Unassociated Document

THIS TRADEMARK LICENSE AND ASSIGNMENT AGREEMENT (the “Agreement”) is made and entered into this 17th day of September, 2010, but effective as of July 29, 2010 (the “Effective Date”) by and between Preferred Apartment Communities, Inc. (“Licensor” or “Assignor”) and Preferred Apartment Advisors, LLC, (“Licensee” or Assignee”).

(a) The parties acknowledge that they are affiliated and related companies that are entering into this Agreement to memorialize an arrangement and agreement between them that was in existence as of the Effective Date, governing the chain of title, ownership and licensing of the service marks, trade names and logos, and any corresponding applications set forth in Exhibit A, which are annexed hereto and incorporated herein, and any other rights pertaining thereto (collectively, the “Marks”).

(b) As provided herein, the Licensee will license the use of the Marks from Licensor in connection with Licensee’s business and services. As soon as is reasonably practicable thereafter, Licensor will convert its pending intent-to-use trademark applications for the Marks set forth in Exhibit A (collectively, the “Applications”) to use based applications, following which Licensor will assign its ownership of the Marks and Applications to Licensee, who will become the new owner of the Marks and Applications.

(c) The parties acknowledge and agree that under the circumstances the assignments resulting under this Agreement do not constitute an assignment in gross or a present assignment of intent-to-use trademark applications and the parties and their successors waive the right to object to this Agreement and the underlying transfer and licensing of the rights in the Marks and Applications.

3. Assignment and Ownership of the Marks. Upon Licensor’s completed and successful conversion of the Applications to use based application (either by filing amendments to allege use and/or Statements of Use with the USPTO) Licensor will unconditionally and irrevocably assign and convey to Licensee, all of Licensor’s right, title and interest in and to the Marks (including common law rights), together with the good will associated with the Marks and the business conducted under the Marks, including but not limited to the right to sue for past infringement by third parties, and the right to register and use the Marks without limitation. Licensee may thereafter sell, assign, license, sublicense or otherwise transfer or register any or all rights granted to it in the Marks. Upon Licensor’s transfer of ownership of the Marks to Licensee, the License shall automatically terminate.

(b) Licensee hereby acknowledges Licensor’s right, title and interest in and to the Marks and Licensor’s exclusive right to use, register and license the use of the Marks and agrees that until ownership of the Marks is transferred to Licensee, not to claim or assert any (i) title to nor attempt to register the Marks anywhere in world or (ii) right to use the Marks, except to the extent expressly permitted by this Agreement.

(c) Licensee shall not, until after ownership of the Marks is transferred to Licensee, attempt to adopt, use or register without Licensor’s prior consent, any variation of the Marks, including translations, or any mark which is similar to or likely to be confusing with the Marks. If Licensor consents to the use of such a mark, this Agreement will be deemed to be amended to include such mark as part of the definition of the Marks, which shall then be subject to all of the terms of this Agreement.

(e) Until ownership of the Marks is transferred to Licensee (i) any and all goodwill arising from Licensee’s use or sublicensing of the Marks shall inure solely to the benefit of Licensor; and (ii) Licensee shall not, nor permit any one else, to take any action that could be detrimental to the good will associated with the Mark.

(f) The parties shall, during the term of this Agreement and after termination hereof, execute such documents, or perform such other and further acts, as the other may reasonably request from time to time to ensure that all right, title and interest in and to the Marks reside with the appropriate party or to otherwise transfer, assign, perfect, record, confirm, defend or enforce the other party’s rights in and to the Marks in accordance with this Agreement.

7. Infringement or Other Claims Against Third Parties. While the License is still in effect, Licensee shall notify Licensor promptly of any unauthorized use of the Marks by others (or marks which may be confusingly similar to the Marks) of which Licensee becomes aware. Licensor shall thereafter, at any time prior to Licensee becoming the owner of the Marks, have the sole right, at Licensee’s expense, to make any demand or bring any action on account of any such unauthorized use, whether such claims are grounded in trademark infringement, dilution, unfair competition, false designation of origin or other legal theory; Licensee will subsequently have such rights after Licensee assumes ownership of the Marks. Licensee shall cooperate fully with Licensor, as Licensor may reasonably request, in connection with any such action or demand brought by Licensor in accordance with this Agreement. Licensor shall directly pay all costs and expenses associated with such action or demand and Licensee shall reimburse Licensor for such costs and expenses as part of the consideration for the License and assignment. Licensor shall remit to Licensee any and all damages, settlement and/or compensation paid in connection with any such action or demand brought by Licensor. For the avoidance of doubt, following the transfer of ownership in the Marks to Licensee, Licensee shall have sole and unlimited discretion to decide whether or not to pursue infringement or other claims against third parties in connection with the Marks, and shall assume all costs and retain all damages, recoveries or settlement proceeds associated with same.

(a) General. Licensee recognizes that the valuable reputation and goodwill that is or will be attaching to the Marks is dependent for its preservation on the high quality standards prescribed and established by Licensor. Accordingly, Licensee is willing to comply with Licensor’s standards in order to maintain such quality and to cooperate with Licensor in preserving the reputation and goodwill attaching to the Marks while the License is in effect.

