracts for these
services. The Manager will be responsible for all fees payable to third parties
(including its Affiliates) in connection with subcontracted multifamily property
management and leasing duties. The Multifamily Property Management and Leasing
Fee will be payable monthly in arrears, based on the actual gross revenues for
the prior month.
(d)    Disposition Fee on Sale of Assets. In connection with a sale or other
disposition (other than a roll-over of an existing Investment into another
Investment related to substantially the same underlying asset) of an Investment
(except for such Investments that are traded on a national securities exchange
and short-term investments pending investment in other Investments) the Company
shall pay to the Manager or its assignees a Disposition Fee on Sale of Assets
1.0% of the Contract Sales Price of such Investment. If the sale or disposition
involves the receipt of publicly traded securities or operating partnership
units that may be redeemed for or converted into publicly traded securities,
then the Disposition Fee on Sale of Assets shall be

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receivable upon the receipt of such consideration, notwithstanding the fact that
such consideration may at that time be publicly traded or valued by reference to
a publicly traded security.
(e)    Construction Fee, Development Fee and Landscaping Fee. The Company shall
pay a Construction Fee, Development Fee and/or Landscaping Fee to the Manager or
its assignees as compensation for services rendered in connection with the
construction, development or landscaping of the Real Estate Assets and the
supervision of any non-Affiliates that are engaged by then Manager to provide
such services in an amount equal to the customary and competitive market rates
in light of the size, type and location of the Real Estate Assets.
(f)    Exclusion of Certain Transactions. If any Company Entity shall propose to
enter into any transaction in which the Manager, any Affiliate of the Manager or
any of the Manager’s directors or officers has a direct or indirect interest,
then such transaction shall be approved by a majority of the Board not otherwise
interested in such transaction, including a majority of the Independent
Directors.
(g)    Limitation on Total Asset Management Fees, Multifamily Property
Management and Leasing Fees, Retail Management Fees and General and
Administrative Expenses Fee. The total amount of the Asset Management Fees,
Multifamily Property Management and Leasing Fees, Retail Management Fees and
General and Administrative Expenses Fee payable in connection with the Company’s
investments paid or reimbursed to the Manager shall not exceed 1.50% per annum
of the total value of the Company’s assets (including cash and cash equivalents)
based on the adjusted cost of the Company’s assets before reduction for
depreciation, amortization, impairment charges and cumulative acquisition costs
charged to expense in accordance with GAAP (adjusted cost will include the gross
contract purchase price, Acquisition Expenses, capital expenditures and other
customarily capitalized costs).
(h)    General and Administrative Expenses Fee. The Company shall pay a General
and Administrative Expenses Fee in an amount equal to 2.0% of the gross revenues
of the Company per month.
(i)    Retail Related Fees.
(i) Retail Management Fee. The Company shall pay a Retail Management Fee to the
Manager or its assignees as compensation for services rendered in connection
with the operation and management of the Company’s retail Real Estate Assets and
the supervision of any non-Affiliates that are engaged by the Manager to provide
such services in an amount equal to 4.0% of the gross revenues of retail
properties managed per month. The Manager may subcontract the performance of its
retail property management services duties to third parties (including its
Affiliates) and pay all or a portion of the Retail Management Fee to such
persons with whom it contracts for these services. The Manager will be
responsible for all fees payable to third parties (including its Affiliates) in
connection with subcontracted retail property management duties. The Retail
Property Management Fee will be payable monthly in arrears, based on the actual
gross revenues for the prior month.

