Exhibit 10.1

 

 

 

LIMITED PARTNERSHIP AGREEMENT

OF

FIVE POINT OPERATING COMPANY, LP

a Delaware limited partnership

 

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE COMPANY AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE,
TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS AND IS
IN COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.

Dated as of October 1, 2017

 

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE 1 DEFINED TERMS

     1  

ARTICLE 2 ORGANIZATIONAL MATTERS

     15  

Section 2.1

 

Formation

     15  

Section 2.2

 

Name

     15  

Section 2.3

 

Principal Office and Resident Agent

     16  

Section 2.4

 

Power of Attorney

     16  

Section 2.5

 

Term

     17  

ARTICLE 3 PURPOSE

     17  

Section 3.1

 

Purpose and Business

     17  

Section 3.2

 

Powers

     17  

Section 3.3

 

Limits on Partner Relationship

     17  

Section 3.4

 

Representations and Warranties by the Partners

     17  

ARTICLE 4 CAPITAL CONTRIBUTIONS

     19  

Section 4.1

 

Capital Contributions of the Partners

     19  

Section 4.2

 

Issuances of Additional Partnership Interests

     19  

Section 4.3

 

Additional Funds and Capital Contributions

     20  

Section 4.4

 

Share Option Plans

     21  

Section 4.5

 

Dividend Reinvestment Plan, Share Incentive Plan or Other Plan

     23  

Section 4.6

 

No Interest; No Return

     23  

Section 4.7

 

Conversion or Redemption of Shares

     23  

Section 4.8

 

Other Contribution Provisions

     24  

Section 4.9

 

Transactions Effected Through a Special Partner

     24  

ARTICLE 5 DISTRIBUTIONS

     24  

Section 5.1

 

Requirement and Characterization of Distributions

     24  

Section 5.2

 

Tax Distributions

     24  

Section 5.3

 

Management Tax Distributions

     24  

Section 5.4

 

Distributions in Kind

     25  

Section 5.5

 

Amounts Withheld

     25  

Section 5.6

 

Distributions upon Liquidation

     25  

Section 5.7

 

Distributions to Reflect Additional Units

     25  

Section 5.8

 

Calculation of Distributions

     25  

Section 5.9

 

Restricted Distributions

     25  

ARTICLE 6 ALLOCATIONS

     25  

Section 6.1

 

Timing and Amount of Allocations of Net Income and Net Loss

     25  

Section 6.2

 

General Allocations

     25  

Section 6.3

 

Additional Allocation Provisions

     26  

Section 6.4

 

Tax Allocations

     28  

ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS

     28  

Section 7.1

 

Management

     28  

Section 7.2

 

Certificate of Limited Partnership

     29  

Section 7.3

 

Restrictions on the Managing General Partner’s Authority

     29  

Section 7.4

 

Reimbursement of the Managing General Partner and the Parent

     32  

Section 7.5

 

Meetings of the General Partners

     33  

Section 7.6

 

Duties and Obligations of the Non-Managing General Partners

     33  

Section 7.7

 

Outside Activities of the Managing General Partner and the Parent

     33  

Section 7.8

 

Transactions with Affiliates

     34  

Section 7.9

 

Indemnification

     34  

Section 7.10

 

Liability of the Managing General Partner

     36  

Section 7.11

 

Title to Partnership Assets

     37  

Section 7.12

 

Reliance by Third Parties

     37  

 

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ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

     38  

Section 8.1

 

Limitation of Liability

     38  

Section 8.2

 

Management of Business

     38  

Section 8.3

 

Outside Activities of Limited Partners

     38  

Section 8.4

 

Return of Capital

     38  

Section 8.5

 

Rights of Limited Partners Relating to the Partnership

     39  

Section 8.6

 

Partnership Right to Call Partnership Interests

     39  

Section 8.7

 

Certificates Evidencing Units

     39  

ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS

     40  

Section 9.1

 

Records and Accounting

     40  

Section 9.2

 

Partnership Year

     40  

Section 9.3

 

Reports

     40  

ARTICLE 10 TAX MATTERS

     40  

Section 10.1

 

Preparation of Tax Returns

     40  

Section 10.2

 

Tax Elections

     41  

Section 10.3

 

Tax Matters Partner

     41  

Section 10.4

 

Withholding

     42  

Section 10.5

 

Organizational Expenses

     42  

ARTICLE 11 PARTNER TRANSFERS AND WITHDRAWALS

     42  

Section 11.1

 

Transfer

     42  

Section 11.2

 

Transfer by Managing General Partner

     43  

Section 11.3

 

Transfers by Limited Partners and Non-Managing General Partners

     43  

Section 11.4

 

Substituted Limited Partners

     45  

Section 11.5

 

Assignees

     45  

Section 11.6

 

General Provisions

     45  

Section 11.7

 

Restrictions on Termination Transactions

     46  

ARTICLE 12 ADMISSION OF PARTNERS

     47  

Section 12.1

 

Admission of Successor Managing General Partner

     47  

Section 12.2

 

Admission or Withdrawal of Non-Managing General Partners

     47  

Section 12.3

 

Admission of Additional Limited Partners

     48  

Section 12.4

 

Amendment of Agreement and Certificate of Limited Partnership

     48  

Section 12.5

 

Limit on Number of Partners

     48  

Section 12.6

 

Admission

     49  

ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION

     49  

Section 13.1

 

Dissolution

     49  

Section 13.2

 

Winding Up

     49  

Section 13.3

 

Deemed Contribution and Distribution

     50  

Section 13.4

 

Rights of Holders

     50  

Section 13.5

 

Notice of Dissolution

     50  

Section 13.6

 

Reasonable Time for Winding-Up

     51  

Section 13.7

 

Cancellation of Certificate of Limited Partnership

     51  

ARTICLE 14 AMENDMENTS; MEETINGS; CONSENTS; MERGER, CONSOLIDATION OR CONVERSION

     51  

Section 14.1

 

Amendments

     51  

Section 14.2

 

Meetings and Consents of the Partners

     51  

Section 14.3

 

Merger, Consolidation or Conversion

     52  

ARTICLE 15 GENERAL PROVISIONS

     53  

Section 15.1

 

Redemption Rights of Qualifying Parties

     53  

Section 15.2

 

Addresses and Notice

     57  

 

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Section 15.3

 

Titles and Captions

     57  

Section 15.4

 

Pronouns and Plurals

     57  

Section 15.5

 

Further Action

     57  

Section 15.6

 

Binding Effect

     57  

Section 15.7

 

Waiver

     57  

Section 15.8

 

Counterparts

     58  

Section 15.9

 

Applicable Law; Consent to Jurisdiction; Jury Trial

     58  

Section 15.10

 

Entire Agreement

     58  

Section 15.11

 

Invalidity of Provisions

     58  

Section 15.12

 

No Partition

     58  

Section 15.13

 

No Third-Party Rights Created Hereby

     58  

Section 15.14

 

Delivery by Electronic Transmission

     59  

Section 15.15

 

No Rights as Shareholders

     59  

Exhibit A

 

EXAMPLES REGARDING ADJUSTMENT FACTOR

     A-1  

Exhibit B

 

NOTICE OF REDEMPTION

     B-1  

 

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LIMITED PARTNERSHIP AGREEMENT OF

FIVE POINT OPERATING COMPANY, LP

THIS LIMITED PARTNERSHIP AGREEMENT (as amended from time to time, the
“Agreement”) of FIVE POINT OPERATING COMPANY, LP, dated as of October 1, 2017,
is entered into by and among FIVE POINT HOLDINGS, LLC, a Delaware limited
liability company (the “Parent”), FIVE POINT OPCO GP, LLC, a Delaware limited
liability company (“Five Point GP”), LENFIVE OPCO GP, LLC, a Delaware limited
liability company (“LenFive GP”), LENFIVE SUB OPCO GP, LLC, a Delaware limited
liability company (“LenFive Sub GP”), and the other Partners (as defined below).

WHEREAS, a certificate of formation (as amended from time to time, the
“Certificate of Formation”) was filed in the office of the Delaware Secretary of
State on July 21, 2009, relating to the formation of a limited liability company
pursuant to the Delaware Limited Liability Company Act (the “LLC Act”) with the
name “Newhall Intermediary Holding Company, LLC” (the “Company”);

WHEREAS, a limited liability company agreement of the Company dated as of
July 31, 2009, was previously entered into by the Company, the Parent and the
members listed on Schedule I thereto;

WHEREAS, a Certificate of Amendment of the Certificate of Formation was filed in
the office of the Delaware Secretary of State on May 2, 2016, changing the name
of the Company to “Five Point Operating Company, LLC”;

WHEREAS, an Amended and Restated Limited Liability Agreement of Five Point
Operating Company, LLC, dated as of May 2, 2016 (the “Amended LLC Agreement”),
was entered into by the Parent and the members listed on Schedule I thereto;

WHEREAS, Section 14.3 of the Amended LLC Agreement provides that the Company may
be converted into a limited partnership pursuant to a plan of conversion that
has been approved by the Operating Managing Member (as defined in the Amended
LLC Agreement) upon the satisfaction of the conditions set forth therein;

WHEREAS, the conditions to conversion set forth in Section 14.3 of the Amended
LLC Agreement have been satisfied and a plan of conversion relating to the
conversion of the Company to a limited partnership (the “Plan of Conversion”)
was approved and adopted by the Operating Managing Member of the Company on
September 29, 2017; and

WHEREAS, pursuant to the Plan of Conversion, the Company was converted (the
“Conversion”) to Five Point Operating Company, LP, a Delaware limited
partnership (the “Partnership”), at 12:01 a.m. (the “Effective Time”) on
October 1, 2017, in accordance with Section 17-217 of the Delaware Revised
Uniform Limited Partnership Act, as amended, pursuant to the filing with the
Delaware Secretary of State on September 29, 2017 of a Certificate of Conversion
(the “Certificate of Conversion”) and a Certificate of Limited Partnership (as
amended from time to time, the “Certificate of Limited Partnership”); and

WHEREAS, the Plan of Conversion provides that, at the Effective Time, the
Partnership shall be governed by this Agreement, which shall be executed and
delivered by the Parent, Five Point GP, as the Managing General Partner, and by
LenFive GP and LenFive Sub GP, as Non-Managing General Partners.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE 1

DEFINED TERMS

The following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement:

“Acquired Percentage” has the meaning set forth in Section 15.1(b) hereof.

 

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“Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C.
§ 17-101 et. seq., as it may be amended from time to time, and any successor to
such statute.

“Actions” has the meaning set forth in Section 7.9 hereof.

“Additional Funds” has the meaning set forth in Section 4.3(a) hereof.

“Additional Limited Partner” means a Person who is admitted to the Partnership
as a Limited Partner pursuant to the Act and Section 12.3 hereof, who is shown
as such on the books and records of the Partnership, and who has not ceased to
be a Limited Partner pursuant to the Act and this Agreement.

“Adjusted Capital Account Deficit” means, with respect to any Partner, the
deficit balance, if any, in such Partner’s Capital Account as of the end of the
relevant Partnership Year, after giving effect to the following adjustments:

(i)    decrease such deficit by any amounts that such Partner is obligated to
restore pursuant to this Agreement or by operation of law upon liquidation of
such Partner’s Partnership Interest or that such Partner is deemed to be
obligated to restore pursuant to the penultimate sentence of each of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(ii)    increase such deficit by the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of “Adjusted Capital Account Deficit” is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.

“Adjustment Factor” means 1.0; provided, however, that in the event that:

(i)    the Parent (a) declares or pays a dividend on its outstanding Class A
Common Shares wholly or partly in Class A Common Shares or makes a distribution
to all holders of its outstanding Class A Common Shares wholly or partly in
Class A Common Shares, (b) splits or subdivides its outstanding Class A Common
Shares or (c) effects a reverse share split or otherwise combines its
outstanding Class A Common Shares into a smaller number of Class A Common
Shares, the Adjustment Factor shall be adjusted by multiplying the Adjustment
Factor previously in effect by a fraction, (i) the numerator of which shall be
the number of Class A Common Shares issued and outstanding on the record date
for such dividend, distribution, split, subdivision, reverse split or
combination (assuming for such purposes that such dividend, distribution, split,
subdivision, reverse split or combination has occurred as of such time) and
(ii) the denominator of which shall be the actual number of Class A Common
Shares (determined without the above assumption) issued and outstanding on the
record date for such dividend, distribution, split, subdivision, reverse split
or combination;

(ii)    the Parent distributes any rights, options or warrants to all holders of
its Class A Common Shares to subscribe for or to purchase or to otherwise
acquire Class A Common Shares, or other securities or rights convertible into,
exchangeable for or exercisable for Class A Common Shares (other than Class A
Common Shares issuable pursuant to a Qualified DRIP), at a price per share less
than the Value of a Class A Common Share on the record date for such
distribution (each a “Distributed Right”), then, as of the distribution date of
such Distributed Rights or, if later, the time such Distributed Rights become
exercisable, the Adjustment Factor shall be adjusted by multiplying the
Adjustment Factor previously in effect by a fraction (a) the numerator of which
shall be the number of Class A Common Shares issued and outstanding on the
record date (or, if later, the date such Distributed Rights become exercisable)
plus the maximum number of Class A Common Shares purchasable under such
Distributed Rights and (b) the denominator of which shall be the number of
Class A Common Shares issued and outstanding on the record date (or, if later,
the date such Distributed Rights become exercisable) plus a fraction (1) the
numerator of which is the maximum number of Class A Common Shares purchasable
under such Distributed Rights, multiplied by the minimum purchase price per
Class A Common Share under such Distributed Rights and (2) the denominator of
which is the Value of a Class A Common Share as of the record date (or, if
later, the date such Distributed Rights become exercisable); provided, however,
that, if any such Distributed Rights expire or become no longer exercisable,
then the Adjustment Factor shall be adjusted, effective retroactive to the date
of distribution (or, if later, the time the Distributed Rights become
exercisable) of the Distributed Rights, to reflect a reduced maximum number of
Class A Common Shares or any change in the minimum purchase price for the
purposes of the above fraction; and

 

2

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(iii)    the Parent shall, by dividend or otherwise, distribute to all holders
of its Class A Common Shares evidences of its indebtedness or assets (including
securities, but excluding any dividend or distribution referred to in
subsection (i) or (ii) above), which evidences of indebtedness or assets relate
to assets not received by the Parent and/or any Special Partner pursuant to a
pro rata distribution by the Partnership, then the Adjustment Factor shall be
adjusted to equal the amount determined by multiplying the Adjustment Factor in
effect immediately prior to the close of business as of the record date fixed
for the determination of shareholders entitled to receive such distribution by a
fraction (a) the numerator of which shall be such Value of a Class A Common
Share on such record date and (b) the denominator of which shall be the Value of
a Class A Common Share as of such record date less the then fair market value
(as determined by the Managing General Partner, whose determination shall be
conclusive) of the portion of the evidences of indebtedness or assets so
distributed applicable to one Class A Common Share.

Notwithstanding the foregoing, if any of the events in clause (i), (ii) or
(iii) above occur, no adjustments will be made to the Adjustment Factor for any
class or series of Partnership Interests to the extent that the Partnership
concurrently makes or effects a correlative distribution or payment to all of
the Partners holding Partnership Interests of such class or series, or effects a
correlative split, subdivision, reverse split or combination in respect of the
Partnership Interests of such class or series. If the Parent effects a dividend
that allows holders of Class A Common Shares to elect to receive cash or
additional Class A Common Shares, the Partnership may effect a correlative
distribution by distributing to all Partners holding Partnership Interests of
such class or series a combination of cash and additional Partnership Interests
in the same ratio as the ratio of cash and Class A Common Shares paid by the
Parent, without offering Partners an opportunity to elect to receive cash or
additional Partnership Interests. Any adjustments to the Adjustment Factor shall
become effective immediately after such event, retroactive to the record date,
if any, for such event. For illustrative purposes, examples of adjustments to
the Adjustment Factor are set forth on Exhibit A attached hereto.

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, “control” when used with respect to
any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agreement” has the meaning set forth in the preamble hereto.

“Amended LLC Agreement” has the meaning set forth in the recitals hereto.

“Annual Income Tax Liability” means, for each Partner, such Partner’s annual
federal and state income tax obligations for the applicable calendar year (and
reasonably estimated for each quarter for purposes of any quarterly estimated
income tax obligations) arising from the allocation to such Partner of income
recognized by the Partnership based on the assumption that such Partner is a
California corporation subject to the maximum federal and California state
income tax rates applicable to corporations and assuming state taxes are fully
deductible for federal income tax purposes. The computation of Annual Income Tax
Liability shall not take into account (i) any allocation of taxable income,
gain, deduction, or loss pursuant to Code Section 704(c), (ii) recovery of a
basis accruing to any Partner pursuant to Code Section 743, and (iii) for the
avoidance of doubt, any income, gain, loss or deduction relating to any payments
made by the Partnership or Parent pursuant to the Tax Receivable Agreement that
are treated as guaranteed payments within the meaning of Code Section 707(c)
(including amounts arising in respect of such guaranteed payments that are
required to be capitalized). For the avoidance of doubt, the computation of
Annual Income Tax Liability is hypothetical and does not take into account any
Partner’s tax attributes or status.

“Assignee” means a Person to whom a Partnership Interest has been Transferred
but who has not become a Partner, and who has the rights set forth in
Section 11.5 hereof.

“Board of Directors” means the Board of Directors of the Parent.

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to
close.

 

3

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“Business Plan” means an annual or multiyear business plan or budget for the
Partnership and its Subsidiaries (which may be in the form of a cash flow
projection) that the Managing General Partner proposes to present to the Board
of Directors for a formal review.

“Capital Account” means, with respect to any Partner, the Capital Account
maintained by the Managing General Partner for such Partner on the Partnership’s
books and records in accordance with the provisions of Regulations
Section 1.704-1(b)(2)(iv) and, to the extent consistent with such provisions,
the following provisions:

(i)    To each Partner’s Capital Account, there shall be added such Partner’s
Capital Contributions, such Partner’s distributive share of Net Income and any
items in the nature of income or gain that are specially allocated pursuant to
Section 6.3 hereof, and the amount of any Partnership liabilities assumed by
such Partner or that are secured by any property distributed to such Partner.

(ii)    From each Partner’s Capital Account, there shall be subtracted the
amount of cash and the Gross Asset Value of any property distributed to such
Partner pursuant to any provision of this Agreement, such Partner’s distributive
share of Net Losses and any items in the nature of expenses or losses that are
specially allocated pursuant to Section 6.3 hereof, and the amount of any
liabilities of such Partner assumed by the Partnership or that are secured by
any property contributed by such Partner to the Partnership (except to the
extent already reflected in the amount of such Partner’s Capital Contribution).

(iii)    In the event any interest in the Partnership is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Partner’s Capital Account of the transferor to the extent that it relates to the
Transferred interest.

(iv)    In determining the amount of any liability for purposes of
subsections (a) and (b) hereof, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and Regulations.

(v)    The provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Regulations promulgated under Code
Section 704, and shall be interpreted and applied in a manner consistent with
such Regulations. The Managing General Partner may modify the manner in which
the Capital Accounts are maintained in order to comply with such Regulations,
provided that the Managing General Partner determines that such modification is
not reasonably likely to have a material effect on the amounts distributable to
any Partner without such Person’s consent.

“Capital Contribution” means, with respect to any Partner, the amount of money
and the initial Gross Asset Value of any Contributed Property that such Partner
contributes or is deemed to have contributed to the Partnership or is deemed to
contribute pursuant to Article 4 hereof.

“Capital Share” means a share of any class or series of shares of the Parent now
or hereafter authorized, other than a Class A Common Share or Class B Common
Share.

“Cash Amount” means an amount of cash equal to the product of (i) the Value of a
Class A Common Share and (ii) the Class A Common Shares Amount, determined as of
the applicable Valuation Date.

“Certificate of Conversion” has the meaning set forth in the recitals hereto.

“Certificate of Formation” has the meaning set forth in the recitals hereto.

“Certificate of Limited Partnership” has the meaning set forth in the recitals
hereto.

“Charity” means an entity described in Code Section 501(c)(3), or any trust all
the beneficiaries of which are such entities.

“Class A Common Shares” means the Parent’s Class A common shares.