(b) Quality of the Services. Licensee agrees that during the term of the License, the services provided under the Marks and the Collateral Materials (as hereinafter defined) created by Licensee and its sublicensees, shall not fall below the level of quality (i) that is at all times generally customary within Licensee’s and sublicensees’ applicable industries, for other businesses similarly situated; and (ii) that is at all times required to remain in compliance with any applicable laws or regulations.

(c) Monitoring the Quality of the Services. Given the special relationship between the Licensor and Licensee as an affiliated group of companies with overlapping ownership, control and management, each party acknowledges (i) its own interest in maintaining the quality standards required under this Agreement, (ii) the unique ability of Licensor to monitor the activities of Licensee, and (iii) that the failure to maintain the quality standards or otherwise comply with this Agreement, could under certain circumstances, potentially result in a diminution or loss of trademark rights, to the detriment of Licensor and Licensee. Accordingly, the allocation of responsibilities for quality control as provided herein are inherently reasonable measures which should ensure adherence to quality standards and prevent any resultant harm to the parties involved as well as to the general public. Among other measures (i) except as otherwise provided, Licensee shall have the obligation and responsibility to police its own compliance with quality standards, (ii) Licensee shall act as Licensor’s agent for the purposes of monitoring sublicensees’ compliance with quality standards, and (iii) Licensor reserves the right to directly police the compliance of Licensee and sublicensees itself.

(d) Quality of the Collateral Materials. During the term of the License, Licensee shall furnish to Licensor prior to any use, publication, dissemination, distribution, disclosure or public display, for the approval of Licensor, copies of all advertising, marketing, websites and promotional material, in any form or media (including electronic or digital media) on which the Marks appear (the “Collateral Materials”). Licensor shall have the right to approve or disapprove any or all Collateral Materials in accordance with Licensor’s quality standards. Any Collateral Materials submitted to Licensor shall be deemed approved unless Licensor notifies Licensee to the contrary within ten (10) days after receipt of such Collateral Materials. If Licensor does not approve Collateral Materials, its rejection notice shall set forth the reasons for such rejection, and to the extent it is reasonable to do so, will also set forth the remedial measures required to be taken to bring the rejected Collateral Materials into compliance with Licensor’s quality control standards. Licensee shall not use, publish, disseminate, distribute, disclose or publicly display any Collateral Materials unless and until they have been approved by Licensor pursuant to this Section. All copies of the Collateral Materials that are distributed by Licensee shall be identical to the Collateral Materials approved by Licensor.

(e) Records, Audit and Inspection. Licensee will maintain adequate books, records and back-up documentation to allow Licensor to verify Licensee’s and sublicensees’ compliance with this Agreement. Such records must be maintained for a period of at least five (5) years after each such record is created, unless a longer period of time is required by applicable law or regulation. Upon five (5) days prior written notice, Licensor shall have the right, not more than four (4) times per year, by itself or through its designated agents/contractors who are not reasonably objectionable to Licensee and which may include Licensee, to conduct an audit and inspection of any or all of Licensee’s or sublicensees’ books, records, documentation, facilities, plants and equipment (including but not limited to computer hardware, software, servers, and data in any form or media) as are reasonably necessary to verify compliance with the terms of this Agreement. All individuals participating in the audit or inspection shall be under an obligation to maintain the confidentiality of any confidential information or trade secrets of Licensee or sublicensee that are disclosed in the course of the audit or inspection. The costs of such audits shall be paid for by Licensee.

(a) If this Agreement terminates prior to the transfer of ownership in the Marks to Licensee: (i) all rights of Licensee under the License granted hereunder shall terminate and automatically revert to Licensor; (ii) Licensee shall immediately discontinue the use of the Marks and thereafter shall no longer use or have the right to use the Marks or any variation or simulation thereof; (iii) Licensee shall destroy all printed materials bearing the Marks and (iv) Licensor shall have the right to terminate any and all sublicenses or assume any and all sublicenses and enter into a direct licensing relationship with sublicensees (if applicable).

(b) Licensee acknowledges that Licensee’s failure to cease the use of the Marks upon termination of this Agreement prior to the transfer of ownership in the Marks to Licensee shall result in immediate and irreparable damage to Licensor and to the consuming public generally. Licensee acknowledges and admits that there is no adequate remedy at law for such failure, and agrees that in the event of such failure, Licensor shall be entitled to equitable relief by way of temporary and permanent injunction, without being required to post a bond, and such other and further relief as any court with jurisdiction may deem just and proper.

(a) Licensee will, and will cause its sublicensees to agree to, indemnify, defend and hold harmless Licensor, its subsidiaries and affiliates, and any of their successors, assigns, employees, officers, directors, agents and contractors from and against any and all losses, liabilities, damages costs and expenses (including without limitation reasonable attorneys’ fees) in connection with any claim, demand, allegation, accusation or action (individually, a “Claim”) based upon, resulting from or related to Licensee’s or sublicensee’s: (i) goods or services provided under or in connection with the Marks; (ii) allegedly intentional or negligent act, omission or misrepresentation; or (iii) alleged breach of any warranties, representations or obligations under this Agreement or sublicense.