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(ii) Retail Leasing Fees. The Company shall pay Retail Leasing Fees to the
Manager as follows:
(I)New Leases. The Company shall pay a commission to Manager with respect to a
new lease for a retail Real Estate Asset equal to the greater of (a) four
dollars per square foot ($4.00/sf) or, (b) the sum of four percent (4%) of the
aggregate base rental payments to be paid by tenant for the first five (5) years
of the original lease term and two and one-half percent (2.5%) of the second
five (5) years of the original lease term provided.
(II)Co-Brokers. In the event of co-broker participation in a new lease for a
retail Real Estate Asset, the leasing commission determined for a new lease,
with respect to such lease, shall be increased by fifty percent (50%) which
increased commission amount (being one hundred fifty percent (150%) of the
pre-increase commission) shall be shared between Manager and such co-broker on a
split basis mutually acceptable to Manager and such co-broker, provided that
Manager’s share shall not exceed one hundred percent (100%) of the amount
Manager would have received without outside broker involvement, nor be less than
fifty percent (50%) of the increased amount.
(III)Negotiated Renewals. The Company shall pay a commission to Manager with
respect to a negotiated renewal of an existing lease for a retail Real Estate
Asset equal to the greater of (a) two dollars per square foot ($2.00/sf) or, (b)
two percent (2%) of the aggregate base rental payments to be paid by tenant for
the first ten (10) years of the original lease term.
(IV)Market Rates. Customary and competitive market rates for retail leasing
services may vary in light of the size, type and location of the Real Estate
Assets so, in no event shall the Retail Leasing Fees paid to manager exceed such
market rates.
(V)Subcontracting. The Manager may subcontract the performance of its retail
leasing service duties to third parties (including its Affiliates) and pay all
or a portion of the Retail Leasing Fees to such persons with whom it contracts
for these services. The Manager will be responsible for all fees payable to
third parties (including its Affiliates) in connection with subcontracted retail
leasing duties, other than in a co-brokerage arrangement described in Section
7(i)(ii)(II). All Retail Leasing Fees will be payable upon the earlier to occur
of rent commencement or tenant’s opening for business.
(j)    Deferral of Fees.
(i)    Notwithstanding the provisions of Sections 7(b) and 7(h) with respect to
the Asset Management Fee, Multifamily Property Management and Leasing Fee, the
Retail Management Fee, the Retail Leasing Fee and the General and Administrative
Expenses Fee (the "Deferrable Fees"), the Manager, on behalf of itself and its
affiliates,

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and its and their respective successors and assigns, hereby agrees that it may
defer all or a portion of the Deferrable Fees with respect to all or any portion
of the Company's assets, as determined by the Investment Committee of the
Manager. The Manager agrees to promptly deliver to the Company written notice of
any deferral of the Deferrable Fees.
(ii)    Upon a Capital Transaction (as defined in the Partnership Agreement)
with respect to any asset of the Company, all deferred fees with respect to such
asset shall become due and payable to the extent the Net Sale Proceeds (as
defined in the Partnership Agreement) for such Capital Transaction exceed the
Allocable Capital Contributions (as defined in the Partnership Agreement) for
such asset plus a cumulative, non-compounded rate of return equal to seven
percent (7%) per annum on such Allocable Capital Contributions.
(iii)    The Manager acknowledges and agrees that no interest shall accrue on
the deferred amounts. To the extent payment of any deferred amount is due to the
Manager hereunder, the Company or PACOP shall pay the Manager no later than the
last business day of the month in which the amount of such payment is
determined, or the first business day of the following month.

Section 8.
Expenses of the Company.

(a)    The Manager shall be responsible for the expenses related to any and all
personnel of the Manager and its Affiliates who provide services to the Company
pursuant to this Agreement (including each of the officers and directors of the
Company who are also directors, officers, employees or agents of the Manager or
any of its Affiliates), including salaries, bonus and other wages, payroll
taxes, the cost of employee benefit plans of such personnel, and costs of
insurance with respect to such personnel. For the avoidance of doubt, any equity
incentive plan of PAC or the Operating Partnership in which any person referred
to above participates shall be excluded from the operation of this Section 8(a).
(b)    The Company shall pay (or cause to be paid) all the costs and expenses of
each Company Entity and shall reimburse the Manager or its Affiliates for
expenses of the Manager and its Affiliates incurred on behalf of any Company
Entity, excepting only those expenses that are specifically the responsibility
of the Manager pursuant to Section 8(a) and subject to Section 7(g). Without
limiting the generality of the foregoing, it is specifically agreed that the
following costs and expenses of the Company Entities shall be paid (or caused to
be paid) by the Company and shall not be paid by the Manager or Affiliates of
the Manager:
(i)    Acquisition Expenses incurred in connection with the selection and
acquisition of Investments;
(ii)    General and Administrative Expenses Fee;
(iii)    expenses in connection with the issuance of securities of the Company,
any Financing Transaction and other costs incident to the acquisition,
disposition and financing of the Investments;