“Class A Common Shares Amount” means a number of Class A Common Shares equal to
(i) the product of (a) the number of Tendered Units and (b) the Adjustment
Factor, minus (ii) the quotient of (x) the aggregate amount of Excess
Distributions with respect to such Tendered Units, divided by (y) the Value of a
Class A Common Share as of

 

4

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the applicable Valuation Date; provided, however, that, in the event that the
Parent issues to all holders of Class A Common Shares as of a certain record
date rights, options, warrants or convertible or exchangeable securities
entitling the Parent’s stockholders to subscribe for or purchase Class A Common
Shares, or any other securities or property (collectively, the “Rights”), with
the record date for such Rights issuance falling within the period starting on
the date of the Notice of Redemption and ending on the day immediately preceding
the Specified Redemption Date, which Rights will not be distributed before the
relevant Specified Redemption Date, then the Class A Common Shares Amount shall
also include such Rights that a holder of that number of Class A Common Shares
would be entitled to receive, expressed, where relevant hereunder, as a number
of Class A Common Shares determined by the Managing General Partner.

“Class B Common Shares” means the Parent’s Class B common shares.

“Class A Unit” means a unit of Partnership Interest designated as a “Class A
Common Unit.”

“Class B Unit” means a unit of Partnership Interest designated as a “Class B
Common Unit.”

“Code” means the Internal Revenue Code of 1986, as amended and in effect from
time to time or any successor statute thereto, as interpreted by the applicable
Regulations thereunder. Any reference herein to a specific Section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.

“Common Share” means a Class A Common Share or a Class B Common Share.

“Common Unit” means a Class A Unit or a Class B Unit.

“Company” shall have the meaning set forth in the recitals hereto.

“Consent” means the consent to, approval of, or vote in favor of a proposed
action by a Partner given in accordance with Article 14 hereof.

“Consent of the Limited Partners and Non-Managing General Partners” means the
Consent of a Majority in Interest of the Limited Partners and Non-Managing
General Partners, with all of the Limited Partners and Non-Managing General
Partners voting together as a single class, which Consent shall be obtained
before the taking of any action for which it is required by this Agreement and,
except as otherwise provided in this Agreement, may be given or withheld by the
Limited Partners and Non-Managing General Partners in their discretion.

“Consent of the Partners” means the Consent of a Majority in Interest of the
Partners, with all of the Partners voting together as a single class, which
Consent shall be obtained before the taking of any action for which it is
required by this Agreement and, except as otherwise provided in this Agreement,
may be given or withheld by Partners in their discretion.

“Contributed Property” means each Property or other asset, in such form as may
be permitted by the Act, but excluding cash, contributed or deemed contributed
to the Partnership.

“Controlled Entity” means, as to any Person, (a) any corporation more than fifty
percent (50%) of the outstanding voting stock of which is owned by such Person
or such Person’s Family Members or Affiliates, (b) any trust, whether or not
revocable, of which such Person or such Person’s Family Members or Affiliates
are the sole beneficiaries, (c) any partnership of which such Person or an
Affiliate of such Person is the managing partner and in which such Person or
such Person’s Family Members or Affiliates hold partnership interests
representing at least twenty-five percent (25%) of such partnership’s capital
and profits and (d) any limited liability company of which such Person or an
Affiliate of such Person is the manager or managing member and in which such
Person or such Person’s Family Members or Affiliates hold membership interests
representing at least twenty-five percent (25%) of such limited liability
company’s capital and profits.

“Conversion” shall have the meaning set forth in the recitals hereto.

“Cut-Off Date” means the tenth (10th) Business Day after the Managing General
Partner’s receipt of a Notice of Redemption.

 

5

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“Debt” means, as to any Person, as of any date of determination, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person’s interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) lease obligations of such Person
that, in accordance with generally accepted accounting principles, should be
capitalized.

“Declination” has the meaning set forth in Section 15.1(a) hereof.

“Depreciation” means, for each Partnership Year or other applicable period, an
amount equal to the federal income tax depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
period, Depreciation shall be in an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the Managing
General Partner.

“DGCL” means the General Corporation Law of the State of Delaware, 8 Del. C.
Section 101, et seq., as amended, supplemented or restated from time to time,
and any successor to such statute.

“Distributed Right” has the meaning set forth in the definition of “Adjustment
Factor.”

“Effective Time” shall have the meaning set forth in the recitals hereto.

“Equity Plan” means any share or equity purchase plan, restricted share or
equity plan or other similar equity compensation plan now or hereafter adopted
by the Partnership, the Managing General Partner or the Parent.

“Equivalent Units” means, with respect to any class or series of Capital Shares,
Units with preferences, conversion and other rights (other than voting rights),
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption that are substantially the
same as (or correspond to) the preferences, conversion and other rights,
restrictions, limitations as to distributions, qualifications and terms and
conditions of redemption of such Capital Shares as appropriate to reflect the
relative rights and preferences of such Capital Shares as to the Class A Common
Shares and the other classes and series of Capital Shares as such Equivalent
Units would have as to Class A Units and the other classes and series of Units
corresponding to the other classes of Capital Shares, but not as to matters such
as voting for members of the Board of Directors that are not applicable to the
Partnership. For the avoidance of doubt, the voting rights, redemption rights
and rights to Transfer Equivalent Units need not be similar to the rights of the
corresponding class or series of Capital Shares, provided, however, with respect
to redemption rights, the terms of Equivalent Units must be such that the
Partnership complies with Section 4.7(b) of this Agreement.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Event of Withdrawal” has the meaning set forth in Section 12.2(b) hereof.

“Excess Distributions” means, as of any date and with respect to any Management
Unit owned by a Management Partner, (i) the aggregate amount of distributions
paid to such Management Partner pursuant to Section 5.3 as of such date, minus
the aggregate amount of all reductions in distributions pursuant to Sections 5.1
and 5.2 as a result of Section 5.3(b) as of such date, divided by (ii) the
aggregate amount of Management Units owned by such Management Partner as of such
date.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute thereto, and the rules and regulations of the SEC promulgated
thereunder.

“Existing LLC Agreement” has the meaning set forth in the recitals hereto.

 

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“Family Members” means, as to a Person that is an individual, such Person’s
spouse, ancestors, descendants (whether by blood or by adoption), brothers and
sisters and inter vivos or testamentary trusts of which only such Person and his
spouse, ancestors, descendants (whether by blood or by adoption), brothers and
sisters are beneficiaries.

“Funding Debt” means any Debt incurred by or on behalf of the Parent or any
Special Partner for the purpose of providing funds to the Partnership.

“General Partner” means a Managing General Partner or a Non-Managing General
Partner.

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis
for federal income tax purposes, except as follows:

(i)    The initial Gross Asset Value of any asset contributed by a Partner to
the Partnership shall be the gross fair market value of such asset as determined
by the Managing General Partner using such reasonable method of valuation as it
may adopt.

(ii)    The Gross Asset Values of all Partnership assets immediately prior to
the occurrence of any event described below shall be adjusted to equal their
respective gross fair market values, as determined by the Managing General
Partner using such reasonable method of valuation as it may adopt, as of the
following times:

(1)    the acquisition of an additional interest in the Partnership (other than
in connection with the execution of this Agreement but including, without
limitation, acquisitions pursuant to Section 4.2 hereof or contributions or
deemed contributions by the Parent pursuant to Section 4.2 hereof) by a new or
existing Partner in exchange for more than a de minimis Capital Contribution, if
the Managing General Partner reasonably determines that such adjustment is
necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;

(2)    the distribution by the Partnership to a Partner of more than a de
minimis amount of Partnership property as consideration for an interest in the
Partnership if the Managing General Partner reasonably determines that such
adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;

(3)    the liquidation of the Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g) (other than a liquidation caused by a termination
of the Partnership under Code Section 708(b)(1)(B)); and

(4)    at such other times as the Managing General Partner shall reasonably
determine necessary or advisable in accordance with Regulations
Sections 1.704-1(b) and 1.704-2.

(iii)    The Gross Asset Value of any Partnership asset distributed to a Partner
shall be the gross fair market value of such asset on the date of distribution
as determined by the Managing General Partner using such reasonable method of
valuation as it may adopt.

(iv)    The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this subsection (iv) to the
extent that the Managing General Partner reasonably determines that an
adjustment pursuant to subsection (ii) above is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this subsection (iv).

(v)    The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments made pursuant to the exercise of a
noncompensatory option, but only to the extent that such adjustments are taken
into account in determining Capital Accounts pursuant to Regulations
Section 1.704-1(b)(2)(iv)(s); provided, however, that Gross Asset Values shall
not be adjusted pursuant to this subsection (v) to the extent that the Managing
General Partner reasonably determines that an adjustment pursuant to
subsection (ii) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
subsection (v).

 

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(vi)    If the Gross Asset Value of a Partnership asset has been determined or
adjusted pursuant to subsection (i), subsection (ii), subsection (iv), or
subsection (v) above, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Net Income and Net Losses.

“Holder” means either (a) a Partner or (b) an Assignee that owns a Unit.

“Imputed Underpayment Amount” has the meaning set forth in Section 10.4 hereof.

“Incapacity” or “Incapacitated” means, (i) as to any Partner who is an
individual, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her person
or his or her estate; (ii) as to any Partner that is a corporation or limited
liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or the revocation of its certificate of
incorporation; (iii) as to any Partner that is a partnership, the dissolution
and commencement of winding up of the partnership; (iv) as to any Partner that
is an estate, the distribution by the fiduciary of the estate’s entire interest
in the Partnership; (v) as to any trustee of a trust that is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner’s creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner’s properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner’s consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment, or (h) an appointment referred to in clause (g)
above is not vacated within ninety (90) days after the expiration of any such
stay.

“Indemnitee” means (i) any Person made, or threatened to be made, a party to a
proceeding by reason of its status as (a) a General Partner, the Parent or a
Special Partner, or (b) a manager, member, director, officer, employee, agent or
representative of any General Partner, the Parent, any Special Partner or the
Partnership and (ii) such other Persons (including Affiliates, employees or
agents of any General Partner, the Parent, any Special Partner or the
Partnership) as the Managing General Partner may designate from time to time
(whether before or after the event giving rise to potential liability).

“IRS” means the United States Internal Revenue Service.

“Junior Unit” means a fractional share of the Partnership Interests of a
particular class or series that the Managing General Partner has authorized
pursuant to Section 4.2 hereof that has distribution rights, or rights upon
liquidation, winding up and dissolution, that are inferior or junior to the
Common Units.

“Lead Tendering Party” has the meaning set forth in Section 15.1(f) hereof.

“LenFive” means LenFive, LLC, a Delaware limited liability company.

“LenFive GP” has the meaning set forth in the preamble hereto.

“LenFive Sub GP” has the meaning set forth in the preamble hereto.

“Limited Partner” means any Person that is, from time to time, admitted to the
Partnership as a limited partner pursuant to the Act and this Agreement, and any
Substituted Limited Partner or Additional Limited Partner, each shown as such in
the books and records of the Partnership, in each case, that has not ceased to
be a limited partner of the Partnership pursuant to the Act and this Agreement,
in such Person’s capacity as a limited partner of the Partnership.

“Liquidating Event” has the meaning set forth in Section 13.1 hereof.

 

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“Liquidator” has the meaning set forth in Section 13.2(a) hereof.

“LLC Act” has the meaning set forth in the recitals hereto.

“Majority in Interest of the General Partners” means General Partners entitled
to vote on or consent to any matter holding more than fifty percent (50%) in
number of all outstanding Class A Units held by all General Partners entitled to
vote on or consent to such matter. For this purpose, the Managing General
Partner shall be deemed to hold all Class A Units held by any Special Partner.

“Majority in Interest of the Partners” means Partners (including the Parent, any
Special Partner, the Managing General Partner and any Controlled Entity of any
of them) entitled to vote on or consent to any matter holding more than fifty
percent (50%) in number of all outstanding Class A Units held by all Partners
(including the Parent, any Special Partner, the Managing General Partner and any
Controlled Entity of any of them) entitled to vote on or consent to such matter.

“Majority in Interest of the Limited Partners and Non-Managing General Partners”
means the Limited Partners and Non-Managing General Partners entitled to vote on
or consent to any matter holding more than fifty percent (50%) in number of all
outstanding Class A Units held by all Limited Partners and Non-Managing General
Partners entitled to vote on or consent to such matter. For this purpose, the
Managing General Partner shall be deemed to hold all Class A Units held by any
Special Partner.

“Management Partner” means Doni, Inc. and such additional Partners which shall
be designated as such from time to time by the Managing General Partner.

“Management Income Tax Liability” means, for each Management Partner, such
Management Partner’s federal and state income tax obligations for the calendar
year (and reasonably estimated for each quarter for purposes of any quarterly
estimated income tax obligations) arising from the allocation to such Management
Partner of income or gain recognized by the Partnership based on the assumptions
that (i) such Management Partner is an individual, trust or S corporation
(whichever is subject to the greatest income and/or franchise tax rate) resident
of or domiciled in California subject to the maximum federal and applicable
California state income and/or franchise tax rates, and (ii) until such time as
a Management Partner notifies the Partnership to the contrary, (x) state taxes
are fully deductible for federal income tax purposes and (y) such income or gain
is not “net investment income” for purposes of Code Section 1411. At such time
as a Management Partner notifies the Partnership that the assumptions made in
clause (ii) above are inaccurate, the calculation of the Management Income Tax
Liability with respect to such Management Partner shall be made by taking into
account such Management Partner’s tax position with respect to items listed in
clause (ii), provided, however, that such Management Partner shall promptly
notify the Partnership of any material change in such tax position. The
computation of the Management Income Tax Liability shall take into account any
allocation of taxable income, gain, deduction, or loss pursuant to Code
Section 704(c) to such Management Partner, but shall not take into account, for
the avoidance of doubt, any income, gain, loss or deduction relating to any
payments made by the Partnership or Parent pursuant to the Tax Receivable
Agreement that are treated as guaranteed payments within the meaning of Code
Section 707(c) (including amounts arising in respect of such guaranteed payments
that are required to be capitalized). For the avoidance of doubt, the
computation of Management Income Tax Liability is hypothetical and, to the
extent not specifically provided herein, does not take into account any
Management Partner’s tax attributes or status.

“Management Units” means Units issued to a Management Partner and any Units
issued pursuant to a split, subdivision, reverse split or combination in respect
of any such Units. As to any particular Management Unit, such Unit shall cease
to be a Management Unit when it has been redeemed or exchanged pursuant to
Section 15.1 or otherwise acquired by the Parent.

“Managing General Partner” means Five Point GP or any other Person that is, from
time to time, admitted to the Partnership as a Managing General Partner pursuant
to the Act and this Agreement, and, in each case, that has not ceased to be a
Managing General Partner pursuant to the Act and this Agreement, in such
Person’s capacity as a Managing General Partner of the Partnership.

“Net Income” or “Net Loss” means, for each Partnership Year, an amount equal to
the Partnership’s taxable income or loss for such year, determined in accordance
with Code Section 703(a) (for this purpose, all items of income,

 

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gain, loss or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

(i)    any income of the Partnership that is exempt from federal income tax and
not otherwise taken into account in computing Net Income (or Net Loss) pursuant
to this definition of “Net Income” or “Net Loss” shall be added to (or
subtracted from, as the case may be) such taxable income (or loss);

(ii)    any expenditure of the Partnership described in Code
Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Net Income (or Net Loss) pursuant to this definition
of “Net Income” or “Net Loss,” shall be subtracted from (or added to, as the
case may be) such taxable income (or loss);

(iii)    in the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to subsection (ii) or subsection (iii) of the definition of “Gross
Asset Value,” the amount of such adjustment shall be taken into account as gain
or loss from the disposition of such asset for purposes of computing Net Income
or Net Loss;

(iv)    gain or loss resulting from any disposition of property with respect to
which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;

(v)    in lieu of the depreciation, amortization and other cost recovery
deductions that would otherwise be taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for such
Partnership Year;

(vi)    to the extent that an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner’s interest in the Partnership, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and shall be taken into account for
purposes of computing Net Income or Net Loss; and

(vii)    notwithstanding any other provision of this definition of “Net Income”
or “Net Loss,” any item that is specially allocated pursuant to Section 6.3
hereof shall not be taken into account in computing Net Income or Net Loss. The
amounts of the items of Partnership income, gain, loss or deduction available to
be specially allocated pursuant to Section 6.3 hereof shall be determined by
applying rules analogous to those set forth in this definition of “Net Income”
or “Net Loss.”

“Net Proceeds” has the meaning set forth in Section 15.1(f) hereof.

“New Partnership Audit Procedures” means Subchapter C of Chapter 63 of Subtitle
F of the Code, as modified by Section 1101 of the Bipartisan Budget Act of 2015,
Pub. L. No. 114-74, and any successor statutes thereto or Regulations
promulgated or official guidance issued thereunder.

“New Securities” means (i) any rights, options, warrants or convertible or
exchangeable securities that entitle the holder thereof to subscribe for or
purchase, convert such securities into or exchange such securities for, Common
Shares or Preferred Shares, excluding Preferred Shares and grants under the
Share Option Plans, or (ii) any Debt issued by the Parent that provides any of
the rights described in clause (i).

“Non-Managing General Partner” means LenFive GP, LenFive Sub GP or any other
Person that is, from time to time, admitted to the Partnership as a Non-Managing
General Partner pursuant to the Act and this Agreement and, in each case, that
has not ceased to be a Non-Managing General Partner pursuant to the Act and this
Agreement, in such Person’s capacity as a Non-Managing General Partner.

“Nonrecourse Deductions” has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).

 

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“Nonrecourse Liability” has the meaning set forth in Regulations
Section 1.752-1(a)(2).

“Notice of Redemption” means a Notice of Redemption substantially in the form of
Exhibit B attached to this Agreement.

“Offered Shares” has the meaning set forth in Section 15.1(f) hereof

“Offering Units” has the meaning set forth in Section 15.1(f) hereof.

“Optionee” means a Person to whom a share option is granted under any Share
Option Plan.

“Parent” has the meaning set forth in the preamble hereto.

“Parent LLC Agreement” means the Amended and Restated Limited Liability Company
Agreement of the Parent, as now or hereafter amended, restated, modified,
supplemented or replaced.

“Partner” means any Person that is at the date of this Agreement, or that is
subsequently admitted to the Partnership as, a General Partner or a Limited
Partner in accordance with the terms of this Agreement and the Act, including
any Substituted Limited Partner or Additional Limited Partner, each shown as
such in the Register, in each case, that has not ceased to be either a General
Partner or a Limited Partner pursuant to the Act and this Agreement, in such
Person’s capacity as a General Partner or a Limited Partner, as the case may be.

“Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse
Debt, equal to the Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Regulations Section 1.704-2(i)(3).

“Partner Nonrecourse Debt” has the meaning set forth in Regulations
Section 1.704-2(b)(4).

“Partner Nonrecourse Deductions” has the meaning set forth in Regulations
Section 1.704-2(i)(1), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined
in accordance with the rules of Regulations Section 1.704-2(i)(1).

“Partnership” has the meaning set forth in the recitals hereto.

“Partnership Employee” means an employee of the Partnership or an employee of a
Subsidiary of the Partnership, if any.

“Partnership Interest” means an ownership interest in the Partnership held by a
General Partner or a Limited Partner and includes any and all benefits to which
the holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. There may be one or more classes or series of
Partnership Interests; however, notwithstanding that any General Partner, any
Special Partner and any other Limited Partner may have different rights and
privileges as specified in this Agreement (including differences in rights and
privileges with respect to their Partnership Interests), the Partnership
Interest held by any General Partner, any Special Partner or any other Limited
Partner and designated as being of a particular class or series shall not be
deemed to be a separate class or series of Partnership Interest from a
Partnership Interest having the same designation as to class and series that is
held by any other Partner solely because such Partnership Interest is held by a
General Partner, a Special Partner or any other Limited Partner having different
rights and privileges as specified under this Agreement. A Partnership Interest
may be expressed as a number of Class A Units, Preferred Units or other Units.

“Partnership Minimum Gain” has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).

“Partnership Record Date” means the record date established by the Managing
General Partner for the purpose of determining the Partners entitled to notice
of or to vote at any meeting of Partners or to consent to any matter, or to
receive any distribution or the allotment of any other rights, or in order to
make a determination of Partners for any other proper purpose, which, in the
case of a record date fixed for the determination of Partners entitled to
receive any distribution, shall (unless otherwise determined by the Managing
General Partner) generally be the same as the record date established by the
Parent for a dividend or distribution to its shareholders.

 

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“Partnership Year” means the fiscal year of the Partnership, which shall be the
calendar year.