(b) Licensee will indemnify, defend and hold harmless Licensor and its subsidiaries and affiliates, and any of their successors, assigns, employees, officers, directors, agents and contractors from and against any and all losses, liabilities, damages costs and expenses (including without limitation reasonable attorneys’ fees) in connection with any Claim brought by third parties alleging that Licensee’s or sublicensee’s use of the Marks as permitted under this Agreement infringe the trademark or service mark of such third party. If any of the permitted uses of the Marks become, or in Licensor’s opinion are likely to become, the subject of a Claim, during the term of the License, Licensor may, at its option: (i) procure for Licensee and/or sublicensees the right to continue using the Mark as permitted under this Agreement; (ii) litigate with the party alleging infringement; or (iii) terminate this Agreement. THIS SECTION STATES THE SOLE AND EXCLUSIVE REMEDY OF LICENSEE AND SUBLICENSEES, AND THE ENTIRE LIABILITY OF LICENSOR, ANY PARENT, SUBSIDIARY, OR AFFILIATE OF LICENSOR, OR ANY OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, CONTRACTORS OR REPRESENTATIVES IN CONNECTION WITH ANY SUCH THIRD PARTY CLAIMS.

(c) The indemnification obligations as set forth in this Section are expressly conditioned upon the following: (i) the indemnifying party shall be notified of any Claim promptly in writing by the indemnitee; (ii) the indemnifying party shall have sole control of the defense or settlement of any Claim; and (iii) the indemnified party shall cooperate with the indemnifying party in a reasonable way to facilitate the settlement or defense of any Claim. The provisions of this Section shall survive the termination of this Agreement.

12. Reasonableness; Remedies. In the event either party is in breach, or threatens to breach any covenants of this Agreement, the parties acknowledge and agree that the other party would be greatly damaged and such damage(s) will be irreparable and difficult to quantify; therefore, such aggrieved party may apply for injunctive or other equitable relief to restrain such breach or threat of breach, without impairing, invalidating, negating or voiding such party’s rights to relief in either law or equity. In the event that any or all of the covenants hereunder are determined by the court of competent jurisdiction to be invalid or unenforceable, by reason that the breadth of restrictions is too great, or for any other reason, these covenants shall be modified and interpreted to the maximum extent to which they may be enforceable.

(b) The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions of this Agreement, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted. No waiver by any party of any breach of any provision hereof shall constitute a waiver of any other breach of that or any other provision hereof.

(d) Although Licensor shall have the right and authority to set and enforce general quality standards for Licensee’s and sublicensees’ use of the Marks during the term of the License, Licensor shall not have the right to, and shall not otherwise control, direct or manage the specific means or manner in which services are provided by Licensee or sublicensees under the Marks, or to control, direct or manage Licensee’s or sublicensees’ daily operations.

(e) The parties invoke the laws of the State of Georgia, USA, regarding the protection of their rights and enforcement of their obligations hereunder, and they mutually stipulate and agree that this Agreement is in all respects (including but not limited to, all matters of interpretation, validity, performance and the consequences of breach and termination) to be exclusively construed, governed and enforced in accordance with the internal laws of the State of Georgia, USA, excluding all conflict of laws rules, as from time to time amended and in effect. Any action related to or arising out of this Agreement shall be brought solely in a court of competent jurisdiction in the state of Georgia, Cobb County, and the parties irrevocably commit to the jurisdiction of said courts.

(g) All notices under this Agreement required to be given hereunder shall be given in writing and shall be delivered either by hand, by nationally recognized overnight courier, fees pre-paid by sender, or by facsimile or email (with confirmation copy sent by U.S. Mail) addressed to the receiving party. Any such notice shall be deemed delivered upon the earlier of actual receipt or three (3) days after deposit of such notice, properly addressed and delivery fees paid, with the overnight courier, or at the time of delivery by facsimile or email if such delivery is made by 5:00 o’clock p.m. and, if not, as of 8:00 o’clock a.m. (local time of the receiving party) on the next following business day.

(l) This Agreement together with the Exhibits hereto, if any, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement, and supersedes any prior agreements or understandings, whether oral or written, between the parties with respect to such subject matter. No amendment or waiver of this Agreement or any provision hereof shall be effective unless in a writing signed by both of the parties.

The parties acknowledge that the consideration for the license and assignment granted to Licensee herein includes Licensee’s indemnification obligations as well as Licensee’s agreement to pay all costs and fees associated with prosecuting and maintaining the Applications and pursuing infringement claims against third parties. Prior to the assignment, Licensee will reimburse Licensor for all prosecution and maintenance costs and fees. Subsequent to the assignment, Licensee will directly incur all such expenses.

Preferred Apartment Communities, Inc.		Preferred Apartment Advisors, LLC

By:	/s/ John A. Williams	By:	/s/ Leonard A. Silverstein
Name:	John A. Williams	Name:	Leonard A. Silverstein
Title:	Chief Executive Officer	Title:	Executive Vice President