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(iv)    costs of legal, tax, accounting, consulting, auditing and other similar
services rendered to the Company by providers retained by the Manager and
approved by PAC, or, if provided by the Manager’s personnel, in amounts which
are no greater than those which would be payable to outside professionals or
consultants engaged to perform such services pursuant to agreements negotiated
on an arm’s-length basis;
(v)    the compensation and expenses of the Directors and the cost of liability
insurance to indemnify the Company and its officers and the Directors;
(vi)    expenses connected with communications to holders of the securities of
any Company Entity and other bookkeeping and clerical work necessary in
maintaining relations with holders of such securities and in complying with the
continuous reporting and other requirements of governmental bodies or agencies,
including all costs of preparing and filing required reports with the SEC, the
costs payable by the Company to any transfer agent and registrar in connection
with the listing and/or trading of the Company’s securities on any exchange, the
fees payable by the Company to any such exchange in connection with its listing,
costs of preparing, printing and mailing PAC’s annual report to its stockholders
or the Operating Partnership’s partners, as applicable, and proxy materials with
respect to any meeting of PAC’s stockholders or the Operating Partnership’s
partners, as applicable;
(vii)    costs associated with any computer software or hardware, electronic
equipment or purchased information technology services from third-party vendors
that is used for the Company Entities;
(viii)    expenses incurred by managers, officers, personnel and agents of the
Manager for travel on the Company’s behalf and other out-of-pocket expenses
incurred by managers, officers, personnel and agents of the Manager in
connection with the purchase, financing, refinancing, sale or other disposition
of an Investment or in connection with any Financing Transaction;
(ix)    costs and expenses incurred with respect to market information systems
and publications, research publications and materials, and settlement, clearing
and custodial fees and expenses;
(x)    the costs of maintaining compliance with all federal, state and local
rules and regulations or any other regulatory agency;
(xi)    all taxes and license fees;
(xii)    all insurance costs incurred in connection with the operation of the
Company’s business except for the costs attributable to the insurance that the
Manager elects to carry for itself and its personnel;
(xiii)    costs and expenses incurred in contracting with third parties;

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(xiv)    all other costs and expenses relating to the Company’s business and
investment operations, including the costs and expenses of owning, protecting,
maintaining, developing and disposing of Investments, including appraisal,
reporting, audit and legal fees;
(xv)    expenses relating to any office(s) or office facilities, including
disaster backup recovery sites and facilities, maintained for the Company
Entities or the Investments of the Company separate from the office or offices
of the Manager;
(xvi)    expenses connected with the payments of interest, dividends or
distributions in cash or any other form authorized or caused to be made by the
Board, the Operating Partnership or other governing body to or on account of
holders of the securities of any Company Entity, including in connection with
any dividend reinvestment plan;
(xvii)    any judgment or settlement of pending or threatened proceedings
(whether civil, criminal or otherwise) against any Company Entity, or against
any trustee, director, partner, member or officer of such Company Entity in his
capacity as such for which such Company Entity is required to indemnify such
trustee, director, partner, member or officer pursuant to the applicable
Governing Instruments or any agreement or other instrument or by any court or
governmental agency; and
(xviii)    all other expenses actually incurred by the Manager (except as
otherwise specified herein) which are reasonably necessary or advisable for the
performance by the Manager of its duties and functions under this Agreement.
(c)    Costs and expenses incurred by the Manager on behalf of the Company shall
be reimbursed monthly to the Manager. The Manager shall prepare a written
statement in reasonable detail documenting the costs and expenses of the Company
and those incurred by the Manager on behalf of the Company during each month,
and shall deliver such written statement to the Company within 30 days after the
end of each month. The Company shall pay all amounts payable to the Manager
pursuant to this Section 8(c) within five Business Days after the receipt of the
written statement without demand, deduction, offset or delay. Cost and expense
reimbursement to the Manager shall be subject to adjustment at the end of each
calendar year in connection with the annual audit of the Company. The provisions
of this Section 8 shall survive the expiration or earlier termination of this
Agreement to the extent such expenses have previously been incurred or are
incurred in connection with such expiration or termination.
Section 9.
Limits of the Manager’s Responsibility; Indemnification.

(a)    The Manager, its Affiliates and their respective directors, officers,
employees, partners, members, stockholders, other equity holders agents and
representatives (each, a “Manager Indemnified Party”), will not be liable to any
Company Entity or any of the stockholders, partners, members or other holders
equity interests of any Company Entity for any acts or omissions by any Manager
Indemnified Party performed in accordance with and pursuant to this Agreement,
except by reason of any act or omission constituting bad faith, willful