“Percentage Interest” means, with respect to each Partner, as to any class or
series of Units, a fraction, expressed as a percentage, the numerator of which
is the aggregate number of Units of such class or series held by such Partner
and the denominator of which is the total number of Units of such class or
series held by all Partners. If not otherwise specified, “Percentage Interest”
shall be deemed to refer only to Class A Units. A Partner’s Percentage Interest
in Common Units means a fraction, expressed as a percentage, the numerator of
which is the sum of (i) the aggregate number of Class A Units held by such
Partner and (ii) 0.0003 multiplied by the aggregate number of Class B Units held
by such Partner, and the denominator of which is the sum of (a) the aggregate
number of Class A Units held by all Partners, and (b) 0.0003 multiplied by the
aggregate number of Class B Units held by all Partners.

“Permitted Lender Transferee” has the meaning set forth in the definition of
Permitted Transferee.

“Permitted Transfer” means (i) a Transfer by a Partner of all or part of its
Partnership Interest to the Parent, the Partnership, any Family Member,
Controlled Entity or Affiliate of such Partner, a Charity, or another Partner,
(ii) a Pledge and any Transfer of a Partnership Interest to a Permitted
Transferee pursuant to the exercise of remedies under a Pledge, or (iii) a
Transfer of Units by FPC-HF Venture I, LLC, in a single transaction or a series
of related transactions, to any Persons that, directly or indirectly, own an
interest in such entity.

“Permitted Transferee” means (i) any transferee of a Partner’s Partnership
Interest in a Permitted Transfer, (ii) any lender or lenders secured by a
Pledge, or agents acting on their behalf, to whom any Partnership Interest is
transferred pursuant to the exercise of remedies under a Pledge and any special
purpose entities owned and used by such lenders or agents for the purpose of
holding any such Partnership Interest (each a “Permitted Lender Transferee”),
and (iii) any Person, including any Third-Party Pledge Transferee designated by
any lender or lenders secured by a Pledge, or agents acting on their behalf, to
whom a Partnership Interest is transferred pursuant to the exercise of remedies
under a Pledge, whether before or after one or more Permitted Lender Transferees
take title to such Partnership Interest.

“Person” means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company or other
entity.

“Plan of Conversion” has the meaning set forth in the recitals hereto.

“Pledge” means a pledge by a Partner of all or any portion of its Partnership
Interest to one or more banks or lending institutions, or agents acting on their
behalf, which are not Affiliates of such Partner, as collateral or security for
a bona fide loan or other extension of credit.

“Preferred Share” means a share of the Parent now or hereafter authorized,
designated or reclassified that has dividend rights, or rights upon liquidation,
winding up and dissolution, that are superior or prior to the Common Shares.

“Preferred Unit” means a fractional share of the Partnership Interests of a
particular class or series that the Managing General Partner has authorized
pursuant to Section 4.1, Section 4.2 or Section 4.3 hereof that has distribution
rights, or rights upon liquidation, winding up and dissolution, that are
superior or prior to the Common Units.

“Pricing Agreements” has the meaning set forth in Section 15.1(f) hereof.

“Properties” means any assets and property of the Partnership such as, but not
limited to, interests in real property and personal property, including, without
limitation, fee interests, interests in ground leases, easements and rights of
way, interests in limited liability companies, joint ventures or partnerships,
interests in mortgages, and Debt instruments as the Partnership may hold from
time to time and “Property” means any one such asset or property.

“Qualified DRIP” means a dividend reinvestment plan of the Parent that permits
participants to acquire Class A Common Shares using the proceeds of dividends
paid by the Parent; provided, however, that if such shares are offered at a
discount, such discount must (i) be designed to pass along to the shareholders
of the Parent the savings enjoyed by the Parent in connection with the avoidance
of share issuance costs, and (ii) not exceed 5% of the value of a Class A Common
Share as computed under the terms of such dividend reinvestment plan.

 

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“Qualified Transferee” means an “accredited investor,” as defined in Rule 501
promulgated under the Securities Act.

“Qualifying LenFive Entity” means an entity that is: (i) a direct or indirect
wholly owned Subsidiary of LenFive; (ii) a single member limited liability
company that is disregarded as separate from its owner for U.S. federal income
tax purposes and which owns no assets (including contribution obligations within
the meaning of Regulations Section 1.752-2(k)(2)(i)(A)) other than (x) Class A
Units and (y) other assets (1) contributed to it by its owner if the
contribution is followed immediately by a contribution of equal net value by it
to the Partnership or (2) distributed by the Partnership to it if the
distribution is followed immediately by a distribution of equal net value by it
to its owner(s); and (iii) owns Class A Units that, together with Class A Units
owned by LenFive and its other direct and indirect wholly owned Subsidiaries,
exceed ten percent (10%) of the total number of all outstanding Class A Units;
provided, however, that any such entity shall cease to be a Qualifying LenFive
Entity if (A) LenFive fails to make a representative (which may be an employee
of an Affiliate) available for election to the Board of Directors; (B) Lennar
Corporation and Stuart Miller, together with any Family Members of Stuart
Miller, cease to own, directly or indirectly, equity securities of LenFive that
represent, in the aggregate, at least twenty-five percent (25%) of the aggregate
voting power of all equity securities of LenFive, unless the Managing General
Partner has given its prior written consent (which may be given or withheld in
its sole and absolute discretion) to such event; or (C) any Person or group (as
such term is defined under Section 13(d)(3) of the Exchange Act) directly or
indirectly own equity securities of LenFive that represent a percentage of the
aggregate voting power of LenFive in excess of that owned, directly or
indirectly, by Lennar Corporation or Stuart Miller, together with any Family
Members of Stuart Miller, unless the Managing General Partner has given its
prior written consent (which may be given or withheld in its sole and absolute
discretion) to such event.

“Qualifying Parent Entity” means an entity that is a single member limited
liability company that (i) is disregarded as separate from Parent for U.S.
federal income tax purposes, (ii) is wholly owned by Parent and (iii) owns no
assets (including contribution obligations within the meaning of Regulations
Section 1.752-2(k)(2)(i)(A)) other than (x) Class A Units or Class B Units, and
(y) other assets (1) contributed to it by its owner if the contribution is
followed immediately by a contribution of equal net value by it to the
Partnership or (2) distributed by the Partnership to it if the distribution is
followed immediately by a distribution of equal net value by it to its owner.

“Qualifying Party” means (a) a Partner, (b) an Additional Limited Partner,
(c) an Assignee who is the transferee of a Partner’s Partnership Interest in a
Permitted Transfer, or (d) a Person, including a lending institution as the
pledgee of a Pledge, who is the transferee of a Partner’s Partnership Interest
in a Permitted Transfer; provided, however, that a Qualifying Party shall not
include the Managing General Partner or any Special Partner.

“Redemption” has the meaning set forth in Section 15.1(a) hereof.

“Register” has the meaning set forth in Section 4.1 hereof.

“Regulations” means the income tax regulations under the Code, whether such
regulations are in proposed, temporary or final form, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).

“Regulatory Allocations” has the meaning set forth in Section 6.3(b)(viii)
hereof.

“Rights” has the meaning set forth in the definition of “Class A Common Shares
Amount.”

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

“Share Offering Funding” has the meaning set forth in Section 15.1(f) hereof.

“Share Offering Funding Amount” has the meaning set forth in Section 15.1(f)
hereof.

“Share Option Plans” means any share option plan now or hereafter adopted by the
Partnership or the Parent.

“Single Funding Notice” has the meaning set forth in Section 15.1(f) hereof.

 

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“Special Partner” means the Parent, Five Point GP and any other Partner that is
a wholly owned Subsidiary of the Parent.

“Special Redemption” has the meaning set forth in Section 15.1(a) hereof.

“Specified Redemption Date” means the tenth (10th) Business Day after the
receipt by the Managing General Partner of a Notice of Redemption; provided,
however, that no Specified Redemption Date with respect to any Class A Units
shall occur during the Twelve-Month Period applicable to such Class A Units
(except pursuant to a Special Redemption); and provided, further, that, if the
Parent and the Managing General Partner elect a Share Offering Funding pursuant
to Section 15.1(f), such Specified Redemption Date shall be deferred until the
next Business Day following the date of the closing of the Share Offering
Funding.

“Specified Threshold” means, as of any date, twenty percent (20%) of the total
assets of the Partnership and its consolidated subsidiaries as of the end of the
most recently completed fiscal quarter.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, joint venture, trust or other legal entity of which
such Person (either directly or through or together with another direct or
indirect Subsidiary of such Person) (i) owns a majority of the equity interests
having ordinary voting power for the election of directors or trustees or other
governing body, or (ii) otherwise controls the management, including through a
Person’s status as general partner, manager or managing member of the entity.

“Substituted Limited Partner” means a Person who is admitted to the Partnership
as a Limited Partner pursuant to Section 11.4 hereof.

“Surviving Partnership” has the meaning set forth in Section 11.7 hereof.

“Tax Items” has the meaning set forth in Section 6.4(a) hereof.

“Tax Receivable Agreement” means the Tax Receivable Agreement, dated as of
May 2, 2016, by and among the Parent, the Partnership, and the other Persons
named therein.

“Tendered Units” has the meaning set forth in Section 15.1(a) hereof.

“Tendering Party” has the meaning set forth in Section 15.1(a) hereof.

“Termination Transaction” means (i) any Transfer of all or any portion of the
Partnership Interest of the Parent or any Special Partner, other than (x) a
Transfer to the Partnership, the Parent or a Special Partner, or (y) a Transfer
permitted by Section 11.2, (ii) a merger, consolidation or other combination
involving the Parent or any Special Partner, on the one hand, and any other
Person, on the other, (iii) a sale, lease, exchange or other transfer of all or
substantially all of the assets of the Parent not in the ordinary course of its
business, whether in a single transaction or a series of related transactions,
(iv) a reclassification, recapitalization or change of the outstanding Class A
Common Shares (other than as a result of a share split, share dividend or
similar subdivision), or (v) the adoption of any plan of liquidation or
dissolution of the Parent.

“Third-Party Pledge Transferee” means a Qualified Transferee, other than a
Permitted Lender Transferee, that acquires a Partnership Interest pursuant to
the exercise of remedies by Permitted Lender Transferees under a Pledge and that
agrees to be bound by the terms and conditions of this Agreement.

“Transaction Consideration” has the meaning set forth in Section 11.7 hereof.

“Transfer” means any sale, assignment, bequest, conveyance, devise, gift
(outright or in trust), Pledge, encumbrance, hypothecation, mortgage, exchange,
transfer or other disposition or act of alienation, whether voluntary or
involuntary or by operation of law; provided, however, that when the term is
used in Article 11 hereof, “Transfer” does not include (a) any Redemption of
Class A Units by the Partnership, or acquisition of Class A Units by the Parent,
pursuant to Section 15.1 hereof, or (b) any redemption of Units pursuant to any
Unit Designation. The terms “Transferred” and “Transferring” have correlative
meanings.

“Twelve-Month Period” means, as to any Partnership Interest, a twelve-month
period ending on the later of (i) the day before the first (1st) anniversary of
a Qualifying Party’s first becoming a Holder of such Partnership Interest

 

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or (ii) May 1, 2017; provided, however, that if such Qualifying Party acquired
Class A Units in exchange for a membership interest in The Shipyard Communities,
LLC, then such Qualifying Party shall be deemed to have acquired such Class A
Units when the Qualifying Party acquired such membership interest in The
Shipyard Communities, LLC; and provided, further, that the Managing General
Partner may, by written agreement with a Qualifying Party, shorten or lengthen
the Twelve-Month Period applicable to such Qualifying Party.

“Unit” means a Common Unit, a Preferred Unit, a Junior Unit or any other
fractional share of the Partnership Interests that the Managing General Partner
has authorized pursuant to Section 4.1, Section 4.2 or Section 4.3 hereof.

“Unit Designation” has the meaning set forth in Section 4.2 hereof.

“Valuation Date” means the date of receipt by the Managing General Partner of a
Notice of Redemption pursuant to Section 15.1 herein, or such other date as
specified herein, or, if such date is not a Business Day, the immediately
preceding Business Day.

“Value” means, on any Valuation Date, the average of the daily Market Prices of
a Class A Common Share for ten (10) consecutive trading days immediately
preceding the Valuation Date (except that, in lieu of such average of daily
market prices, for purposes of Section 4.4 hereof (i) in the case of an exercise
of a share option under any Share Option Plans, the Market Price for the trading
day immediately preceding the date of exercise shall be used, and (ii) in the
case of delivery of Class A Common Shares pursuant to restricted share units or
other equity compensation plans, the Market Price on the date of such delivery
shall be used). The term “Market Price” on any date means, with respect to any
Class A Common Shares, the last sale price for such Class A Common Shares,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, for such Class A Common Shares,
in either case, as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Class A Common Shares are not listed or admitted to
trading on the New York Stock Exchange, as reported on the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Class A Common Shares
are listed or admitted to trading or, if the Class A Common Shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the principal automated
quotation system that may then be in use or, if the Class A Common Shares are
not quoted by any such system, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Class A
Common Shares selected by the Managing General Partner or, in the event that no
trading price is available for the Class A Common Shares, the fair market value
of the Class A Common Shares, as determined in good faith by the Managing
General Partner. In the event that the Class A Common Shares Amount includes
Rights (as defined in the definition of “Class A Common Shares Amount”) that a
holder of Class A Common Shares would be entitled to receive, then the Value of
such Rights shall be determined by the Managing General Partner acting in good
faith on the basis of such quotations and other information as it considers, in
its reasonable judgment, appropriate.

“Vesting Date” has the meaning set forth in Section 4.4 hereof.

“Withdrawing Partners” has the meaning set forth in Section 15.1(f) hereof.

ARTICLE 2

ORGANIZATIONAL MATTERS

Section 2.1    Formation. The Partnership is the result of the conversion of the
Company to a Delaware limited partnership at the Effective Time in accordance
with Section 17-217 of the Act pursuant to the Certificate of Conversion and the
Certificate of Limited Partnership which were filed with the Delaware Secretary
of State on September 29, 2017. Except as expressly provided herein to the
contrary, the rights and obligations of the Partners and the administration and
termination of the Partnership shall be governed by the Act. The Partnership
Interest of each Partner shall be personal property for all purposes.

Section 2.2    Name. The name of the Partnership is “Five Point Operating
Company, LP.” The Partnership’s business may be conducted under any other name
or names deemed advisable by the Managing General Partner, including the name of
the Managing General Partner or any Affiliate thereof. The words “Limited
Partnership,” “L.P.,” “LP” or similar words or letters shall be included in the
Partnership’s name where necessary for the purposes of complying with the laws
of any jurisdiction that so requires. The Managing General Partner may change
the name of the Partnership at any time and from time to time without the
consent or approval of any other Partner.

 

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Section 2.3    Principal Office and Resident Agent. The address of the principal
office of the Partnership in the State of Delaware is located at 1209 Orange
Street, Wilmington, County of New Castle, Delaware 19801, and the name and
address of the resident agent of the Partnership in the State of Delaware are
The Corporation Trust Company, 1209 Orange Street, Wilmington, County of New
Castle, Delaware 19801, or such other principal office and resident agent as the
Managing General Partner may from time to time designate. The Partnership may
maintain offices at such other place or places within or outside the State of
Delaware as the Managing General Partner may approve.

Section 2.4    Power of Attorney.

(a)    Each Partner and Assignee hereby irrevocably constitutes and appoints the
Managing General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to:

(i)    execute, swear to, seal, acknowledge, deliver, file and record in the
appropriate public offices (a) all certificates, documents and other instruments
(including, without limitation, this Agreement and the Certificate of Limited
Partnership and all amendments, supplements or restatements thereof) that the
Managing General Partner or the Liquidator deems appropriate or necessary to
form, qualify or continue the existence or qualification of the Partnership as a
limited partnership in the State of Delaware and in all other jurisdictions in
which the Partnership may conduct business or own property; (b) all instruments
that the Managing General Partner or any Liquidator deems appropriate or
necessary to reflect any amendment, change, modification or restatement of this
Agreement in accordance with its terms; (c) all conveyances and other
instruments or documents that the Managing General Partner or the Liquidator
deems appropriate or necessary to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement, including, without
limitation, a certificate of cancellation; (d) all conveyances and other
instruments or documents that the Managing General Partner or the Liquidator
deems appropriate or necessary to reflect the distribution or exchange of assets
of the Partnership pursuant to the terms of this Agreement; (e) all instruments
relating to the admission, acceptance, withdrawal, removal or substitution of
any Partner pursuant to the terms of this Agreement or the Capital Contribution
of any Partner; and (f) all certificates, documents and other instruments
relating to the determination of the rights, preferences and privileges relating
to Partnership Interests; and

(ii)    execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments the Managing General
Partner or any Liquidator determines are necessary or desirable to make,
evidence, give, confirm or ratify any vote, consent, approval, agreement or
other action that is made or given by the Partners hereunder or is consistent
with the terms of this Agreement.

Nothing contained herein shall be construed as authorizing the Managing General
Partner or any Liquidator to amend this Agreement except in accordance with
Section 14.1 hereof or as may be otherwise expressly provided for in this
Agreement.

(b)    The foregoing power of attorney is hereby declared to be irrevocable and
a special power coupled with an interest, in recognition of the fact that each
of the Partners and Assignees will be relying upon the power of the Managing
General Partner or the Liquidator to act as contemplated by this Agreement in
any filing or other action by it on behalf of the Partnership, and it shall
survive and not be affected by the subsequent Incapacity of any Partner or
Assignee and the Transfer of all or any portion of such Person’s Units or
Partnership Interest (as the case may be) and shall extend to such Person’s
heirs, successors, assigns and personal representatives. Each such Partner and
Assignee hereby agrees to be bound by any representation made by the Managing
General Partner or the Liquidator, acting in good faith pursuant to such power
of attorney; and each such Partner and Assignee hereby waives any and all
defenses that may be available to contest, negate or disaffirm the action of the
Managing General Partner or the Liquidator, taken in good faith under such power
of attorney. Each Partner and Assignee shall execute and deliver to

 

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the Managing General Partner or the Liquidator, within fifteen (15) days after
receipt of the Managing General Partner’s or the Liquidator’s request therefor,
such further designation, powers of attorney and other instruments as the
Managing General Partner or the Liquidator (as the case may be) deems necessary
to effectuate this Agreement and the purposes of the Partnership.
Notwithstanding anything else set forth in this Section 2.4(b), no Partner shall
incur any personal liability for any action of the Managing General Partner or
the Liquidator taken under such power of attorney.

Section 2.5    Term. The Partnership shall continue indefinitely unless the
Partnership is dissolved pursuant to the provisions of Article 13 hereof or as
otherwise provided by law.

ARTICLE 3

PURPOSE

Section 3.1    Purpose and Business. The purpose and nature of the Partnership
is to conduct any business, enterprise or activity permitted by or under the
Act, including, but not limited to, (i) to conduct the business of ownership,
construction, reconstruction, development, redevelopment, alteration,
improvement, maintenance, operation, sale, leasing, transfer, encumbrance,
conveyance and exchange of the Properties, (ii) to acquire and invest in any
securities and/or loans relating to the Properties, (iii) to enter into any
partnership, joint venture, business trust arrangement, limited liability
company or other similar arrangement to engage in any business permitted by or
under the Act, or to own interests in any entity engaged in any business
permitted by or under the Act, (iv) to conduct the business of providing
property and asset management and brokerage services, whether directly or
through one or more partnerships, joint ventures, Subsidiaries, business trusts,
limited liability companies or similar arrangements, and (v) to do anything
necessary or incidental to the foregoing. The Partnership shall have all powers
necessary or desirable to accomplish the purposes enumerated. In connection with
the foregoing, the Partnership shall have full power and authority to enter
into, perform and carry out contracts of any kind, to borrow and lend money and
to issue evidence of indebtedness, whether or not secured by mortgage, deed of
trust, pledge or other lien and, directly or indirectly, to acquire and
construct additional Properties necessary, useful or desirable in connection
with its business.

Section 3.2    Powers. The Partnership shall have the power to do any and all
acts and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership,
including, without limitation, full power and authority, directly or through its
ownership interest in other entities, to enter into, perform and carry out
contracts of any kind, to borrow and lend money and to issue evidence of
indebtedness, whether or not secured by mortgage, deed of trust, pledge or other
lien, to acquire, own, manage, improve and develop real property and lease,
sell, transfer and dispose of real property.