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misconduct or gross negligence on the part of such Manager Indemnified Party.
The Company shall, to the fullest lawful extent, reimburse, indemnify and hold
harmless each Manager Indemnified Party, of and from any and all expenses,
losses, damages, liabilities, demands, charges and claims of any nature
whatsoever (including reasonable attorneys’ fees and costs of investigation)
(collectively “Losses”) in respect of or arising from any acts or omissions of
such Manager Indemnified Party performed in good faith under this Agreement and
not constituting bad faith, willful misconduct or gross negligence on the part
of such Manager Indemnified Party. In addition, the Company shall advance funds
to a Manager Indemnified Party for legal fees and other costs and expenses
incurred as a result of any claim, suit, action or proceeding for which
indemnification is being sought, provided that such Manager Indemnified Party
undertakes to repay the advanced funds to the Company, together with the
applicable legal rate of interest thereon, in cases in which such Manager
Indemnified Party is found pursuant to a final and non-appealable order or
judgment to not be entitled to indemnification.
(b)    The Manager shall, to the fullest lawful extent, reimburse, indemnify and
hold harmless the Company (each, a “Company Indemnified Party”) of and from any
and all Losses in respect of or arising from (i) any acts or omissions of the
Manager constituting bad faith, willful misconduct or gross negligence on the
part of the Manager, or (ii) any claims by the Manager’s employees relating to
the terms and conditions of their employment by the Manager. The Manager assumes
no responsibility under this Agreement other than to render in good faith the
services specifically designated as to be provided by the Manager hereunder and
shall not be responsible for any action of the Board in following or declining
to follow any advice or recommendations of the Manager, including as set forth
in the Investment Guidelines. A Manager Indemnified Party and a Company
Indemnified Party are each sometimes hereinafter referred to as an “Indemnified
Party.”
(c)    In case any such claim, suit, action or proceeding (a “Claim”) is brought
against any Indemnified Party in respect of which indemnification may be sought
by such Indemnified Party pursuant hereto, the Indemnified Party shall give
prompt written notice thereof to the indemnifying party, which notice shall
include all documents and information in the possession of or under the control
of such Indemnified Party reasonably necessary for the evaluation and/or defense
of such Claim and shall specifically state that indemnification for such Claim
is being sought under this Section 9; provided, however, that the failure of the
Indemnified Party to so notify the indemnifying party shall not limit or affect
such Indemnified Party’s rights except to the extent that the indemnifying party
is actually prejudiced thereby. Upon receipt of such notice of Claim (together
with such documents and information from such Indemnified Party), the
indemnifying party shall, at its sole cost and expense, in good faith defend any
such Claim with counsel reasonably satisfactory to such Indemnified Party, which
counsel may, without limiting the rights of such Indemnified Party pursuant to
the next succeeding sentence of this Section, also represent the indemnifying
party in such investigation, action or proceeding. In the alternative, such
Indemnified Party may elect to conduct the defense of the Claim, if (i) such
Indemnified Party reasonably determines that the conduct of its defense by the
indemnifying party could be materially prejudicial to its interests, (ii) the
indemnifying party refuses to assume such defense (or fails to give written
notice to the Indemnified Party within ten days of receipt of a notice of Claim
that the indemnifying party assumes such defense), or (iii) the indemnifying

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party shall have failed, in such Indemnified Party’s reasonable judgment, to
defend the Claim in good faith. The indemnifying party may settle any Claim
against such Indemnified Party without such Indemnified Party’s consent,
provided (A) such settlement is without any Losses whatsoever to such
Indemnified Party, (B) the settlement does not include or require any admission
of liability or culpability by such Indemnified Party, (C) the indemnifying
party obtains an effective written release of liability for such Indemnified
Party from the party to the Claim with whom such settlement is being made, which
release must be reasonably acceptable to such Indemnified Party, and a dismissal
with prejudice with respect to all claims made by the party against such
Indemnified Party in connection with such Claim, and (D) such settlement does
not provide for any equitable relief. The applicable Indemnified Party shall
reasonably cooperate with the indemnifying party, at the indemnifying party’s
sole cost and expense, in connection with the defense or settlement of any Claim
in accordance with the terms hereof. If such Indemnified Party is entitled
pursuant to this Section 9 to elect to defend such Claim by counsel of its own
choosing and so elects, then the indemnifying party shall be responsible for any
good faith settlement of such Claim entered into by such Indemnified Party.
Except as provided in the immediately preceding sentence, no Indemnified Party
may pay or settle any Claim and seek reimbursement therefor under this
Section 9.
(d)    The provisions of this Section 9 shall survive the expiration or earlier
termination of this Agreement.
Section 10.
No Joint Venture.

The parties to this Agreement are not partners or joint venturers with each
other and nothing herein shall be construed to make them partners or joint
venturers or impose any liability as such on either of them.
Section 11.
Term; Renewal; Termination Without Cause.