Section 3.3    Limits on Partner Relationship. Except as otherwise provided in
this Agreement, no Partner shall have any authority to act for, bind, commit or
assume any obligation or responsibility on behalf of the Partnership, its
properties or any other Partner. No Partner, in its capacity as a Partner under
this Agreement, shall be responsible or liable for any indebtedness or
obligation of another Partner, nor shall the Partnership be responsible or
liable for any indebtedness or obligation of any Partner, incurred either before
or after the execution and delivery of this Agreement by such Partner, except as
to those responsibilities, liabilities, indebtedness or obligations incurred
pursuant to and as limited by the terms of this Agreement and the Act.

Section 3.4    Representations and Warranties by the Partners.

(a)    Each Partner that is an individual (including, without limitation, each
Additional Limited Partner or Substituted Limited Partner as a condition to
becoming an Additional Limited Partner or a Substituted Limited Partner)
represents and warrants to, and covenants with, each other Partner that (i) the
consummation of the transactions contemplated by this Agreement to be performed
by such Partner will not result in a breach or violation of, or a default under,
any material agreement by which such Partner or any of such Partner’s property
is bound, or any statute, regulation, order or other law to which such Partner
is subject, (ii) such Partner is neither a “foreign person,” within the meaning
of Code Section 1445(f) nor a “foreign partner,” within the meaning of Code
Section 1446(e), and (iii) this Agreement is binding upon, and enforceable
against, such Partner in accordance with its terms.

(b)    Each Partner that is not an individual (including, without limitation,
each Additional Limited Partner or Substituted Limited Partner as a condition to
becoming an Additional Limited Partner or a

 

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Substituted Limited Partner) represents and warrants to, and covenants with,
each other Partner that (i) all transactions contemplated by this Agreement to
be performed by it have been duly authorized by all necessary action, including,
without limitation, that of its partner(s), committee(s), trustee(s),
beneficiaries, directors and/or shareholder(s)(as the case may be) as required,
(ii) the consummation of such transactions shall not result in a breach or
violation of, or a default under, its partnership or operating agreement, trust
agreement, certificate of incorporation or bylaws (as the case may be), any
material agreement by which such Partner or any of such Partner’s properties or
any of its partners, members, beneficiaries, trustees or shareholders (as the
case may be) is or are bound, or any statute, regulation, order or other law to
which such Partner or any of its partners, members, trustees, beneficiaries or
shareholders (as the case may be) is or are subject, (iii) such Partner is
neither a “foreign person,” within the meaning of Code Section 1445(f), nor a
“foreign partner,” within the meaning of Code Section 1446(e), and (iv) this
Agreement is binding upon, and enforceable against, such Partner in accordance
with its terms.

(c)    Each Partner (including, without limitation, each Substituted Limited
Partner, as a condition to becoming a Substituted Limited Partner) represents
and warrants that it is an “accredited investor,” as defined in Rule 501
promulgated under the Securities Act, and represents, warrants and agrees that
it has acquired and, as of the date hereof, continues to hold its interest in
the Partnership for its own account for investment purposes only and not for the
purpose of, or with a view toward, the resale or distribution of all or any part
thereof, and not with a view toward selling or otherwise distributing such
interest or any part thereof at any particular time or under any predetermined
circumstances. Each Partner further represents and warrants that it is a
sophisticated investor, able and accustomed to handling sophisticated financial
matters for itself, particularly real estate investments, and that it has a
sufficiently high net worth that it does not anticipate a need for the funds
that it has invested in the Partnership in what it understands to be a highly
speculative and illiquid investment. Notwithstanding the foregoing, the
representations and warranties contained in the first sentence of this
Section 3.4(c) shall not apply to any Permitted Lender Transferee, it being
understood that a Permitted Lender Transferee may be subject to a legal
obligation to sell, distribute or otherwise dispose of any Partnership Interest
acquired pursuant to the exercise of remedies under a Pledge; provided, however,
that any such Permitted Lender Transferee must be a Qualified Transferee.

(d)    Each Partner (including, without limitation, each Additional Limited
Partner or Substituted Limited Partner as a condition to becoming an Additional
Limited Partner or a Substituted Limited Partner) represents and warrants to the
Partnership, the Managing General Partner and each other Partner that (i) to its
knowledge, it is in compliance with the requirements of the Executive Order
No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (the “Order”) and other similar
requirements contained in the rules and regulations of the Office of Foreign
Assets Control, Department of the Treasury (“OFAC”) and in any enabling
legislation or other Executive Orders or regulations in respect thereof (the
Order and such other rules, regulations, legislation or orders are collectively
called the “Orders”); and (ii) neither such Partner nor any of its Affiliates
(A) is listed on the Specially Designated Nationals and Blocked Person List
maintained by OFAC pursuant to the Order and/or on any other list of terrorists
or terrorist organizations maintained pursuant to any of the rules and
regulations of OFAC or pursuant to any other applicable Orders (such lists are
collectively referred to as the “Lists”), (B) is a Person (as defined in the
Order) who has been determined by competent authority to be subject to the
prohibitions contained in the Orders; or (C) is owned or controlled by
(including without limitation by virtue of such Person being a director or
owning voting shares or interests), or acts for or on behalf of, any person on
the Lists or any other Person who has been determined by competent authority to
be subject to the prohibitions contained in the Orders.

(e)    The representations and warranties contained in Sections 3.4(a), 3.4(b),
3.4(c) and 3.4(d) hereof shall survive the execution and delivery of this
Agreement by the Managing General Partner and the Non-Managing General Partner
(and, in the case of an Additional Limited Partner or a Substituted Limited
Partner, the admission of such Additional Limited Partner or Substituted Limited
Partner as a Partner in the Partnership) and the dissolution, liquidation and
termination of the Partnership.

(f)    Each Partner (including, without limitation, each Additional Limited
Partner or Substituted Limited Partner as a condition to becoming an Additional
Limited Partner or a Substituted Limited Partner) hereby acknowledges that no
representations as to potential profit, cash flows, funds from operations or
yield, if any, in respect of the Partnership or the Parent have been made by the
Parent, the Partnership, the Managing General Partner, any Partner or any
employee or representative or Affiliate of any of them, and that projections and
any other information, including, without limitation, financial and descriptive
information and documentation, that may have been in any manner submitted to
such Partner shall not constitute any representation or warranty of any kind or
nature, express or implied.

 

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(g)    Notwithstanding the foregoing, the Managing General Partner may permit
the modification of any of the representations and warranties contained in
Sections 3.4(a), 3.4(b), 3.4(c) and 3.4(d) above as applicable to any Partner
(including, without limitation any Additional Limited Partner or Substituted
Limited Partner or any transferee of either) provided that such representations
and warranties, as modified, shall be set forth in either (i) a Unit Designation
applicable to the Units held by such Partner or (ii) a separate writing
addressed to the Partnership and the Managing General Partner.

ARTICLE 4

CAPITAL CONTRIBUTIONS

Section 4.1    Capital Contributions of the Partners. The existing Partners (or
their predecessors in interest) have previously made Capital Contributions to
the Partnership (or to the Company prior to Conversion). Except as provided by
law or in Section 4.2, Section 4.3 or Section 10.4 hereof, the Partners shall
have no obligation or, except with the prior written consent of the Managing
General Partner, right to make any Capital Contributions or loans to the
Partnership. The Managing General Partner shall cause to be maintained in the
principal business office of the Partnership, or such other place as may be
determined by the Managing General Partner, the books and records of the
Partnership, which shall include, among other things, a register containing the
name, address, and number of Units of each Partner, and such other information
as the Managing General Partner may deem necessary or desirable (the
“Register”). The Register shall not be deemed part of this Agreement. The
Managing General Partner shall from time to time update the Register as
necessary to accurately reflect the information therein, including as a result
of any sales, exchanges or other Transfers, or any redemptions, issuances or
similar events involving Units. Any reference in this Agreement to the Register
shall be deemed a reference to the Register as in effect from time to time.
Subject to the terms of this Agreement, the Managing General Partner may take
any action authorized hereunder in respect of the Register without any need to
obtain the consent of any other Partner. No action of any Partner shall be
required to amend or update the Register. Except as required by law, no Partner
shall be entitled to receive a copy of the information set forth in the Register
relating to any Partner other than itself.

Section 4.2    Issuances of Additional Partnership Interests. Subject to the
rights of any Holder of any Partnership Interest set forth in a Unit
Designation:

(a)    General. Partnership Interests shall be represented by Units. Initially,
all Units shall be designated as either “Class A Common Units” or “Class B
Common Units.” At the Effective Time, each Class A Common Unit of the Company
was automatically converted into a Class A Common Unit of the Partnership, and
each Class B Common Unit of the Company was automatically converted into a
Class B Common Unit of the Partnership. Class A Units and Class B Units may be
held by a General Partner or a Limited Partner. Except as expressly provided
herein, Class A Units and Class B Units shall entitle the holders thereof to
equal rights under this Agreement. The Partners, and the number and class of
Units held by each Partner, as of the effectiveness of this Agreement is set
forth in the Register. The Managing General Partner is hereby authorized to
cause the Partnership to issue additional Partnership Interests, in the form of
Units, for any Partnership purpose, at any time or from time to time, to the
Partners (including the Parent or any other Special Partner) or to other
Persons, and to admit such Persons as Additional Limited Partners, for such
consideration and on such terms and conditions as shall be established by the
Managing General Partner, all without the approval of any Partner or any other
Person. Without limiting the foregoing, the Managing General Partner is
expressly authorized to cause the Partnership to issue Units (i) upon the
conversion, redemption or exchange of any Debt, Units or other securities issued
by the Partnership, (ii) to The Shipyard Communities, LLC or its members in
connection with a redemption or exchange of Class A Units of The Shipyard
Communities, LLC pursuant to the limited liability company agreement of such
entity, (iii) for less than fair market value, (iv) for no consideration, (v) in
connection with any merger of any other Person into the Partnership, or
(vi) upon the contribution of property or assets to the Partnership. Any
additional Partnership Interests may be issued in one or more classes, or one or
more series of any of such classes, with such designations, preferences,
conversion or other rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms and conditions of redemption (including,
without limitation, rights that may be senior or otherwise entitled to
preference over existing Partnership Interests) as shall be determined by the
Managing General Partner, without the approval of any Partner or any other
Person, and set forth in a written document thereafter attached to and made an
exhibit to this Agreement, which exhibit shall be an amendment to this Agreement
and shall be incorporated herein by this reference (each, a “Unit Designation”).
Without limiting the generality of the foregoing, the Managing General Partner
shall have authority to specify the allocations of items of Partnership income,
gain, loss, deduction and credit to each such class or series of Partnership
Interests. Except to the extent specifically set forth in any Unit Designation,
a Partnership Interest of any

 

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class or series, other than a Class A Unit, shall not entitle the holder thereof
to vote on, or consent to, any matter. Upon the issuance of any additional
Partnership Interest, the Managing General Partner shall amend the Register and
the books and records of the Partnership as appropriate to reflect such
issuance.

(b)    Issuances to the Parent or any Special Partner. No additional Units shall
be issued to the Parent or any Special Partner unless (i) the additional Units
are issued to all Partners holding Class A Units in proportion to their
respective Percentage Interests in the Class A Units, (ii) (a) the additional
Units are (x) Class A Units issued in connection with an issuance of Class A
Common Shares, (x) Class B Units issued in connection with an issuance of
Class B Common Shares, or (z) Equivalent Units issued in connection with an
issuance of Preferred Shares, New Securities or other interests in the Parent
(other than Common Shares), and (b) the Parent contributes to the Partnership
the net cash proceeds or other consideration received in connection with the
issuance of such Class A Common Shares, Class B Common Shares, Preferred Shares,
New Securities or other interests in the Parent, (iii) the additional Units are
issued upon the conversion, redemption or exchange of Debt, Units or other
securities issued by the Partnership, or (iv) the additional Units are issued
pursuant to Section 4.3(b), Section 4.3(e), Section 4.4 or Section 4.5.

(c)    No Preemptive Rights. Except as expressly provided in this Agreement or
in any Unit Designation, no Person, including, without limitation, any Partner
or Assignee, shall have any preemptive, preferential, participation or similar
right or rights to subscribe for or acquire any Partnership Interest.

Section 4.3    Additional Funds and Capital Contributions.

(a)    General. The Managing General Partner may, at any time and from time to
time, determine that the Partnership requires additional funds (“Additional
Funds”) for the acquisition or development of additional Properties, for the
redemption of Units or for such other purposes as the Managing General Partner
may determine. Additional Funds may be obtained by the Partnership, at the
election of the Managing General Partner, in any manner provided in, and in
accordance with, the terms of this Section 4.3 without the approval of any
Partner or any other Person.

(b)    Additional Capital Contributions. The Managing General Partner, on behalf
of the Partnership, may obtain any Additional Funds by accepting Capital
Contributions from any Partners or other Persons. In connection with any such
Capital Contribution (of cash or property), the Managing General Partner is
hereby authorized to cause the Partnership from time to time to issue additional
Units (as set forth in Section 4.2 above) in consideration therefor, and the
Percentage Interests of the Managing General Partner and the Partners shall be
adjusted to reflect the issuance of such additional Units.

(c)    Loans by Third Parties. The Managing General Partner, on behalf of the
Partnership, may obtain any Additional Funds by causing the Partnership to incur
Debt to any Person (other than, except as contemplated in Section 4.3(d), the
Managing General Partner or any Special Partner) upon such terms as the Managing
General Partner determines appropriate, including making such Debt convertible,
redeemable or exchangeable for Units; provided, however, that the Partnership
shall not incur any such Debt which is subject to Section 7.3(d)(ii) without
complying with Section 7.3, and the Partnership shall not incur any such Debt if
any Limited Partner would be personally liable for the repayment of such Debt
(unless such Limited Partner otherwise agrees).

(d)    Managing General Partner and Special Partner Loans. The Managing General
Partner, on behalf of the Partnership, may obtain any Additional Funds by
causing the Partnership to incur Debt with the Managing General Partner and/or
any Special Partner if (i) such Debt is, to the extent permitted by law, on
substantially the same terms and conditions (including interest rate, repayment
schedule, and conversion, redemption, repurchase and exchange rights) as Funding
Debt incurred by the Managing General Partner or any Special Partner, as
applicable, the net proceeds of which are loaned to the Partnership to provide
such Additional Funds, or (ii) such Debt is on terms and conditions no less
favorable to the Partnership than would be available to the Partnership from any
third party; provided, however, that the Partnership shall not incur any such
Debt which is subject to Section 7.3(d)(ii) without complying with Section 7.3,
and the Partnership shall not incur any such Debt if any Partner would be
personally liable for the repayment of such Debt (unless such Partner otherwise
agrees).

(e)    Issuance of Securities by the Parent. The Parent shall not issue any
additional Class A Common Shares, Class B Common Shares, Preferred Shares or New
Securities unless the Parent contributes the cash proceeds or other
consideration received from the issuance of such additional Class A Common
Shares, Class B Common Shares, Preferred Shares or New Securities (as the case
may be), and from the exercise of the rights

 

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contained in any such additional New Securities, to the Partnership in exchange
for (x) in the case of an issuance of Class A Common Shares, Class A Units,
(y) in the case of an issuance of Class B Common Shares, Class B Units, or
(z) in the case of an issuance of Preferred Shares or New Securities, Equivalent
Units; provided, however, that notwithstanding the foregoing, the Parent may
issue Class A Common Shares, Class B Common Shares, Preferred Shares or New
Securities (a) pursuant to Section 4.4 or Section 15.1(b) hereof, (b) pursuant
to a dividend or distribution (including any share split) of Class A Common
Shares, Class B Common Shares, Preferred Shares or New Securities to all holders
of Class A Common Shares, Class B Common Shares, Preferred Shares or New
Securities (as the case may be), (c) upon a conversion, redemption or exchange
of Preferred Shares, (d) upon a conversion, redemption, exchange or exercise of
New Securities, or (e) in connection with an acquisition of Units or a property
or other asset to be owned, directly or indirectly, by the Parent. In the event
of any issuance of additional Class A Common Shares, Class B Common Shares,
Preferred Shares or New Securities by the Parent, and the contribution to the
Partnership, by the Parent, of the cash proceeds or other consideration received
from such issuance, the Partnership shall pay the Parent’s expenses associated
with such issuance, including any underwriting discounts or commissions. In the
event that the Parent issues any additional Class A Common Shares or Class B
Common Shares, and contributes the cash proceeds or other consideration received
from the issuance thereof to the Partnership, the Partnership is authorized to
issue a number of Class A Units or Class B Units (as the case may be) to the
Parent equal to the number of Class A Common Shares or Class B Common Shares so
issued, divided by the Adjustment Factor then in effect, in accordance with this
Section 4.3(e) without any further act, approval or vote of any Partner or any
other Persons. In the event that the Parent issues any Capital Shares or New
Securities and contributes the cash proceeds or other consideration received
from the issuance thereof to the Partnership, the Partnership is authorized to
issue to the Parent an equal number of Equivalent Units that correspond to the
class or series of Capital Shares or New Securities so issued, in accordance
with this Section 4.3(e) without any further act, approval or vote of any
Partner or any other Persons.

Section 4.4    Share Option Plans.

(a)    Options Granted to Persons other than Partnership Employees. If at any
time or from time to time, in connection with any Share Option Plan, an option
to purchase Class A Common Shares granted to a Person other than a Partnership
Employee is duly exercised:

(i)    The Parent, shall, as soon as practicable after such exercise, make a
Capital Contribution to the Partnership in an amount equal to the exercise price
paid to the Parent by such exercising party in connection with the exercise of
such share option.

(ii)    Notwithstanding the amount of the Capital Contribution actually made
pursuant to Section 4.4(a)(i) hereof, the Parent shall be deemed to have
contributed to the Partnership as a Capital Contribution an amount equal to the
Value of a Class A Common Share as of the date of exercise, multiplied by the
number of Class A Common Shares then being issued in connection with the
exercise of such share option. In exchange for such Capital Contribution, the
Partnership shall issue a number of Class A Units to the Parent equal to the
quotient of (a) the number of Class A Common Shares issued in connection with
the exercise of such share option, divided by (b) the Adjustment Factor then in
effect.

(b)    Options Granted to Partnership Employees. If at any time or from time to
time, in connection with any Share Option Plan, an option to purchase Class A
Common Shares granted to a Partnership Employee is duly exercised:

(i)    The Parent shall sell to the Partnership, and the Partnership shall
purchase from the Parent, the number of Class A Common Shares as to which such
share option is being exercised. The purchase price per Class A Common Share for
such sale of Class A Common Shares to the Partnership shall be the Value of a
Class A Common Share as of the date of exercise of such share option.

(ii)    The Partnership shall sell to the Optionee (or if the Optionee is an
employee of a Subsidiary of the Partnership, the Partnership shall sell to such
Subsidiary of the Partnership, which in turn shall sell to the Optionee), for a
cash price per share equal to the Value of a Class A Common Share at the time of
the exercise, a number of Class A Common Shares equal to (a) the exercise price
paid to the Parent by the exercising party in connection with the exercise of
such share option, divided by (b) the Value of a Class A Common Share at the
time of such exercise.

 

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(iii)    The Partnership shall transfer to the Optionee (or if the Optionee is
an employee of a Subsidiary of the Partnership, the Partnership shall transfer
to such Subsidiary of the Partnership, which in turn shall transfer to the
Optionee) at no additional cost, as additional compensation, a number of Class A
Common Shares equal to the number of Class A Common Shares described in
Section 4.4(b)(i) hereof, less the number of Class A Common Shares described in
Section 4.4(b)(ii) hereof.

(iv)    The Parent shall, as soon as practicable after such exercise, make a
Capital Contribution to the Partnership of an amount equal to all proceeds
received (from whatever source, but excluding any payment in respect of payroll
taxes or other withholdings) by the Parent in connection with the exercise of
such share option. In exchange for such Capital Contribution, the Partnership
shall issue a number of Class A Units to the Parent equal to the quotient of
(a) the number of Class A Common Shares issued in connection with the exercise
of such share option, divided by (b) the Adjustment Factor then in effect.

(c)    Restricted Shares Granted to Partnership Employees. If at any time or
from time to time, in connection with any Equity Plan (other than a Share Option
Plan), any Class A Common Shares are issued to a Partnership Employee (including
any Class A Common Shares that are subject to forfeiture in the event such
Partnership Employee’s employment with the Partnership or a Subsidiary of the
Partnership is terminated and any Class A Common Shares issued in settlement of
a restricted stock unit or similar award) in consideration for services
performed for the Partnership or a Subsidiary of the Partnership:

(i)    the Parent shall issue such number of Class A Common Shares as are to be
issued to the Partnership Employee in accordance with the Equity Plan;

(ii)    the following events will be deemed to have occurred: (a) the Parent
shall be deemed to have sold such shares to the Partnership (or if the
Partnership Employee is an employee or other service provider of a Subsidiary of
the Partnership, to such Subsidiary of the Partnership) for a purchase price
equal to the Value of such shares, (b) the Partnership (or such Subsidiary of
the Partnership) shall be deemed to have delivered the shares to the Partnership
Employee, (c) the Parent shall be deemed to have contributed the purchase price
to the Partnership as a Capital Contribution, and (d) if the Partnership
Employee is an employee of a Subsidiary of the Partnership, the Partnership
shall be deemed to have contributed such amount to the capital of the Subsidiary
of the Partnership; and

(iii)    the Partnership shall issue to the Parent a number of Class A Units
equal to the number of newly issued Class A Common Shares, divided by the
Adjustment Factor then in effect, in consideration for a deemed Capital
Contribution in an amount equal to (x) the number of newly issued Class A Units,
multiplied by (y) a fraction the numerator of which is the Value of a Class A
Common Share, and the denominator of which is the Adjustment Factor then in
effect.

(d)    Restricted Shares Granted to Persons other than Partnership Employees. If
at any time or from time to time, in connection with any Equity Plan (other than
a Share Option Plan), any Class A Common Shares are issued to a Person other
than a Partnership Employee in consideration for services performed for the
Parent, the Managing General Partner, the Partnership or a Subsidiary of the
Partnership:

(i)    the Parent shall issue such number of Class A Common Shares as are to be
issued to such Person in accordance with the Equity Plan; and

(ii)    the Parent shall be deemed to have contributed the Value of such Class A
Common Shares to the Partnership as a Capital Contribution, and the Partnership
shall issue to the Parent a number of newly issued Class A Units equal to the
number of newly issued Class A Common Shares, divided by the Adjustment Factor
then in effect.

(e)    Future Share Incentive Plans. Nothing in this Agreement shall be
construed or applied to preclude or restrain the Parent, the Managing General
Partner or the Partnership from adopting, modifying or terminating share
incentive plans for the benefit of employees, directors or other business
associates of the Parent, the Managing General Partner, the Partnership or any
of their Affiliates. The Partners acknowledge and agree that, in the

 

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event that any such plan is adopted, modified or terminated by the Parent, the
Managing General Partner shall have the power, without the Consent of the
Limited Partners and Non-Managing General Partners, to amend this Section 4.4 in
accordance with Section 7.3(e).

(f)    Issuance of Class A Units. The Partnership is expressly authorized to
issue Class A Units in the numbers specified in this Section 4.4 without any
further act, approval or vote of any Partner or any other Persons.

Section 4.5    Dividend Reinvestment Plan, Share Incentive Plan or Other Plan.
Except as may otherwise be provided in this Article 4, all amounts received by
the Parent in respect of any dividend reinvestment plan, share incentive or
other share or subscription plan or agreement, either (a) shall be utilized by
the Parent to effect open market purchases of Class A Common Shares, or (b) if
the Parent elects instead to issue new Class A Common Shares with respect to
such amounts, shall be contributed by the Parent to the Partnership in exchange
for additional Class A Units. Upon such contribution, the Partnership will issue
to the Parent a number of Class A Units equal to the number of newly issued
Class A Common Shares, divided by the Adjustment Factor then in effect.

Section 4.6    No Interest; No Return. No Partner shall be entitled to interest
on its Capital Contribution or on such Partner’s Capital Account. Except as
provided herein or by law, no Partner shall have any right to demand or receive
the return of its Capital Contribution from the Partnership.

Section 4.7    Conversion or Redemption of Shares.

(a)    Conversion of Preferred Shares. If, at any time, any Preferred Shares are
converted into Class A Common Shares, in whole or in part, then an equal number
of Equivalent Units held by the Parent that correspond to the class or series of
Preferred Shares so converted shall automatically be converted into a number of
Class A Units equal to the quotient of (i) the number of Class A Common Shares
issued upon such conversion, divided by (ii) the Adjustment Factor then in
effect.

(b)    Redemption of Preferred Shares. If, at any time, any Preferred Shares are
redeemed, repurchased or otherwise acquired (whether by exercise of a put or
call, automatically or by means of another arrangement) by the Parent for cash,
then, immediately prior to such redemption of Preferred Shares, the Partnership
shall redeem an equal number of Equivalent Units held by the Parent that
correspond to the class or series of Preferred Shares so redeemed, repurchased
or acquired upon the same terms and for the same price per Equivalent Unit, as
such Preferred Shares are redeemed, repurchased or acquired.

(c)    Redemption, Repurchase or Forfeiture of Class A Common Shares. If, at any
time, any Class A Common Shares are redeemed, repurchased or otherwise acquired
(whether by exercise of a put or call, upon forfeiture of any award granted
under any Equity Plan, automatically or by means of another arrangement) by the
Parent, then, immediately prior to such redemption, repurchase or acquisition of
Class A Common Shares, the Partnership shall redeem a number of Class A Units
held by the Parent equal to the quotient of (i) the number of Class A Common
Shares so redeemed, repurchased or acquired, divided by (ii) the Adjustment
Factor then in effect, such redemption, repurchase or acquisition to be upon the
same terms and for the same price per Class A Unit (after giving effect to
application of the Adjustment Factor) as such Class A Common Shares are
redeemed, repurchased or acquired.

(d)    Redemption, Repurchase or Forfeiture of Class B Common Shares. If, at any
time, any Class B Common Shares are redeemed, repurchased or otherwise acquired
by the Parent, then, immediately prior to such redemption, repurchase or
acquisition of Class B Common Shares, the Partnership shall redeem a number of
Class B Units held by the Parent equal to the quotient of (i) the number of
Class B Common Shares so redeemed, repurchased or acquired, divided by (ii) the
Adjustment Factor then in effect, such redemption, repurchase or acquisition to
be upon the same terms and for the same price per Class B Unit (after giving
effect to application of the Adjustment Factor) as such Class B Common Shares
are redeemed, repurchased or acquired.

(e)    Conversion of Class B Common Shares. If, at any time, any Class B Common
Shares are converted into Class A Common Shares, in whole or in part, then an
equal number of Class B Units held by the Parent shall automatically be
converted into a number of Class A Units equal to the number of Class A Common
Shares issued in such conversion.

 

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(f)    Noncompensatory Options. The tax treatment of the Partnership and the
recipient or holder of an interest in the Partnership that is a noncompensatory
option, within the meaning of Regulations Section 1.721-2(f), upon the issuance
or exercise of such option, shall be determined in accordance with Regulations
Section 1.721-2.

Section 4.8    Other Contribution Provisions. In the event that any Partner is
admitted to the Partnership and is given a Capital Account in exchange for
services rendered to the Partnership, such transaction shall be treated by the
Partnership and the affected Partner as if the Partnership had compensated such
Partner in cash and such Partner had contributed the cash to the capital of the
Partnership, and received Class A Units with a Value equal to the sum
contributed to the Partnership. In addition, with the consent of the Managing
General Partner, one or more Partners (including any Special Partner) may enter
into a contribution agreement with the Partnership which has the effect of
providing a guarantee of certain obligations of the Partnership.

Section 4.9    Transactions Effected Through a Special Partner. If the Parent is
obligated or permitted to sell securities to the Partnership or make a capital
contribution to the Partnership, or entitled to receive Units from the
Partnership, under this Agreement, including without limitation under
Section 4.2(b), Section 4.3(e) and Section 4.4, in lieu of the Parent, any other
Special Partner may effect such transaction.

ARTICLE 5

DISTRIBUTIONS

Section 5.1    Requirement and Characterization of Distributions. Subject to
Section 5.2, Section 5.3(b) and the terms of any Unit Designation that provides
for a class or series of Preferred Units with a preference with respect to the
payment of distributions, from time to time, as determined by the Managing
General Partner, the Managing General Partner shall cause the Partnership to pay
distributions, in such amounts as the Managing General Partner shall determine,
to the Holders of Common Units in accordance with their respective Percentage
Interests of Common Units on the applicable Partnership Record Date. If the
Managing General Partner determines that any distribution is a regular quarterly
distribution, then the portion of such distribution payable with respect to any
Units that were not outstanding during the entire quarterly period in respect of
which such distribution is made (other than any Units issued to the Parent in
connection with the issuance of Common Shares or Capital Shares by the Parent)
shall be prorated based on the portion of the quarterly period that such Units
were outstanding.

Section 5.2    Tax Distributions. Subject to Section 5.3(b) but otherwise
notwithstanding any provision in this Agreement to the contrary, for each
calendar year, the Managing General Partner shall make quarterly cash
distributions to the Partners such that each Partner receives an amount (after
taking into account all distributions previously received by such Partner during
the calendar year pursuant to Sections 5.1 and 5.2) that is at least equal to
its Annual Income Tax Liability (as reasonably estimated for such quarter). All
distributions made to Partners pursuant to this Section 5.2 shall be treated as
advance distributions and shall be taken into account in determining the amount
subsequently distributable to Partners under Section 5.1 and
Section 13.2(a)(ii). All distributions made pursuant to this Section 5.2 shall
be made on a pro rata basis in accordance with Percentage Interests.

Section 5.3    Management Tax Distributions.

(a)    Notwithstanding any provision in this Agreement to the contrary, for each
calendar year, the Managing General Partner shall make quarterly cash
distributions to the Management Partners pursuant to this Section 5.3 such that
each Management Partner receives an amount (after taking into account all
distributions previously received by such Management Partner during the calendar
year pursuant to Sections 5.1, 5.2 and 5.3) that is at least equal to such
Management Partner’s Management Income Tax Liability (as reasonably estimated
for such quarter).

(b)    All distributions made in respect of Management Units pursuant to this
Section 5.3 shall be treated as advance distributions and shall be taken into
account in determining the amount subsequently distributable to the Holder of
such Management Units under Sections 5.1, 5.2 and 13.2(a)(ii).

(c)    To the extent quarterly distributions made pursuant to this Section 5.3
during the calendar year are less than the Management Income Tax Liability of
the Management Partner as calculated for the entire calendar year, the
Partnership shall distribute any shortfall to the Management Partner no later
than 90 days after the close of the calendar year.

 

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Section 5.4    Distributions in Kind. No Holder may demand to receive property
other than cash as provided in this Agreement. The Managing General Partner may
cause the Partnership to make a distribution in kind of Partnership assets or
Partnership Interests to the Holders, and such assets or Partnership Interests
shall be distributed in such a fashion as to ensure that the Value, or if other
than Class A Shares, the fair market value is distributed and allocated in
accordance with Articles 5, 6 and 10 hereof.

Section 5.5    Amounts Withheld. All amounts withheld pursuant to the Code or
any provisions of any state or local tax law and Section 10.4 hereof with
respect to any allocation, payment or distribution to any Holder shall be
treated as amounts paid or distributed to such Holder pursuant to Section 5.1
hereof for all purposes under this Agreement.

Section 5.6    Distributions upon Liquidation. Notwithstanding the other
provisions of this Article 5, upon the occurrence of a Liquidating Event, the
assets of the Partnership shall be distributed to the Holders in accordance with
Section 13.2 hereof.

Section 5.7    Distributions to Reflect Additional Units. In the event that the
Partnership issues additional Units pursuant to the provisions of Article 4
hereof, subject to the rights of any Holder of any Partnership Interest set
forth in a Unit Designation, the Managing General Partner is hereby authorized
to make such revisions to this Article 5 and to Article 6 as it determines are
necessary or desirable to reflect the issuance of such additional Units,
including, without limitation, making preferential distributions to certain
classes of Units.

Section 5.8    Calculation of Distributions. In calculating all distributions
payable to any holders of Units, the Managing General Partner shall round the
amount per unit to the nearest whole cent ($0.01), with one-half cent rounded
upward.

Section 5.9    Restricted Distributions. Notwithstanding any provision to the
contrary contained in this Agreement, neither the Partnership nor the Managing
General Partner, on behalf of the Partnership, shall make a distribution to any
Holder if such distribution would violate the Act or other applicable law.

ARTICLE 6

ALLOCATIONS

Section 6.1    Timing and Amount of Allocations of Net Income and Net Loss. Net
Income and Net Loss of the Partnership shall be determined and allocated with
respect to each Partnership Year as of the end of each such year. Except as
otherwise provided in this Article 6, and subject to Section 11.6(c) and
Section 12.3(c) hereof, an allocation to a Holder of a share of Net Income or
Net Loss shall be treated as an allocation of the same share of each item of
income, gain, loss or deduction that is taken into account in computing Net
Income or Net Loss.

Section 6.2    General Allocations.

(a)    In General. Subject to Section 11.6(c) and Section 12.3(c) hereof, Net
Income and Net Loss shall be allocated to each of the Holders as follows:

(i)    Net Income will be allocated to Holders of Preferred Units in accordance
with and subject to the terms of the Unit Designation applicable to such
Preferred Units;

(ii)    remaining Net Income will be allocated to the Holders of Common Units in
accordance with their respective Percentage Interests at the end of each
Partnership Year;

(iii)    subject to the terms of any Unit Designation, Net Loss will be
allocated to the Holders of Common Units in accordance with their respective
Percentage Interests at the end of each Partnership Year; and

 

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(iv)    for purposes of this Section 6.2(a), the Percentage Interests of the
Holders of Common Units shall be determined using the numbers of Class A Units
and Class B Units outstanding as of the date of determination.

Section 6.3    Additional Allocation Provisions. Notwithstanding the foregoing
provisions of this Article 6:

(a)    Special Allocations Regarding Preferred Units. If any Preferred Units are
redeemed pursuant to Section 4.7(b) hereof (treating a full liquidation of the
Partnership Interest of any Special Partner for purposes of this Section 6.3(a)
as including a redemption of any then outstanding Preferred Units pursuant to
Section 4.7(b) hereof), for the Partnership Year that includes such redemption
(and, if necessary, for subsequent Partnership Years) (a) gross income and gain
(in such relative proportions as the Managing General Partner shall determine)
shall be allocated to the holder(s) of such Preferred Units to the extent that
the Redemption Amounts paid or payable with respect to the Preferred Units so
redeemed (or treated as redeemed) exceeds the aggregate Capital Account Balances
(net of liabilities assumed or taken subject to by the Partnership) per
Preferred Unit allocable to the Preferred Units so redeemed (or treated as
redeemed) and (b) deductions and losses (in such relative proportions as the
Managing General Partner shall determine) shall be allocated to the holder(s) of
such Preferred Units to the extent that the aggregate Capital Account Balances
(net of liabilities assumed or taken subject to by the Partnership) per
Preferred Unit allocable to the Preferred Units so redeemed (or treated as
redeemed) exceeds the Redemption Amount paid or payable with respect to the
Preferred Units so redeemed (or treated as redeemed).

(b)    Regulatory Allocations.

(i)    Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding the provisions of Section 6.2 hereof, or any
other provision of this Article 6, if there is a net decrease in Partnership
Minimum Gain during any Partnership Year, each Holder shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Holder’s share of the net decrease
in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Holder pursuant thereto. The
items to be allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3(b)(i) is intended to
qualify as a “minimum gain chargeback” within the meaning of Regulations
Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii)    Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4) or in Section 6.3(b)(i) hereof, if there is a
net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt
during any Partnership Year, each Holder who has a share of the Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with Regulations Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in an amount equal to such Holder’s respective share of the net decrease in
Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Holder pursuant thereto. The items to be so
allocated shall be determined in accordance with Regulations
Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3(b)(ii) is intended to
qualify as a “chargeback of partner nonrecourse debt minimum gain,” within the
meaning of Regulations Section 1.704-2(i), and shall be interpreted consistently
therewith.

(iii)    Nonrecourse Deductions and Partner Nonrecourse Deductions. Any
Nonrecourse Deductions for any Partnership Year shall be specially allocated to
the Holders in accordance with their respective Percentage Interests. Any
Partner Nonrecourse Deductions for any Partnership Year shall be specially
allocated to the Holder(s) who bears the economic risk of loss with respect to
the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable, in accordance with Regulations Section 1.704-2(i).

(iv)    Qualified Income Offset. If any Holder unexpectedly receives an
adjustment, allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or

 

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(6), items of Partnership income and gain shall be allocated, in accordance with
Regulations Section 1.704-1(b)(2)(ii)(d), to such Holder in an amount and manner
sufficient to eliminate, to the extent required by such Regulations, the
Adjusted Capital Account Deficit of such Holder as quickly as possible, provided
that an allocation pursuant to this Section 6.3(b)(iv) shall be made if and only
to the extent that such Holder would have an Adjusted Capital Account Deficit
after all other allocations provided in this Article 6 have been tentatively
made as if this Section 6.3(b)(iv) were not in the Agreement. It is intended
that this Section 6.3(b)(iv) qualify and be construed as a “qualified income
offset,” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(d), and
shall be interpreted consistently therewith.

(v)    Gross Income Allocation. If any Holder has a deficit Capital Account at
the end of any Partnership Year that is in excess of the sum of (1) the amount
(if any) that such Holder is obligated to restore to the Partnership upon
complete liquidation of such Holder’s Partnership Interest, and (2) the amount
that such Holder is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
each such Holder shall be specially allocated items of Partnership income and
gain in the amount of such excess to eliminate such deficit as quickly as
possible, provided that an allocation pursuant to this Section 6.3(b)(v) shall
be made if and only to the extent that such Holder would have a deficit Capital
Account in excess of such sum after all other allocations provided in this
Article 6 have been tentatively made as if this Section 6.3(b)(v) and
Section 6.3(b)(iv) hereof were not in the Agreement.

(vi)    Limitation on Allocation of Net Loss. To the extent that any allocation
of Net Loss (or items of loss or deduction) would cause or increase an Adjusted
Capital Account Deficit as to any Holder, such allocation of Net Loss (or items
of loss or deduction) shall be reallocated (x) first, among the other Holders of
Common Units in accordance with their respective Percentage Interests, and
(y) thereafter, among the Holders of other Units, as determined by the Managing
General Partner, subject to the limitations of this Section 6.3(b)(vi).

(vii)    Section 754 Adjustment. To the extent that an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or
Code Section 743(b) is required, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4),
to be taken into account in determining Capital Accounts as a result of a
distribution to a Holder of Units in complete liquidation of its interest in the
Partnership, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis), and such gain or loss shall be
specially allocated to (i) the Holders of Units in accordance with their
respective Percentage Interests in the event that Regulations
Section 1.704-1(b)(2)(iv)(m)(2) applies, in the same manner in which the
unrealized gain or loss that is displaced by such adjustment would have been
allocated if the property, the basis of which is adjusted, were sold immediately
prior to such adjustment for its recomputed tax basis or (ii) to the Holder(s)
to whom such distribution was made in the event that Regulations
Section 1.704-1(b)(2)(iv)(m)(4) applies.

(viii)    Curative Allocations. The allocations set forth in Sections 6.3(b)(i),
(ii), (iii), (iv), (v), (vi) and (vii) hereof (the “Regulatory Allocations”) are
intended to comply with certain regulatory requirements, including the
requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the
provisions of Section 6.1 hereof, the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss and deduction among the
Holders of Units so that, to the extent possible without violating the
requirements giving rise to the Regulatory Allocations, the net amount of such
allocations of other items and the Regulatory Allocations to each Holder of a
Unit shall be equal to the net amount that would have been allocated to each
such Holder if the Regulatory Allocations had not occurred.

(c)    Special Allocations to Effect the Tax Receivable Agreement. For U.S.
federal income tax purposes, all amounts described in clause (y) of the Tax
Receivable Agreement’s definition of Imputed Interest shall be treated as
obligations of the Partnership. Each person who receives any such amount shall
be treated as receiving a guaranteed payment (within the meaning of Code
Section 707(c)) from the Partnership, and the deduction for such amounts shall
be specially allocated to the Parent.