(a)    This Agreement shall become effective on the Closing Date and shall
continue in operation, unless terminated in accordance with the terms hereof,
until the fifth anniversary of the Closing Date (the “Initial Term”). After the
Initial Term, this Agreement shall be deemed renewed automatically each year for
an additional one-year period (an “Automatic Renewal Term”), unless the Company
or the Manager elects not to renew this Agreement in accordance with
Section 11(b) or Section 11(d), respectively.
(b)    Notwithstanding any other provision of this Agreement to the contrary,
upon written notice provided to the Manager no later than 180 days prior to the
expiration of the Initial Term or any Automatic Renewal Term (the “Termination
Notice”), the Company may, without cause, in connection with the expiration of
the Initial Term or the then current Automatic Renewal Term, decline to renew
this Agreement (any such nonrenewal, a “Termination Without Cause”) upon the
affirmative vote of at least 75% of the Independent Directors that includes a
finding by such 75% majority either that (i) there has been unsatisfactory
performance by the Manager that is materially detrimental to the Company
Entities, taken as a whole, or (ii) the fees payable to the Manager under
Section 7 are not, taken as a whole, in accordance with then-current market
rates charged by asset management companies rendering services similar to those

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rendered by the Manager (“Above-Market Rates”), subject to Section 11(c), and
only after reasonable investigation by the Independent Directors as to the
market rates charged by similarly situated managers. In the event of a
Termination Without Cause, the Company shall pay the Manager the Fees Accrued
Upon Termination before or on the last day of the Initial Term or such Automatic
Renewal Term, as the case may be (the “Effective Termination Date”). The Company
may terminate this Agreement for cause pursuant to Section 13 even after a
Termination Notice and, in such case, no Fees Accrued Upon Termination shall be
payable.
(c)    Notwithstanding the provisions of Section 11(b), if the reason for
nonrenewal specified in the Company’s Termination Notice is that 75% of the
Independent Directors have determined that the fees payable to the Manager under
Section 7 are, taken as a whole, at Above-Market Rates, then the Company shall
not have the foregoing nonrenewal right if the Manager agrees that it will
continue to perform its duties hereunder during the Automatic Renewal Term that
would commence upon the expiration of the Initial Term or then current Automatic
Renewal Term at rates that at least 75% of the Independent Directors determine
to be at or below market rates, taken as a whole; provided, however, that if the
Independent Directors have made such a determination, the Manager shall have the
right to renegotiate the rate of fees payable to the Manager under Section 7 as
so determined by the Independent Directors, by delivering to the Company, not
less than 120 days prior to the pending Effective Termination Date, written
notice (a “Notice of Proposal to Negotiate”) of its intention to renegotiate the
fees payable to the Manager under Section 7. Thereupon, the Company and the
Manager shall endeavor to negotiate the fees payable to the Manager under
Section 7 in good faith. Provided that the Company and the Manager agree to a
revised fee structure under Section 7 within 60 days following the Company’s
receipt of the Notice of Proposal to Negotiate, the Termination Notice from the
Company shall be deemed of no force and effect, and this Agreement shall
continue in full force and effect on the terms stated herein, except that the
compensation structure shall be the revised compensation structure as then
agreed upon by the Company and the Manager. The Company and the Manager agree to
execute and deliver an amendment of this Agreement setting forth such revised
fee structure promptly upon reaching an agreement regarding same. If the Company
and the Manager are unable to agree to a revised compensation structure during
such 60-day period, this Agreement shall terminate on the Effective Termination
Date and the Company shall be obligated to pay the Manager the Fees Accrued Upon
Termination upon the Effective Termination Date.
(d)    No later than 180 days prior to the expiration of the Initial Term or the
then current Automatic Renewal Term, the Manager may deliver written notice to
the Company informing the Company of the Manager’s intention to discontinue
performance of services pursuant to this Agreement as of the upcoming expiration
date, whereupon this Agreement shall not be renewed and extended and this
Agreement shall terminate effective on the anniversary date of this Agreement
next following the delivery of such notice. The Company shall not be required to
pay to the Manager the Fees Accrued Upon Termination if the Manager terminates
this Agreement pursuant to this Section 11(d).

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(e)    Except as set forth in this Section 11, a non-renewal of this Agreement
pursuant to this Section 11 shall be without any further liability or obligation
of any party to the others, except as provided in Sections 6, 8, 9 and 15.
(f)    The Manager shall cooperate with the Company in executing an orderly
transition of the management of PAC’s consolidated assets to a new manager.
Section 12.
Assignments.