 

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(d)    Special Allocations Upon Liquidation. Notwithstanding any provision in
this Article 6 to the contrary, if the Partnership disposes of all or
substantially all of its assets in a transaction that will lead to a liquidation
of the Partnership pursuant to Article 13 hereof, then any Net Income or Net
Loss realized in connection with such transaction and thereafter (and, if
necessary, constituent items of income, gain, loss and deduction) shall be
specially allocated for such Partnership Year (and to the extent permitted by
the Code, for all preceding Partnership Years) among the Holders as required so
as to cause liquidating distributions pursuant to Section 13.2(a)(i) hereof to
be made in the same amounts and proportions as would have resulted had such
distributions instead been made pursuant to Article 5 hereof.

(e)    Allocation of Excess Nonrecourse Liabilities. For purposes of determining
a Holder’s proportional share of the “excess nonrecourse liabilities” of the
Partnership within the meaning of Regulations Section 1.752-3(a)(3), each
Holder’s respective interest in Partnership profits shall be equal to such
Holder’s Percentage Interest with respect to Common Units.

Section 6.4    Tax Allocations.

(a)    In General. Except as otherwise provided in this Section 6.4, for income
tax purposes under the Code and the Regulations, each Partnership item of
income, gain, loss and deduction (collectively, “Tax Items”) shall be allocated
among the Holders in the same manner as its correlative item of “book” income,
gain, loss or deduction is allocated pursuant to Sections 6.2 and 6.3 hereof.

(b)    Section 704(c) Allocations. Notwithstanding Section 6.4(a) hereof, Tax
Items with respect to Property that is contributed to the Partnership with a
Gross Asset Value that varies from its basis in the hands of the contributing
Partner immediately preceding the date of contribution shall be allocated among
the Holders for income tax purposes pursuant to Regulations promulgated under
Code Section 704(c) so as to take into account such variation. The Partnership
shall account for such variation under the traditional method, as described in
Regulations Section 1.704-3(b). If the Gross Asset Value of any Partnership
asset is adjusted pursuant to subsection (b) of the definition of “Gross Asset
Value,” subsequent allocations of Tax Items with respect to such asset shall
take account of the variation, if any, between the adjusted basis of such asset
and its Gross Asset Value in the same manner as under Code Section 704(c) and
the applicable Regulations and using the traditional method, as described in
Regulations Section 1.704-3(b).

ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1    Management.

(a)    Except as otherwise expressly provided in this Agreement, including
Section 7.3 hereof and any Unit Designation, all management powers over the
business and affairs of the Partnership are and shall be exclusively vested in
the Managing General Partner, and no other Partner shall have any right to
participate in or exercise control or management power over the business and
affairs of the Partnership. No Managing General Partner may be removed by the
Partners, with or without cause, except with the consent of the Managing General
Partner. The Managing General Partner, subject to the other provisions hereof,
including Section 7.3 and the terms of any Unit Designation, shall have full and
exclusive power and authority, without the consent of any other Partner, to
conduct or authorize the conduct of the business of the Partnership, to exercise
or direct the exercise of all powers of the Partnership under the Act and this
Agreement and to effectuate the purposes of the Partnership, including, without
limitation, to cause the Partnership to enter into agreements or engage in
transactions with affiliates of the Partnership or the Managing General Partner,
issue additional Partnership Interests, make distributions, sell, pledge, lease,
mortgage or otherwise dispose of its assets, form and conduct all or any portion
of its business and affairs through subsidiaries or joint ventures of any form,
incur or guarantee debt for any purpose and obtain and maintain casualty,
liability and other insurance on the Properties and liability insurance for the
Indemnitees hereunder. Subject to Section 7.3(d), the Managing General Partner
is authorized to cause or effect a merger, consolidation or conversion of the
Partnership, or a sale or transfer of all or substantially all its assets, in
accordance with Section 14.3.

(b)    Except as provided in Section 7.3 hereof and subject to the rights of any
Holder of any Partnership Interest set forth in a Unit Designation, the Managing
General Partner is authorized to execute and deliver any affidavit, agreement,
certificate, consent, instrument, notice, power of attorney, waiver or other
writing or

 

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document in the name and on behalf of the Partnership and to otherwise exercise
any power of the Managing General Partner under this Agreement and the Act
without any further act, approval or vote of the Partners or any other Persons
and, in the absence of any specific action on the part of the Managing General
Partner to the contrary, the taking of any action or the execution of any such
document or writing by a manager, member, director or officer of the Managing
General Partner, in the name and on behalf of the Managing General Partner, in
its capacity as a Managing General Partner of the Partnership, shall
conclusively evidence (1) the approval thereof by the Managing General Partner,
in its capacity as the Managing General Partner of the Partnership, (2) the
Managing General Partner’s determination that such action, document or writing
is necessary or desirable to conduct the business and affairs of the
Partnership, exercise the powers of the Partnership under the Act and this
Agreement or effectuate the purposes of the Partnership, or any other
determination by the Managing General Partner required by this Agreement in
connection with the taking of such action or execution of such document or
writing, and (3) the authority of such manager, member, director or officer of
the Managing General Partner with respect thereto.

(c)    The Managing General Partner may, from time to time as it deems
advisable, appoint officers of the Partnership and assign titles (including,
without limitation, Chief Executive Officer, President, Vice President,
Secretary and Treasurer) to any such person. The Managing General Partner may
delegate to such officers such power and authority as the Managing General
Partner deems advisable, including the power, acting individually or jointly, to
represent and bind the Partnership in all matters, in accordance with the scope
of their respective duties. Each officer shall hold office until his successor
is designated by the Managing General Partner or until his earlier death,
resignation or removal. Any officer may resign at any time upon written notice
to the Managing General Partner. Any officer may be removed by the Managing
General Partner with or without cause at any time. A vacancy in any office
occurring because of death, resignation, removal or otherwise, may, but need
not, be filled by the Managing General Partner.

(d)    The determination as to any of the following matters, made by or at the
direction of the Managing General Partner consistent with the Act and this
Agreement, shall be final and conclusive and shall be binding upon the
Partnership and every Partner: the amount of assets at any time available for
distribution or the redemption of Common Units or Preferred Units; the amount
and timing of any distribution; any determination to redeem Tendered Units; the
amount, purpose, time of creation, increase or decrease, alteration or
cancellation of any reserves or charges and the propriety thereof (whether or
not any obligation or liability for which such reserves or charges shall have
been created shall have been paid or discharged); the fair value, or any sale,
bid or asked price to be applied in determining the fair value, of any asset
owned or held by the Partnership; any matter relating to the acquisition,
holding and disposition of any assets by the Partnership; or any other matter
relating to the business and affairs of the Partnership or required or permitted
by applicable law, this Agreement or otherwise to be determined by the Managing
General Partner.

(e)    At all times from and after the date hereof, the Managing General Partner
may cause the Partnership to establish and maintain working capital and other
reserves in such amounts as the Managing General Partner, in its sole and
absolute discretion, deems appropriate and reasonable from time to time.

Section 7.2    Certificate of Limited Partnership. To the extent that such
action is determined by the Managing General Partner to be reasonable and
necessary or appropriate, the Managing General Partner shall file amendments to
and restatements of the Certificate of Limited Partnership and do all the things
to maintain the Partnership as a limited partnership under the laws of the State
of Delaware and each other state, the District of Columbia or any other
jurisdiction, in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5(a) hereof, the Managing General Partner
shall not be required, before or after filing, to deliver or mail a copy of the
Certificate of Limited Partnership or any amendment thereto to any Partner. The
Managing General Partner shall use all reasonable efforts to cause to be filed
such statements, certificates or documents as may be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership in the State of Delaware and any other state, or the
District of Columbia or other jurisdiction, in which the Partnership may elect
to do business or own property.

Section 7.3    Restrictions on the Managing General Partner’s Authority.

(a)    Before any Business Plan is presented to the Board of Directors for
formal review, management of the Partnership shall prepare the Business Plan and
submit it for review by the General Partners. If a Majority in Interest of the
General Partners approves such Business Plan, it shall be presented to the Board
of Directors. It is expressly acknowledged and agreed by each Partner that
nothing herein shall require the Parent to prepare, present to the Board of
Directors for a formal review or adopt a Business Plan for any period.

 

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(b)    The Managing General Partner may not take any action in contravention of
this Agreement, including, without limitation:

(i)    any action that would make it impossible to carry on the ordinary
business of the Partnership (including through its subsidiaries), except as
otherwise provided in this Agreement;

(ii)    admitting a Person as a Partner, except as otherwise provided in this
Agreement;

(iii)    performing any act that would subject a Limited Partner to liability,
except as provided herein or under the Act;

(iv)    entering into any contract, mortgage, loan or other agreement that
expressly prohibits or restricts (a) the Parent or the Partnership from
performing its specific obligations under Section 15.1 hereof, or (b) a Partner
from exercising its rights under Section 15.1 hereof to effect a Redemption,
except, in either case, with the written consent of such Partner affected by the
prohibition or restriction.

(c)    The Managing General Partner shall not, without the Consent of the
Limited Partners and Non-Managing General Partners, if there are any, undertake
on behalf of the Partnership, or enter into any transaction that would have the
effect of, any of the following actions:

(i)    except as provided in Section 7.3(e) hereof, amend, modify or terminate
this Agreement;

(ii)    except as otherwise permitted by this Agreement, including Section 11.2,
Section 12.1 and Section 14.3(b), or in connection with a Termination
Transaction effected in accordance with Section 11.7, voluntarily withdraw as a
general partner of the Partnership or admit into the Partnership any additional
or successor Managing General Partner;

(iii)    make a general assignment for the benefit of creditors or appoint or
acquiesce in the appointment of a custodian, receiver or trustee for all or any
part of the assets of the Partnership;

(iv)    institute any proceeding for bankruptcy on behalf of the Partnership;

(v)    effect a merger or consolidation of the Partnership with or into any
corporation, limited liability company, partnership or other Person, or a
conversion of the Partnership into a corporation, limited liability company or
any other type of entity, other than as permitted in Section 14.3(b); or

(vi)    effect a sale, lease, exchange or other transfer of all or substantially
all of the assets of the Partnership not in the ordinary course of business,
whether in a single transaction or a series of related transactions, other than
as permitted in Section 14.3(b); provided, however, that the foregoing will not
limit the ability of the Managing General Partner to authorize the Partnership
to mortgage, pledge, hypothecate or grant a security interest in all or
substantially all of the assets of the Partnership without the approval of any
Partner.

 

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(d)    The Managing General Partner shall not, without the approval of the
General Partners in accordance with Section 7.5(c), undertake on behalf of the
Partnership, or enter into any transaction that would have the effect of, any of
the following actions:

(i)    effect an acquisition or disposition of assets, whether in a single
transaction or a series of related transactions with the same counterparty or
group of counterparties acting in concert, for consideration in excess of the
Specified Threshold;

(ii)    incur indebtedness for borrowed money, whether in a single transaction
or a series of related transactions with the same group of lenders, in an
aggregate amount that exceeds the Specified Threshold;

(iii)    undertake to engage in a development project, other than Newhall Ranch,
Great Park Neighborhoods, Candlestick Point or San Francisco Shipyard, that
would reasonably be expected to involve a total investment by the Partnership in
excess of the Specified Threshold; or

(iv)    effect a merger or consolidation of the Partnership with or into any
corporation, limited liability company, partnership or other Person, or a
conversion of the Partnership into a corporation, limited liability company or
any other type of entity, other than as permitted in Section 14.3(b).

(e)    Notwithstanding Section 7.3(c) hereof but subject to the rights of any
Holder of any Partnership Interest set forth in a Unit Designation and
Section 7.3(f), the Managing General Partner shall have the power, without the
Consent of the Limited Partners and Non-Managing General Partners, to amend this
Agreement as may be required to facilitate or implement any of the following
purposes:

(i)    to add to the obligations of the Managing General Partner or surrender
any right or power granted to the Managing General Partner or any Affiliate of
the Managing General Partner for the benefit of the Partners;

(ii)    to reflect the admission, substitution or withdrawal of Partners, the
Transfer of any Partnership Interest or the termination of the Partnership in
accordance with this Agreement, and to amend the Register in connection with
such admission, substitution, withdrawal or Transfer;

(iii)    to reflect a change that is of an inconsequential nature or does not
adversely affect the Partners in any material respect, or to cure any ambiguity,
correct or supplement any provision in this Agreement not inconsistent with law
or with other provisions, or make other changes with respect to matters arising
under this Agreement that will not be inconsistent with law or with the
provisions of this Agreement;

(iv)    to satisfy any requirements, conditions or guidelines contained in any
order, directive, opinion, ruling or regulation of a Federal or state agency or
contained in Federal or state law;

(v)    to modify either or both of the manner in which items of Net Income or
Net Loss are allocated pursuant to Article 6 or the manner in which Capital
Accounts are adjusted, computed or maintained (but in each case only to the
extent set forth in the definition of “Capital Account” or Section 5.7 or as
contemplated by the Code or the Regulations);

(vi)    to reflect the issuance of additional Partnership Interests in
accordance with Article 4;

(vii)    to set forth or amend the designations, preferences, conversion or
other rights, voting powers, restrictions, limitations as to distributions,
qualifications or terms or conditions of redemption of any additional Units
issued pursuant to Article 4;

(viii)    if the Partnership is the Surviving Partnership in any Termination
Transaction, to modify Section 15.1 or any related definitions to provide the
holders of interests in such Surviving Partnership rights that are consistent
with Section 11.7(c)(v);

 

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(ix)    to modify Section 4.4 as the Managing General Partner, in its sole
discretion, deems necessary or desirable as a result of the Parent, the Managing
General Partner or the Partnership adopting, modifying or terminating any share
incentive plan for the benefit of employees, directors or other business
associates of the Parent, the Managing General Partner, the Partnership or any
of their Affiliate;

(x)    to reflect any other modification to this Agreement that is reasonably
necessary for the business or operations of the Partnership or the Parent and
that does not violate Section 7.3(f); and

(xi)    to implement the New Partnership Audit Procedures and make additional
changes that the Managing General Partner, in its reasonable discretion (taking
into account the interests of all of the Partners), deems necessary or desirable
as a result of the New Partnership Audit Procedures; provided that (A) the
Managing General Partner has consulted with the General Partners in accordance
with Section 10.2(b) and (B) the changes do not modify clauses (B) or (C) of the
proviso in Section 10.2(a). The Partners hereby acknowledge that any such
amendment may have a disproportionate impact on some Partners or an adverse
impact on some Partners but not other Partners.

(f)    Notwithstanding Sections 7.3(c), 7.3(e) and Article 14 hereof, this
Agreement shall not be amended, and no action may be taken by the Managing
General Partner, without the consent of each Partner, if any, adversely affected
thereby, if such amendment or action would (i) modify the limited liability of a
Limited Partner, (ii) adversely alter the rights of any Partner to receive the
distributions to which such Partner is entitled pursuant to Article 5 or
Section 13.2(a)(i) hereof, or alter the allocations specified in Article 6
hereof (except, in any case, as permitted pursuant to Sections 4.2, 5.7 and
7.3(e) hereof), (iii) alter or modify in a manner that adversely affects any
Partner the Redemption rights, Cash Amount or Class A Common Shares Amount as
set forth in Section 15.1 hereof, or amend or modify any related definitions
(except for amendments to this Agreement or other actions that provide rights
consistent with Section 11.7(c)), or (iv) amend this Section 7.3(f); provided,
however, that the consent of any individual Partner adversely affected shall not
be required for any amendment or action that affects all Partners holding the
same class or series of Units on a uniform or pro rata basis, if approved by
Partners holding a majority of the outstanding Units of such class or series.
Further, no amendment may alter the restrictions on the Managing General
Partner’s authority set forth elsewhere in this Section 7.3 without the consent
specified therein. Any such amendment or action consented to by any Partner
shall be effective as to that Partner, notwithstanding the absence of such
consent by any other Partner.

(g)    This Agreement shall not be amended, and no action may be taken by the
Managing General Partner, to cause any Non-Managing General Partner to cease to
be a General Partner without the consent of such Non-Managing General Partner,
unless the Non-Managing General Partner experiences an Event of Withdrawal.

Section 7.4    Reimbursement of the Managing General Partner and the Parent.

(a)    The Managing General Partner shall not be compensated for its services as
manager of the Partnership except as provided in this Agreement (including the
provisions of Articles 5 and 6 hereof regarding distributions, payments and
allocations to which it may be entitled in its capacity as the Managing General
Partner).

(b)    Subject to Section 7.4(c) and Section 15.13, the Partnership shall be
liable for, and shall reimburse the Managing General Partner and the Parent on a
monthly basis, or such other basis as the Managing General Partner may
determine, for all sums expended in connection with the Partnership’s business,
including, without limitation, (i) expenses relating to the ownership of
interests in and management and operation of, or for the benefit of, the
Partnership, (ii) compensation of officers and employees, including, without
limitation, payments under future compensation plans of the Parent, the Managing
General Partner or the Partnership that may provide for share units, or phantom
shares, pursuant to which employees of the Parent, the Managing General Partner
or the Partnership will receive payments based upon dividends on or the value of
Class A Common Shares, (iii) director fees and expenses, (iv) all costs and
expenses associated with any action, suit, proceeding, claim, dispute,
arbitration, inquiry, examination, inspection or investigation pending by or
before any governmental entity, arbitrator, mediator, agency, court, tribunal or
other jurisdictional body, foreign or domestic, and (v) all costs and expenses
of the Parent being a public company, including costs of filings with the SEC,
public reporting obligations, proxy statements and shareholder meetings, stock
exchange fees, transfer agent fees, SEC and FINRA filing fees and offering
expenses; provided, however, that the

 

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amount of any reimbursement shall be reduced by any interest earned by the
Parent or the Managing General Partner with respect to bank accounts or other
instruments or accounts held by it on behalf of the Partnership as permitted
pursuant to Section 7.7. Such reimbursements shall be in addition to any
reimbursement of the Parent or the Managing General Partner as a result of
indemnification pursuant to Section 7.9 hereof.

(c)    To the extent practicable, Partnership expenses shall be billed directly
to and paid by the Partnership and, subject to Section 15.13 hereof,
reimbursements to the Parent, the Managing General Partner or any of their
respective Affiliates by the Partnership pursuant to this Section 7.4 shall be
treated as “guaranteed payments,” within the meaning of Code Section 707(c)
(unless otherwise required by the Code and the Regulations) and shall not be
treated as distributions hereunder.

Section 7.5    Meetings of the General Partners.

(a)    Each General Partner (other than the Managing General Partner) shall
designate an individual as its representative for purposes of this Section 7.5
and shall notify the Managing General Partner of such designation; provided,
however, that (i) if an employee of such General Partner or one of its
Affiliates is serving on the Board of Directors, such employee (or if more than
one employee is serving on the Board of Directors, one of such employees) shall
be the representative and (ii) if no employee of such General Partner or one of
its Affiliates is serving on the Board of Directors, such representative shall
be an individual that is reasonably acceptable to the Managing General Partner.

(b)    The General Partners shall meet to discuss and review the management of
the affairs of the Partnership, including any material developments or actions
since the last meeting and any reasonably anticipated material developments or
material plans or proposals. Such meetings shall be at such time or times, but
no less often than quarterly, and at such locations as the General Partners may
agree. Following any such meeting, the General Partners may make recommendations
to the Board of Directors, including with respect to any changes to the Business
Plan, upon the affirmative vote of a Majority in Interest of the General
Partners.

(c)    The Managing General Partner shall give prior written notice to the other
General Partners of any of the actions set forth in Section 7.3(d) and, if
requested by any other General Partner within three (3) days of such notice,
shall meet with the other General Partners to discuss and approve such action,
at such time and at such location as the General Partners may agree. Any
approval shall be by the affirmative vote of a Majority in Interest of the
General Partners. If a meeting is not requested by any of the General Partners
within the specified time frame, such action shall be deemed approved by the
General Partners.

(d)    The General Partners may participate in a meeting of the General Partners
by means of a conference telephone or other communications equipment by means of
which all Persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this Section 7.5(d) shall constitute
presence in person at such meeting.

Section 7.6    Duties and Obligations of the Non-Managing General Partners.

(a)    Except as otherwise expressly provided in this Agreement or required by
the Act, (i) the duties and obligations owed to the Partnership by a
Non-Managing General Partner shall be the duty of care and the duty of loyalty
owed to a corporation organized under the DGCL by its directors, and (ii) the
duty of care and the duty of loyalty owed to the Partners by a Non-Managing
General Partner shall be the same as the duty of care and the duty of loyalty
owed to the stockholders of a corporation under the DGCL by its directors.