(a)    Assignments by the Manager. This Agreement shall terminate automatically
without payment of the Fees Accrued Upon Termination in the event of its
assignment, in whole or in part, by the Manager, unless such assignment has been
consented to in writing by (i) the Company with the consent of a majority of the
Independent Directors, and (ii) the Operating Partnership. Any such permitted
assignment shall bind the assignee under this Agreement in the same manner as
the Manager is bound, and the Manager shall be liable to the Company for all
acts or omissions of the assignee under any such assignment to the same extent
had such delegation not occurred. In addition, the assignee shall execute and
deliver to the Company a counterpart of this Agreement naming such assignee as
the Manager. Notwithstanding the foregoing, the Manager may, without the
approval of the Company’s Independent Directors, (A) assign this Agreement to an
Affiliate of the Manager, and (B) delegate to one or more of its Affiliates the
performance of any of its responsibilities hereunder so long as it remains
liable for any such Affiliate’s performance to the same extent had such
delegation not occurred, in each case so long as assignment or delegation does
not require the Company’s approval under the Investment Company Act (but if such
approval is required, the Company shall not unreasonably withhold, condition or
delay its consent). Nothing contained in this Agreement shall preclude any
pledge, hypothecation, assignment or other transfer of any amounts payable to
the Manager under this Agreement.
(b)    Assignments by the Company. This Agreement shall not be assigned by the
Company without the prior written consent of the Manager, except in the case of
assignment by the Company to another REIT or other organization which is a
successor (by merger, consolidation, purchase of assets, or other transaction)
to the Company, in which case such successor organization shall be bound under
this Agreement and by the terms of such assignment in the same manner as the
Company is bound under this Agreement.
Section 13.
Termination for Cause.

(a)    The Company may terminate this Agreement for cause effective upon 30
days’ prior written notice of termination from the Company to the Manager (a
“Cause Termination Notice”), without payment of any Fees Accrued Upon
Termination, upon the occurrence of:
(i)    a breach by the Manager, its agents or its assignees of any material
provision of this Agreement and such breach shall continue for a period of 60
days after written notice thereof specifying such breach and requesting that the
same be remedied in such 60-day period (or 90 days after written notice of such
breach if the Manager takes steps to cure such breach within 60 days of the
written notice);

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(ii)    a Bankruptcy Event with respect to the Manager,
(iii)    a Manager Change of Control which a majority of the Independent
Directors has determined to be materially detrimental to the Company Entities,
taken as a whole;
(iv)    the dissolution of the Manager; or
(v)    (A) a final determination by a court that the Manager has committed fraud
against the Company, the Manager has embezzled funds of the Company or the
Manager has otherwise acted, or failed to act, in a manner constituting bad
faith, willful misconduct, gross negligence or reckless disregard in the
performance of its duties under this Agreement, (B) which act of fraud,
embezzlement or other act or failure to act described in clause (v)(A) above has
had a material adverse effect on the consolidated business, operations and
financial condition of the Company, and (C) where a majority of the Independent
Directors of PAC has voted affirmatively to terminate this Agreement for cause
as a result of such fraud, embezzlement or other act or failure to act, which
vote shall have occurred within 30 days following the final determination
referred to in clause (v)(A) above; provided, however, if such fraud,
embezzlement or other act or failure to act was committed by a person other than
an executive officer of the Manager, then the Manager can cure the same by
terminating the employment of such person on or prior to the 30th day following
such final determination, in which event the Company shall cease to have the
right to terminate this Agreement for cause pursuant to this Section 13(a) and
any Cause Termination Notice previously given in reliance on this clause (v)
automatically shall be deemed to have been rescinded and nugatory.
(b)    The Manager may terminate this Agreement effective upon 60 days’ prior
written notice of termination to the Company if the Company shall default in the
performance or observance of any material term, condition or covenant contained
in this Agreement and such default shall continue for a period of 60 days after
written notice thereof specifying such default and requesting that the same be
remedied in such 60-day period. The Company shall be required to pay to the
Manager the Fees Accrued Upon Termination if the termination of this Agreement
is made pursuant to this Section 13(b).
(c)    The Manager may terminate this Agreement if the Company becomes required
to register as an investment company under the Investment Company Act, with such
termination deemed to occur immediately before such event, in which case the
Manager shall not be entitled to payment of the Fees Accrued Upon Termination.
Section 14.
Action Upon Termination.

From and after the effective date of termination of this Agreement pursuant to
Section 11, 12 or 13, the Manager shall not be entitled to compensation for
further services hereunder. If the Manager is terminated pursuant to
Sections 11(b) or 13(b), it shall be paid all Fees Accrued Upon Termination.
Upon any such termination, the Manager shall forthwith:

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(a)    after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled, pay over to each Company Entity all money
collected and held for the account of such Company Entity pursuant to this
Agreement;
(b)    deliver to the Board a full accounting, including a statement showing all
payments collected by it and a statement of all money held by it, covering the
period following the date of the last accounting furnished to the Board with
respect to the Company Entities;
(c)    deliver to the Board all property and documents of the Company Entities
then in the custody of the Manager; and
(d)    cooperate with the Company Entities to provide an orderly management
transition.
Section 15.
Release of Money or Other Property Upon Written Request.

The Manager agrees that any money or other property of the Company (which, for
the purposes of this Section 15, shall be deemed to include any and all of their
respective subsidiaries, if any) held by the Manager shall be held by the
Manager as custodian for the Company, and the Manager’s records shall be
appropriately and clearly marked to reflect the ownership of such money or other
property by the Company. Upon the receipt by the Manager of a written request
signed by a duly authorized officer of the Company requesting the Manager to
release to the Company any money or other property then held by the Manager for
the account of the Company under this Agreement, the Manager shall release such
money or other property to the Company or within a reasonable period of time,
but in no event later than 60 days following such request. Upon delivery of such
money or other property to the Company, the Manager shall not be liable to the
Company, the Board, PAC’s stockholders, the Operating Partnership’s partners or
any of the directors or equity holders of any subsidiary of the Company for any
acts or omissions by the Company in connection with the money or other property
released to the Company in accordance with this Section 15. The Company shall
indemnify the Manager Indemnified Parties against any and all Losses which arise
in connection with the Manager’s proper release of such money or other property
to the Company in accordance with the terms of this Section 15. Indemnification
pursuant to this provision shall be in addition to any right of the Manager
Indemnified Parties to indemnification under Section 9.
Section 16.
Miscellaneous.

(a)    Notices. All notices, requests, communications and demands (each a
“Notice”) to, with or upon any of the respective parties shall be in writing and
sent by (i) personal delivery, (ii) reputable overnight courier, (iii) facsimile
transmission with telephonic confirmation (provided that such Notice also is
sent contemporaneously by another method provided for in this Section 16(a)), or
(iv) registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below (or to such other address as may be hereafter
notified by the respective parties hereto in accordance with this
Section 16(a)):

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PAC:
Preferred Apartment Communities, Inc. 
3284 Northside Parkway NW, Suite 150
Atlanta, Georgia 30327
Attention: Leonard A. Silverstein, Esq.
Attention: Jeffrey R. Sprain, Esq.
Fax: (770) 818-4105
with a copy to:
Proskauer Rose LLP 
Eleven Times Square
New York, NY 10036
Attention: Peter M. Fass, Esq.
Attention: James P. Gerkis, Esq.
Fax: (212) 969-2900
The Operating Partnership:
Preferred Apartment Communities, Inc. 
3284 Northside Parkway NW, Suite 150
Atlanta, Georgia 30327
Attention: Leonard A. Silverstein, Esq.
Attention: Jeffrey R. Sprain, Esq.
Fax: (770) 818-4105
with a copy to:
Proskauer Rose LLP 
Eleven Times Square
New York, NY 10036
Attention: Peter M. Fass, Esq.
Attention: James P. Gerkis, Esq.
Fax: (212) 969-2900
The Manager:
Preferred Apartment Advisors, LLC 
3284 Northside Parkway NW, Suite 150
Atlanta, Georgia 30327
Attention: Leonard A. Silverstein, Esq.
Attention: Jeffrey R. Sprain, Esq.
Fax: (770) 818-4105
with a copy to:
Bass, Berry & Sims PLC
100 Peabody Place, Suite 900
Memphis, Tennessee 38103
Attention: John A. Good, Esq.
Fax: (901) 543-5901

Any Notice sent as aforesaid shall be deemed given and effective upon actual
receipt (or refusal of receipt).
(b)    Binding Nature of Agreement; Successors and Assigns; No Third Party
Beneficiaries. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, legal representatives, successors
and permitted assigns. Except as provided in this Agreement with respect to
indemnification of Indemnified Parties hereunder, nothing in this Agreement
shall confer any rights upon any Person other than the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
(c)    Integration. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof. The express terms hereof

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control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
(d)    Amendments. This Agreement, nor any terms hereof, may not be amended or
supplemented except in an instrument in writing executed by the parties hereto.
(e)    GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO IRREVOCABLY SUBMITS
TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND THE
UNITED STATES DISTRICT COURT FOR ANY DISTRICT WITHIN SUCH STATE FOR THE PURPOSE
OF ANY ACTION OR JUDGMENT RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND TO THE LAYING OF VENUE IN SUCH COURT.
(f)    WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.
(g)    No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of a party hereto, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
(h)    Costs and Expenses. Each party hereto shall bear its own costs and
expenses (including the fees and disbursements of counsel and accountants)
incurred in connection with the negotiations and preparation of this Agreement,
and all matters incident thereto. If any party hereto initiates any legal action
arising out of or in connection with this Agreement, the prevailing party shall
be entitled to recover from the other party all reasonable attorneys’ fees,
expert witness fees and expenses incurred by the prevailing party in connection
therewith.
(i)    Section Headings. The section and subsection headings in this Agreement
are for convenience in reference only and shall not be deemed to alter or affect
the interpretation of any provisions hereof.