(b)    From time to time, at the request of the Managing General Partner, each
Non-Managing General Partner shall execute and deliver to the Managing General
Partner such agreements with the Partnership relating to confidentiality or
other matters as the Managing General Partner may reasonably request.

Section 7.7    Outside Activities of the Managing General Partner and the
Parent. The Parent and the Managing General Partner shall cause the Managing
General Partner to be a Qualifying Parent Entity. Neither the Parent nor the
Managing General Partner shall directly or indirectly enter into or conduct any
business, other than in connection with, (a) the ownership, acquisition and
disposition of Partnership Interests, (b) the management of the business of the
Partnership and its Subsidiaries, (c) the Parent’s operation as a reporting
company with a class (or classes) of securities registered under the Exchange
Act, (d) the offering, sale, syndication, private placement or public

 

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offering of shares, bonds, securities or other interests, (e) financing or
refinancing of any type related to the Partnership or its assets or activities,
and (f) such activities as are incidental thereto; provided, however, that each
of the Parent and the Managing General Partner may from time to time hold or
acquire assets in its own name or otherwise other than through the Partnership
so long as each of the Parent and the Managing General Partner takes
commercially reasonable measures to insure that the economic benefits and
burdens of such Property are otherwise vested in the Partnership, whether
through assignment, mortgage loan or otherwise or, if it is not commercially
reasonable to vest such economic interests in the Partnership, the Partners
shall negotiate in good faith to amend this Agreement, including, without
limitation, the definition of “Adjustment Factor,” to reflect such activities
and the direct ownership of assets by the Parent or the Managing General
Partner, as applicable. Nothing contained herein shall be deemed to prohibit the
Parent or the Managing General Partner from executing guarantees of Partnership
debt. Subject to Section 7.3(c) hereof, the Parent, the Managing General Partner
and their respective wholly owned Subsidiaries shall not own any assets or take
title to assets (other than temporarily in connection with an acquisition prior
to contributing such assets to the Partnership) other than (i) interests in
wholly owned Subsidiaries, (ii) Partnership Interests, and (iii) such cash and
cash equivalents, bank accounts or similar instruments or accounts as such group
deems reasonably necessary, taking into account Section 7.1(e) hereof and for
the Parent and the Managing General Partner to carry out their respective
responsibilities contemplated under this Agreement and the Parent LLC Agreement.
The Parent, the Managing General Partner and any of their Affiliates may acquire
Partnership Interests and shall be entitled to exercise all rights of a Partner
relating to such Partnership Interests.

Section 7.8    Transactions with Affiliates.

(a)    The Partnership may lend or contribute funds or other assets to the
Parent and its Subsidiaries (including the Managing General Partner and any
other Special Partner) or other Persons in which the Parent has an equity
investment, and such Persons may borrow funds from the Partnership, on terms and
conditions no less favorable to the Partnership in the aggregate than would be
available from unaffiliated third parties, as determined by the Managing General
Partner. The foregoing authority shall not create any right or benefit in favor
of any Subsidiary or any other Person. It is expressly acknowledged and agreed
by each Partner that the Parent may (i) borrow funds from the Partnership in
order to redeem, at any time or from time to time, options or warrants
previously or hereafter issued by the Parent, (ii) put to the Partnership, for
cash, any rights, options, warrants or convertible or exchangeable securities
that the Parent may desire or be required to purchase or redeem, or (iii) borrow
funds from the Partnership to acquire assets that will be contributed to the
Partnership for Units.

(b)    Except as provided in Section 7.7 hereof and subject to Section 3.1
hereof, the Partnership may transfer assets to joint ventures, limited liability
companies, partnerships, corporations, business trusts or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions consistent with this Agreement and applicable law.

(c)    The Parent, the Managing General Partner and their respective Affiliates
may sell, transfer or convey any property to the Partnership, directly or
indirectly, on terms and conditions no less favorable to the Partnership, in the
aggregate, than would be available from unaffiliated third parties, as
determined by the Managing General Partner.

(d)    The Parent or the Managing General Partner, without the approval of the
Partners or any of them or any other Persons, may propose and adopt, on behalf
of the Partnership, employee benefit plans funded by the Partnership for the
benefit of employees of the Managing General Partner, the Partnership,
Subsidiaries of the Partnership or any Affiliate of any of them in respect of
services performed, directly or indirectly, for the benefit of the Parent, the
Managing General Partner, the Partnership or any of the Partnership’s
Subsidiaries.

(e)    The Managing General Partner shall not be excluded or recused from any
vote or decision by the General Partners with respect to an interested
transaction, including a transaction involving the Parent, the Managing General
Partner or any of their respective Affiliates.

Section 7.9    Indemnification.

(a)    To the fullest extent permitted by applicable law, the Partnership shall
indemnify each Indemnitee from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
attorney’s fees and other legal fees and expenses), judgments, fines,
settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative,

 

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that relate to the operations of the Partnership (“Actions”), as set forth in
this Agreement, in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the Partnership shall
not indemnify (i) a General Partner, other than the Managing General Partner,
for any Action if it is established by a final judgment of a court of competent
jurisdiction that the General Partner breached its duty of loyalty to the
Partnership or the Partners, or did not act in good faith or engaged in
intentional misconduct or a knowing violation of law, or (ii) an Indemnitee for
an Action initiated by the Indemnitee (other than an Action to enforce such
Indemnitee’s rights to indemnification or advance of expenses under this
Section 7.9). Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to), and the Managing General
Partner is hereby authorized and empowered, on behalf of the Partnership, to
enter into one or more indemnity agreements consistent with the provisions of
this Section 7.9 in favor of any Indemnitee having or potentially having
liability for any such indebtedness. It is the intention of this Section 7.9(a)
that, except as specifically provided in this Section 7.9, the Partnership shall
indemnify each Indemnitee to the fullest extent permitted by law. The
termination of any proceeding by judgment, order or settlement does not create a
presumption that the Indemnitee did not meet the requisite standard of conduct
set forth in this Section 7.9(a). The termination of any proceeding by
conviction of an Indemnitee or upon a plea of nolo contendere or its equivalent
by an Indemnitee, or an entry of an order of probation against an Indemnitee
prior to judgment, does not create a presumption that such Indemnitee acted in a
manner contrary to that specified in this Section 7.9(a) with respect to the
subject matter of such proceeding. Any indemnification pursuant to this
Section 7.9 shall be made only out of the assets of the Partnership, and neither
the Managing General Partner nor any other Holder shall have any obligation to
contribute to the capital of the Partnership or otherwise provide funds to
enable the Partnership to fund its obligations under this Section 7.9.

(b)    To the fullest extent permitted by law, expenses incurred by an
Indemnitee who is a party to a proceeding or otherwise subject to or the focus
of or is involved in any Action shall be paid or reimbursed by the Partnership
as incurred by the Indemnitee in advance of the final disposition of the Action
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee
of the Indemnitee’s good faith belief that the standard of conduct necessary for
indemnification by the Partnership, as authorized in Section 7.9(a), has been
met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount if it shall ultimately be determined that the standard of conduct has
not been met, provided that such undertaking need not be secured and shall be
without reference to the financial ability for repayment.

(c)    The indemnification provided by this Section 7.9 shall be in addition to
any other rights to which an Indemnitee or any other Person may be entitled
under any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitee unless otherwise provided in a written
agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.

(d)    The Partnership may, but shall not be obligated to, purchase and maintain
insurance, on behalf of any of the Indemnitees and such other Persons as the
Managing General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership’s activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.

(e)    Any liabilities which an Indemnitee incurs as a result of acting on
behalf of the Partnership, the Managing General Partner or the Parent (whether
as a fiduciary or otherwise) in connection with the operation, administration or
maintenance of an employee benefit plan or any related trust or funding
mechanism (whether such liabilities are in the form of excise taxes assessed by
the IRS, penalties assessed by the Department of Labor, restitutions to such a
plan or trust or other funding mechanism or to a participant or beneficiary of
such plan, trust or other funding mechanism, or otherwise) shall be treated as
liabilities or judgments or fines under this Section 7.9

(f)    In no event may an Indemnitee subject any of the Holders to personal
liability by reason of the indemnification provisions set forth in this
Agreement.

(g)    An Indemnitee shall not be denied indemnification in whole or in part
under this Section 7.9 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.

 

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(h)    The provisions of this Section 7.9 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.9 or any provision hereof
shall be prospective only and shall not in any way affect the Partnership’s
liability to any Indemnitee under this Section 7.9 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.

(i)    It is the intent of the parties that any amounts paid by the Partnership
to the Managing General Partner or any Special Partner pursuant to this
Section 7.9 shall be treated as “guaranteed payments,” within the meaning of
Code Section 707(c).

Section 7.10    Liability of the Managing General Partner.

(a)    To the maximum extent permitted under the Act, the only duties that the
Managing General Partner owes to the Partnership, any Partner or any other
Person (including any creditor of any Partner or assignee of any Partnership
Interest) are to perform its contractual obligations as expressly set forth in
this Agreement. The Managing General Partner, in its capacity as such, shall
have no other duty, fiduciary or otherwise, to the Partnership, any Partner or
any other Person (including any creditor of any Partner or any assignee of a
Partnership Interest). The provisions of this Agreement shall create contractual
obligations of the Managing General Partner only, and no such provisions shall
be interpreted to create any fiduciary duties of the Managing General Partner.

(b)    The Partners agree that: (i) the Managing General Partner is acting for
the benefit of the Partnership, the Partners, the Parent and the Parent’s
shareholders, collectively; and (ii) in the event of a conflict between the
interests of the Partnership or any Partner, on the one hand, and the separate
interests of the Parent or its shareholders, on the other hand, the Managing
General Partner may give priority to the separate interests of the Parent and
its shareholders (including, without limitation, with respect to the tax
consequences to Partners, Assignees or the Parent’s shareholders) and, in the
event of such a conflict, the Managing General Partner may give priority to the
separate interests of the Parent or its shareholders if such action or failure
to act does not result in a violation of the contract rights of the Partners
under this Agreement.

(c)    In exercising its authority under this Agreement, the Managing General
Partner may, but shall be under no obligation to, take into account the tax
consequences to any Partner of any action taken (or not taken) by it. Except as
otherwise agreed by the Partnership, the Managing General Partner and the
Partnership shall not have liability to a Partner under any circumstances as a
result of any income tax liability incurred by such Partner as a result of an
action (or inaction) by the Managing General Partner or the Partnership pursuant
to the Managing General Partner’s authority under this Agreement.

(d)    Subject to its obligations and duties as Managing General Partner set
forth in this Agreement and applicable law, the Managing General Partner may
exercise any of the powers granted to it by this Agreement and perform any of
the duties imposed upon it hereunder either directly or by or through its
employees or agents. The Managing General Partner shall not be responsible to
the Partnership or any Partner for any misconduct or negligence on the part of
any such employee or agent appointed by it in good faith.

(e)    In performing its duties under this Agreement and the Act, the Managing
General Partner shall be entitled to rely on the provisions of this Agreement
and on any information, opinion, report or statement, including any financial
statement or other financial data or the records or books of account of the
Partnership or any subsidiary of the Partnership, prepared or presented by an
officer, employee or agent of the Managing General Partner or the Partnership or
any such subsidiary, or by a lawyer, certified public accountant, appraiser or
other person engaged by the Partnership as to any matter within such person’s
professional or expert competence, and any act taken or omitted to be taken in
reliance upon any such information, opinion, report or statement as to matters
that the Managing General Partner reasonably believes to be within such Person’s
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion. The Managing
General Partner shall be entitled to rely on the advice of legal counsel,
independent public accountants and other experts, including financial advisors,
and any act of or failure to act by the Managing General Partner in reliance on
such advice shall not subject the Managing General Partner to liability to the
Partnership or any Partner. The Managing General Partner may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.

 

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(f)    Notwithstanding anything herein to the contrary, except pursuant to any
express indemnities given to the Partnership by the Managing General Partner
pursuant to any other written instrument, the Managing General Partner shall not
have any personal liability whatsoever, to the Partnership or to the other
Partners, for any action or omission taken in its capacity as the Managing
General Partner or, to the fullest extent permitted by the Act, for the debts or
liabilities of the Partnership or the Partnership’s obligations hereunder.
Without limitation of the foregoing, and except pursuant to any such express
indemnity, no property or assets of the Managing General Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. The foregoing is not intended to limit any liability or
obligations of the Parent pursuant to Section 15.1.

(g)    No manager, member, director, officer, employee, agent or representative
of the Managing General Partner or the Parent, and no officer of the Partnership
(in their respective capacities as such), shall have any duties to the
Partnership or any Partner. No manager, member, director, officer, employee,
agent or representative of the Managing General Partner or the Parent, and no
officer of the Partnership, shall be liable to the Partnership or any Partner
for money damages by reason of their service as such.

(h)    Subject to Section 7.10(a), but notwithstanding any other provision of
this Agreement or otherwise applicable provision of law or equity, whenever in
this Agreement the Managing General Partner is permitted or required to make a
decision or take an action (a) in its “sole discretion” or “discretion” or under
a similar grant of authority or latitude, or without any express standard, in
making such decisions, the Managing General Partner shall be entitled to take
into account such interests and factors as it desires (including its own
interests) or (b) in “good faith” or under another expressed standard, the
Managing General Partner shall act under such standard and shall not be subject
to any other or different standards.

(i)    Any amendment, modification or repeal of this Section 7.10 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability of the Managing General Partner, or its managers,
members, directors, officers or agents, or officers of the Partnership, to the
Partnership and the Partners under this Section 7.10, as in effect immediately
prior to such amendment, modification or repeal, with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.

Section 7.11    Title to Partnership Assets. All Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be beneficially owned by the Partnership as an entity, and no Partner,
individually or collectively with other Partners or Persons, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the Managing General Partner or one or more nominees, as the Managing General
Partner may determine, including Affiliates of the Managing General Partner. The
Managing General Partner hereby declares and warrants that any Partnership
assets for which legal title is held in the name of the Managing General Partner
or any nominee or Affiliate of the Managing General Partner shall be held by the
Managing General Partner for the use and benefit of the Partnership in
accordance with the provisions of this Agreement. All Partnership assets shall
be recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.

Section 7.12    Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the Managing General Partner has full power and
authority, without the consent or approval of any other Partner, or Person, to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
take any and all actions on behalf of the Partnership, and such Person shall be
entitled to deal with the Managing General Partner as if it were the
Partnership’s sole party in interest, both legally and beneficially. Each
Partner hereby waives any and all defenses or other remedies that may be
available against such Person to contest, negate or disaffirm any action of the
Managing General Partner in connection with any such dealing. In no event shall
any Person dealing with the Managing General Partner or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expediency of any act or action of the
Managing General Partner or its representatives. Each and every certificate,
document or other instrument executed on behalf of the Partnership by the
Managing General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming in good faith
thereunder that (i) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (ii) the Person executing and delivering such

 

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certificate, document or instrument was duly authorized and empowered to do so
for and on behalf of the Partnership, and (iii) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.

ARTICLE 8

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.1    Limitation of Liability. No Limited Partner, in its capacity as
such, shall have any duties or liability under this Agreement except as
expressly provided in this Agreement (including, without limitation,
Section 10.4 and Section 15.1 hereof) or under the Act. To the maximum extent
permitted by law, no Limited Partner shall have any personal liability
whatsoever to the Partnership, the other Partners or any other Persons for any
action or omission taken in its capacity as a limited partner or for the debts
or liabilities of the Partnership or the Partnership’s obligations hereunder,
except pursuant to any express indemnities given to the Partnership by such
Limited Partner pursuant to any other written instrument, and except for
liabilities of the Parent pursuant to Section 15.1 hereof. Without limitation of
the foregoing, and except pursuant to any such express indemnity (and, in the
case of the Parent, pursuant to Section 15.1 hereof), no property or assets of a
Limited Partner, other than its interest in the Partnership, shall be subject to
levy, execution or other enforcement procedures for the satisfaction of any
judgment (or other judicial process) in favor of any other Partner(s) and
arising out of, or in connection with, this Agreement.

Section 8.2    Management of Business. No Limited Partner or Assignee (other
than in its separate capacity as the Managing General Partner, any of its
Affiliates or any officer, director, manager, member, employee, partner, agent,
representative or trustee of the Managing General Partner, the Partnership or
any of their Affiliates, in their capacity as such) shall take part in the
operations, management or control of the Partnership’s business, transact any
business in the Partnership’s name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by the
Managing General Partner, any of its Affiliates or any officer, director,
manager, member, employee, partner, agent, representative or trustee of the
Managing General Partner, the Partnership or any of their Affiliates, in their
capacity as such, shall not affect, impair or eliminate the limitations on the
liability of the Limited Partners or Assignees under this Agreement.

Section 8.3    Outside Activities of Limited Partners. Subject to any agreements
entered into pursuant to Section 7.8 hereof and any other agreements entered
into by a Limited Partner or any of its Affiliates, or by an Affiliate of a
Non-Managing General Partner that is not a Subsidiary of Parent (a “Non-Managing
GP Affiliate”), with the Managing General Partner, the Partnership or a
Subsidiary (including, without limitation, any employment agreement), any
Limited Partner or Non-Managing GP Affiliate and any Assignee, officer,
director, employee, agent, representative, trustee, Affiliate, manager, member
or shareholder of any Limited Partner or Non-Managing GP Affiliate shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership, including business interests and
activities that are in direct or indirect competition with the Partnership or
that are enhanced by the activities of the Partnership. Neither the Partnership
nor any Partner shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee or Non-Managing GP
Affiliate. Subject to such agreements, none of the Partners nor any other Person
shall have any rights by virtue of this Agreement in any business ventures of
any other Person (other than the Parent to the extent expressly provided
herein), and such Person shall have no obligation pursuant to this Agreement,
subject to Section 7.8 hereof and any other agreements entered into by a Limited
Partner or its Affiliates or a Non-Managing GP Affiliate with the Managing
General Partner, the Partnership or a Subsidiary, to offer any interest in any
such business ventures to the Partnership, any Partner, or any such other
Person, even if such opportunity is of a character that, if presented to the
Partnership, any Partner or such other Person, could be taken by such Person.

Section 8.4    Return of Capital. Except pursuant to the rights of Redemption
set forth in Section 15.1 hereof or in any Unit Designation, no Limited Partner
shall be entitled to the withdrawal or return of its Capital Contribution,
except to the extent of distributions made pursuant to this Agreement or upon
dissolution of the Partnership as provided herein. Except to the extent provided
in Article 5 or Article 6 hereof or otherwise expressly provided in this
Agreement or in any Unit Designation, no Limited Partner or Assignee shall have
priority over any other Limited Partner or Assignee either as to the return of
Capital Contributions or as to profits, losses or distributions.

 

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Section 8.5    Rights of Limited Partners Relating to the Partnership.

(a)    In addition to other rights provided by this Agreement or by the Act, and
subject to Section 8.5(c), the Managing General Partner shall deliver to each
Limited Partner a copy of any information mailed to all of the common
shareholders of the Parent as soon as practicable after such mailing.

(b)    The Partnership shall notify any Limited Partner that is a Qualifying
Party, on request, of the then current Adjustment Factor or any change made to
the Adjustment Factor.

(c)    Notwithstanding any other provision of this Section 8.5, the Managing
General Partner may keep confidential from the Limited Partners, or from all the
Partners (or any of them), for such period of time as the Managing General
Partner determines to be reasonable, any information that (i) the Managing
General Partner believes to be in the nature of trade secrets or other
information the disclosure of which the Managing General Partner in good faith
believes is not in the best interests of the Partnership or the Parent or
(ii) the Partnership or the Managing General Partner is required by law or by
agreement to keep confidential.

Section 8.6    Partnership Right to Call Partnership Interests. Notwithstanding
any other provision of this Agreement, but subject to the rights of any Holder
of any Partnership Interest set forth in a Unit Designation, on and after the
date on which the aggregate Percentage Interests of the Partners (other than the
Special Partners) are less than one percent (1%), the Partnership shall have the
right, but not the obligation, from time to time and at any time to redeem any
and all outstanding Class A Units (other than Class A Units held by any Special
Partner) by treating any Partner as a Tendering Party who has delivered a Notice
of Redemption pursuant to Section 15.1 hereof for the amount of Class A Units to
be specified by the Managing General Partner by notice to such Partner that the
Partnership has elected to exercise its rights under this Section 8.6. Such
notice given by the Managing General Partner to a Partner pursuant to this
Section 8.6 shall be treated as if it were a Notice of Redemption delivered to
the Managing General Partner by such Partner. For purposes of this Section 8.6,
(a) any Partner (whether or not otherwise a Qualifying Party) may be treated as
a Qualifying Party that is a Tendering Party and (b) the provisions of
Sections 15.1(c)(i), 15.1(d)(i) and 15.1(d)(ii) hereof shall not apply, but the
remainder of Section 15.1 hereof shall apply, mutatis mutandis.