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(j)    Counterparts. This Agreement may be executed (including by facsimile
transmission) with counterpart signature pages or in any number of separate
counterparts, and all of which taken together shall be deemed to constitute one
and the same instrument.
(k)    Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, each of the parties hereto has executed this Fifth Amended
and Restated Management Agreement as of the date first written above.
PREFERRED APARTMENT COMMUNITIES, INC.
By:
/s/ John A. Williams    
Name: John A. Williams
Title: Chief Executive Officer

PREFERRED APARTMENT COMMUNITIES OPERATING PARTNERSHIP, L.P.
By:
Preferred Apartment Communities, Inc.
its General Partner

By:
/s/ John A. Williams    
Name: John A. Williams
Title: Chief Executive Officer

PREFERRED APARTMENT ADVISORS, LLC
By:
NELL Partners, Inc.
its Managing Member

By:
/s/ John A. Williams
Name: John A. Williams
Title: Chief Executive Officer

[Signature Page to Fifth Amended and Restated Management Agreement]

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Exhibit A
Investment Guidelines
(as of August 7, 2014)

1.
No Investment shall be made by the Manager that would cause PAC to fail to
qualify as a REIT under the Code.

2.
No Investment shall be made by the Manager that would cause either PAC or the
Operating Partnership to be regulated as an investment company under the
Investment Company Act.

3.
The Manager may invest the proceeds of the Initial Public Offering, any future
offerings of PAC’s or the Operating Partnership’s securities for cash, and cash
from operations and capital transactions in interest-bearing, short-term,
investment-grade investments, subject to the requirements for PAC’s
qualification as a REIT under the Code.

4.
Investment Deployment Quantitative Limits:

i.
Other than for short-term investments made for cash management purposes, the
Manager may not invest (net of any debt placed at closing or assumed with the
transaction) more than 15% of the Company's total assets (as determined for the
Asset Management Fee) ("Total Assets") in any one single asset or transaction.
By way of example, if

Total Assets before proposed transaction:
$100 million
Proposed transaction asset value value:
$40 million
Total Assets after proposed transaction:
$140 million
15% of Total Assets after proposed transaction:
$21 million

        
then the Manager would be allowed to invest up to $21 million in the proposed
transaction.

ii.
No more than 25% of the Company’s Total Assets may be invested by the Manager in
any metropolitan statistical area (“MSA”).

iii.
The Company’s aggregate borrowings (secured and unsecured) will not exceed 75%
of the cost of its tangible assets at the time of any new borrowing.

5.
Investment Deployment Qualitative Guidelines:

(a)
Multifamily related assets where the associated real property asset is located
in top submarkets of an MSA with an aggregate population in excess of
approximately 1,000,000.

(a)
Multifamily related assets where the associated real property asset has at least
100 units.

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(b)
Multifamily related assets where the associated real property was built or
substantially renovated after January 1, 1990 and, to the knowledge of the
Manager, does not possess any material design flaws and is not functionally
obsolete.

(c)
Target multifamily properties which will generate sustainable cash available for
distribution sufficient to allow the Company to cover the dividends that it
expects to declare and pay and which have the potential for capital
appreciation.

(d)
Seek to acquire assets primarily for income, and secondarily for possible
capital gain.

(e)
The Manager may enter into forward purchase contracts and purchase option
agreements for multifamily properties and, in connection therewith, enter into
deposit arrangements, mezzanine loans or other performance assurances, as may be
necessary or appropriate.

(f)
The Manager may invest in non-multifamily related assets provided such
non-multifamily related assets do not exceed in the aggregate 20% of the
Company's assets measured for asset allocation purposes. For determining asset
allocations, the Manager shall calculate the value of the Company's assets based
on the adjusted cost of the Company’s assets before reduction for depreciation,
amortization, impairment charges and cumulative acquisition costs. In addition,
all non-multifamily related asset allocation calculations, including determining
the 20% threshold for non-multifamily assets, and not for any other purpose,
will include the full development project cost of the assets underlying any
Company mezzanine loan where: (1) the Company has a purchase option related to
the project under construction; and (2) the related mezzanine loan has been
fully funded (other than any interest reserve).

2