Section 8.7    Certificates Evidencing Units. The Managing General Partner may,
at any time, determine that ownership of any class of Units shall be evidenced
by a certificate in such form as the Managing General Partner adopts from time
to time, which certificate may be imprinted with a legend setting forth such
restrictions placed on the Units as specified in this Agreement and such
restrictions will be binding upon all holders of the certificate along with the
terms and conditions set forth in this Agreement. If the Managing General
Partner elects to issue certificates to evidence any class of Units, the
following provisions shall apply: (a) the certificate shall state that the
Partnership is a limited partnership formed under the laws of the State of
Delaware, the name of the Partner to whom such certificate is issued and that
the certificate represents a Partnership Interest, within the meaning of
Section 17-702(b) of the Act; (b) each certificate shall be signed by the
Managing General Partner of the Partnership by either manual or facsimile
signature; (c) the certificates shall be numbered and registered in the Register
as they are issued; (d) when certificates are presented to the Partnership with
a request to register a transfer, if the transfer is permitted by this
Agreement, the Partnership shall register the transfer or make the exchange on
the Register or transfer books of the Partnership; provided, that any
certificates presented or surrendered for registration of transfer or exchange
must be duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Partnership, duly executed by the holder thereof or his
attorney duly authorized in writing; (e) before due presentment for registration
of transfer of a certificate in compliance with and in accordance with this
Agreement, the Partnership shall be entitled to treat the individual or entity
in whose name any certificates issued by the Partnership stand on the books of
the Partnership as the absolute owner of the Units evidenced thereby, and shall
not be bound to recognize any equitable or other claim to, or interest in, such
Units on the part of any other individual or entity; (f) if any mutilated
certificate is surrendered to the Partnership, or the Partnership receives
evidence to its satisfaction of the destruction, loss or theft of any
certificate, the Partnership shall issue a replacement certificate if the
requirements of Section 8-405 of the Uniform Commercial Code are met. If
required by the Managing General Partner, an indemnity and/or the deposit of a
bond in such form and in such sum, and with such surety or sureties as the
Managing General Partner may direct, must be supplied by the holder of such
lost, destroyed or stolen certificate that is sufficient in the judgment of the
Managing General Partner to protect the Partnership from any loss that it may
suffer if a certificate is replaced. The Partnership may charge for its expenses
incurred in connection with replacing a certificate.

 

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ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.1    Records and Accounting.

(a)    The Managing General Partner shall keep or cause to be kept at the
principal business office of the Partnership those records and documents, if
any, required to be maintained by the Act and other books and records deemed by
the Managing General Partner to be appropriate with respect to the Partnership’s
business, including, without limitation, all books and records necessary to
provide to the Partners any information, lists and copies of documents required
to be provided pursuant to Section 17-305 of the Act or Section 8.5(a),
Section 9.3 or Article 13 hereof. Any records maintained by or on behalf of the
Partnership in the regular course of its business may be kept on any information
storage device, provided that the records so maintained are convertible into
clearly legible written form within a reasonable period of time.

(b)    The books of the Partnership shall be maintained, for financial and tax
reporting purposes, on an accrual basis in accordance with generally accepted
accounting principles, or on such other basis as the Managing General Partner
determines to be necessary or appropriate. To the extent permitted by sound
accounting practices and principles, the Partnership and the Managing General
Partner may operate with integrated or consolidated accounting records,
operations and principles.

Section 9.2    Partnership Year. The Partnership Year shall be the calendar
year.

Section 9.3    Reports.

(a)    As soon as practicable, but in no event later than 120 days after the
close of each Partnership Year, the Managing General Partner shall cause to be
mailed to each Partner of record as of the close of the Partnership Year,
financial statements of the Partnership, or of the Parent if such statements are
prepared solely on a consolidated basis with the Parent, for such Partnership
Year, presented in accordance with generally accepted accounting principles,
such statements to be audited by a nationally recognized firm of independent
public accountants selected by the Managing General Partner.

(b)    As soon as practicable, but in no event later than 90 days after the
close of each calendar quarter (except the last calendar quarter of each year),
the Managing General Partner shall cause to be mailed to each Partner of record
as of the last day of the calendar quarter, a report containing unaudited
financial statements of the Partnership, or of the Parent if such statements are
prepared solely on a consolidated basis with the Parent, for such calendar
quarter, and such other information as may be required by applicable law or
regulation or as the Managing General Partner determines to be appropriate.

(c)    The Managing General Partner may satisfy its obligations under
Section 9.3(a) and Section 9.3(b) by posting or making available the reports
specified in such sections on a website maintained by the Managing General
Partner or the Parent, or through the Parent’s filing of annual and quarterly
reports with the SEC.

(d)    The Managing General Partner will provide each Partner with any
additional financial information reasonably requested by such Partner in
connection with the preparation of financial statements or reports for the
Partner or its parent corporation.

ARTICLE 10

TAX MATTERS

Section 10.1    Preparation of Tax Returns. The Managing General Partner shall
arrange for the preparation and timely filing of all returns with respect to
Partnership income, gains, deductions, losses and other items required of the
Partnership for Federal and state income tax purposes and shall use all
reasonable effort to furnish, within ninety (90) days of the close of each
taxable year, the tax information reasonably required by Partners and for
Federal and state income tax and any other tax reporting purposes, including a
completed IRS Schedule K-1. The Partners shall promptly provide the Managing
General Partner with such information relating to the Contributed Properties,
including tax basis and other relevant information, and any other information
relevant to tax status or tax reporting of the Partnership or its Subsidiaries
as may be reasonably requested by the Managing General Partner from time to
time.

 

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Section 10.2    Tax Elections.

(a)    Except as otherwise provided herein, the Managing General Partner
(i) shall determine whether to make any available election pursuant to the Code,
including, but not limited to, the election under Code Section 754 for any
Partnership Year and (ii) shall have the right to seek to revoke any such
election; provided, however, that (A) no election under Code Section 754 shall
be made by the Partnership for any tax year ending on or before December 31,
2016, (B) no election shall be made to apply the New Partnership Audit
Procedures prior to the effective date of the New Partnership Audit Procedures
and (C) an election shall be made to not apply the New Partnership Audit
Procedures to the extent the Partnership is eligible to make such an election.

(b)    The Managing General Partner agrees to consult with the Non-Managing
General Partners prior to making any amendment to this Agreement pursuant to
Section 7.3(e)(xi).

Section 10.3    Tax Matters Partner.

(a)    The Managing General Partner shall be the “tax matters partner” and
“partnership representative” of the Partnership for federal income tax purposes
(collectively, the “Tax Matters Partner”). The Tax Matters Partner shall receive
no compensation for its services. All third-party costs and expenses incurred by
the Tax Matters Partner in performing its duties as such (including legal and
accounting fees and expenses) shall be borne by the Partnership in addition to
any reimbursement pursuant to Section 7.4 hereof. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm or other
qualified tax advisor to assist the Tax Matters Partner in discharging its
duties hereunder. At the request of any Partner, the Managing General Partner
agrees to inform such Partner regarding the preparation and filing of any
returns and with respect to any subsequent audit or litigation relating to such
returns; provided, however, that the Managing General Partner shall have the
exclusive power to determine whether to file, and the content of, such returns.

(b)    The Tax Matters Partner is authorized, but not required:

(i)    to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of Partnership items
required to be taken into account by the Partnership or a Partner for income tax
purposes (such administrative proceedings being referred to as a “tax audit” and
such judicial proceedings being referred to as “judicial review”), and in the
settlement agreement the Tax Matters Partner may expressly state that such
agreement shall bind all Partners, except that such settlement agreement shall
not bind any Partner (i) who (within the time prescribed pursuant to the Code
and Regulations) files a statement with the IRS providing that the Tax Matters
Partner shall not have the authority to enter into a settlement agreement on
behalf of such Partner (as the case may be) or (ii) who is a “notice partner”
(as defined in Code Section 6231) or a member of a “notice group” (as defined in
Code Section 6223(b)(2)), in each case to the extent permitted by law;

(ii)    in the event that a notice of a final administrative adjustment at the
Partnership level of any item required to be taken into account by the
Partnership or a Partner for tax purposes (a “final adjustment”) is mailed to
the Tax Matters Partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the United States Tax
Court or the United States Claims Court, or the filing of a complaint for refund
with the District Court of the United States for the district in which the
Partnership’s principal place of business is located;

(iii)    to intervene in any action brought by any other Partner for judicial
review of a final adjustment;

(iv)    to file a request for an administrative adjustment with the IRS at any
time and, if any part of such request is not allowed by the IRS, to file an
appropriate pleading (petition or complaint) for judicial review with respect to
such request;

(v)    to enter into an agreement with the IRS to extend the period for
assessing any tax that is attributable to any item required to be taken into
account by the Partnership or a Partner for tax purposes, or an item affected by
such item; and

 

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(vi)    to take any other action on behalf of the Partnership or the Partners or
any of them in connection with any tax audit or judicial review proceeding to
the extent permitted by applicable law or regulations.

The taking of any action and the incurring of any expense by the Tax Matters
Partner in connection with any such proceeding, except to the extent required by
law, is a matter in the sole and absolute discretion of the Tax Matters Partner
and the provisions relating to indemnification of the Managing General Partner
set forth in Section 7.9 hereof shall be fully applicable to the Tax Matters
Partner in its capacity as such.

Section 10.4    Withholding. Each Partner hereby authorizes the Partnership to
withhold from or pay on behalf of or with respect to such Partner any amount of
Federal, state, local or foreign taxes that the Managing General Partner
determines that the Partnership is required to withhold or pay with respect to
(a) any amount distributable or allocable to such Partner pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Code Section 1441, Code Section 1442, Code
Section 1445 or Code Section 1446 and (b) any “imputed underpayment” within the
meaning of the New Partnership Audit Procedures attributable to such Partner and
paid by the Partnership (or by any Subsidiary of the Partnership but only to the
extent such payment is allocated to the Partnership) as a result of an
adjustment with respect to any item of the Partnership or such Subsidiary,
including any interest or penalties with respect to any such adjustment
(collectively, an “Imputed Underpayment Amount”). Any Imputed Underpayment
Amount that the Managing General Partner cannot attribute to a Partner shall be
treated as an expense of the Partnership. Any amount described in the first
sentence of this Section 10.4 that is paid on behalf of or with respect to a
Partner shall constitute a loan by the Partnership to such Partner, which loan
shall be repaid by such Partner within fifteen (15) days after notice from the
Managing General Partner that such payment must be made unless (i) the
Partnership withholds such payment from a distribution that would otherwise be
made to the Partner or (ii) the Managing General Partner determines that such
payment may be satisfied out of the cash of the Partnership that would, but for
such payment, be distributed to the Partner. Each Partner hereby unconditionally
and irrevocably grants to the Partnership a security interest in such Partner’s
Partnership Interest to secure such Partner’s obligation to pay to the
Partnership any amounts required to be paid pursuant to this Section 10.4. In
the event that a Partner fails to pay any amounts owed to the Partnership
pursuant to this Section 10.4 when due, the Managing General Partner may elect
to make the payment to the Partnership on behalf of such defaulting Partner, and
in such event shall be deemed to have loaned such amount to such defaulting
Partner and shall succeed to all rights and remedies of the Partnership as
against such defaulting Partner (including, without limitation, the right to
receive distributions). Any amounts payable by a Partner hereunder shall bear
interest at the base rate on corporate loans at large United States money center
commercial banks, as published from time to time in the Wall Street Journal,
plus four (4) percentage points (but not higher than the maximum lawful rate)
from the date such amount is due (i.e., fifteen (15) days after demand) until
such amount is paid in full. Each Partner shall take such actions as the
Partnership or the Managing General Partner shall request in order to perfect or
enforce the security interest created hereunder.

Section 10.5    Organizational Expenses. The Managing General Partner may cause
the Partnership to elect to deduct expenses, if any, incurred by it in
organizing the Partnership ratably over a 180-month period as provided in Code
Section 709.

ARTICLE 11

PARTNER TRANSFERS AND WITHDRAWALS

Section 11.1    Transfer.

(a)    No part of the interest of a Partner shall be subject to the claims of
any creditor, to any spouse for alimony or support, or to legal process, and may
not be voluntarily or involuntarily alienated or encumbered except as may be
specifically provided for in this Agreement.

(b)    No Partnership Interest shall be Transferred, in whole or in part, except
in accordance with the terms and conditions set forth in this Article 11. Any
Transfer or purported Transfer of a Partnership Interest not made in accordance
with this Article 11 shall be null and void ab initio.

(c)    No Transfer of any Partnership Interest may be made to a lender to the
Partnership or any Person who is related (within the meaning of Regulations
Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a
Nonrecourse Liability, without the consent of the Managing General Partner;
provided that as a

 

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condition to such consent, the lender will be required to enter into an
arrangement with the Partnership and the Managing General Partner to redeem or
exchange for the Class A Common Shares Amount any Units in which a security
interest is held by such lender simultaneously with the time at which such
lender would be deemed to be a member in the Partnership for purposes of
allocating liabilities to such lender under Code Section 752.

Section 11.2    Transfer by Managing General Partner.

(a)    Except as provided in Section 11.2(b), and subject to the rights of any
Holder of any Partnership Interest set forth in a Partnership Unit Designation,
the Managing General Partner may not Transfer all or any portion of its
Partnership Interest without the Consent of the Partners.

(b)    Subject to compliance with the other provisions of this Article 11, the
Managing General Partner may Transfer all or any portion of its Partnership
Interest at any time to a Special Partner or any Person that is, at the time of
such Transfer, a direct or indirect wholly owned Subsidiary of the Managing
General Partner, without the Consent of any Partner, and, if the transferee is a
Qualifying Parent Entity, may designate the transferee to become the new
Managing General Partner under Section 12.1.

(c)    The Managing General Partner may not voluntarily withdraw as a general
partner of the Partnership without the Consent of the Limited Partners and
Non-Managing General Partners, except in connection with a Transfer of the
Managing General Partner’s entire Partnership Interest permitted in this
Article 11 and the admission of the transferee as a successor Managing General
Partner of the Partnership pursuant to the Act and this Agreement.

(d)    It is a condition to any Transfer of the entire Partnership Interest of a
Managing General Partner otherwise permitted hereunder that, coincident or prior
to such Transfer, (i) the transferee assumes by operation of law or express
agreement all of the obligations of the transferor Managing General Partner
under this Agreement with respect to such Transferred Partnership Interest;
(ii) the transferee has executed such instruments as may be necessary to
effectuate the admission of the transferee as a Managing General Partner, and to
confirm the agreement of such transferee to be bound by all the terms and
provisions of this Agreement applicable to a Managing General Partner; and
(iii) the transferee is a Qualifying Parent Entity.

Section 11.3    Transfers by Limited Partners and Non-Managing General Partners.

(a)    General. Prior to the end of the Twelve-Month Period applicable to any
Partnership Interest and except as provided below and in Section 11.1(c) hereof,
no Limited Partner or Non-Managing General Partner shall Transfer all or any
portion of such Partnership Interest to any transferee (other than a Permitted
Transferee) without the consent of the Managing General Partner. After the
expiration of the Twelve-Month Period applicable to any Partnership Interest,
and subject to Section 11.3(d) hereof, each Limited Partner, each Non-Managing
General Partner, and each transferee of its Partnership Interest or Assignee
pursuant to a Permitted Transfer, shall have the right to Transfer all or any
portion of such Partnership Interest to any Person. Notwithstanding the
foregoing, any Limited Partner or Non-Managing General Partner may, at any time,
without the consent of the Managing General Partner, Transfer all or any portion
of its Partnership Interest pursuant to a Permitted Transfer (including, in the
case of a Partner that is a Permitted Lender Transferee, any Transfer of a
Partnership Interest to a Third-Party Pledge Transferee). Any Transfer of a
Partnership Interest by a Limited Partner, a Non-Managing General Partner or an
Assignee is subject to Section 11.4 and to satisfaction of the following
conditions:

(i)    Parent Right of First Refusal. The transferring Partner (or the Partner’s
estate in the event of the Partner’s death) shall give written notice of the
proposed Transfer to the Managing General Partner and the Parent, which notice
shall state (i) the identity and address of the proposed transferee and (ii) the
amount and type of consideration proposed to be received for the Transferred
Units. The Parent shall have ten (10) Business Days upon which to give the
Transferring Partner notice of its election to acquire the Units on the terms
set forth in such notice (or, if the terms provide for non-cash consideration,
for cash equal to the Value, or if other than Class A Shares, the fair market
value, as determined in good faith by the Parent, of such non-cash
consideration). If it so elects, the Parent shall purchase the Units on such
terms within ten (10) Business Days after giving notice of such election;
provided, however, that in the event that the proposed terms involve a purchase
for cash (including cash in lieu of non-cash consideration), the Parent may at
its election deliver in lieu of all or any portion of such cash a note from the
Parent payable to the Transferring

 

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Partner at a date as soon as reasonably practicable, but in no event later than
one hundred eighty (180) days after such purchase, and bearing interest at an
annual rate equal to the Applicable Federal Short-Term Rate, as published
monthly by the IRS, as of the closing of such purchase; provided, further, that
such closing may be deferred to the extent necessary to effect compliance with
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, if applicable, and any
other applicable requirements of law. If the Parent does not elect to acquire
the Units, the Transferring Partner may Transfer such Units to a third party, on
terms no more favorable to the transferee than the originally proposed terms,
subject to the other conditions of this Section 11.3.

(ii)    Qualified Transferee. Any Transfer of a Partnership Interest shall be
made only to a single Qualified Transferee; provided, however, that, for such
purposes, all Qualified Transferees that are Affiliates, or that comprise
investment accounts or funds managed by a single Qualified Transferee and its
Affiliates, shall be considered together to be a single Qualified Transferee;
provided, further, that each Transfer meeting the minimum Transfer restriction
of Section 11.3(a)(iv) hereof may be to a separate Qualified Transferee.

(iii)    Opinion of Counsel. The Transferor shall deliver or cause to be
delivered to the Managing General Partner an opinion of counsel reasonably
satisfactory to it to the effect that the proposed Transfer may be effected
without registration under the Securities Act and will not otherwise violate the
registration provisions of the Securities Act and the regulations promulgated
thereunder or violate any state securities laws or regulations applicable to the
Partnership or the Partnership Interests Transferred; provided, however, that
the Managing General Partner may waive this condition upon the request of the
Transferor. If, in the opinion of such counsel, a Transfer would require the
filing of a registration statement under the Securities Act or would otherwise
violate any Federal or state securities laws or regulations applicable to the
Partnership or the Units, the Managing General Partner may prohibit such
Transfer of Partnership Interests even if it is otherwise permitted under this
Section 11.3.

(iv)    Minimum Transfer Restriction. A Transferring Partner may not Transfer
less than all of the Units then owned by such Transferring Partner without the
consent of the Managing General Partner, which may be withheld in its sole
discretion; provided, however, that, for purposes of determining compliance with
the foregoing restriction, all Units owned by Affiliates of a Partner shall be
considered to be owned by such Partner.

(v)    No Further Transfers. The transferee shall not be permitted to effect any
further Transfer of the Units, other than to the Parent or the Partnership.

(vi)    Exception for Permitted Transfers. The conditions of Section 11.3(a)
hereof shall not apply in the case of a Permitted Transfer to a Qualified
Transferee, or a Transfer to the Partnership or the Parent.

It is a condition to any Transfer otherwise permitted hereunder (whether or not
such Transfer is effected during or after the applicable Twelve-Month Period)
that the transferee assumes by operation of law or express agreement all of the
obligations of the transferor Partner under this Agreement with respect to such
Transferred Partnership Interest, and no such Transfer (other than pursuant to a
statutory merger or consolidation wherein all obligations and liabilities of the
transferor Partner are assumed by a successor corporation by operation of law)
shall relieve the transferor Partner of its obligations under this Agreement
without the approval of the Managing General Partner. Any transferee, whether or
not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substituted
Limited Partner, no transferee, whether by a voluntary Transfer, by operation of
law or otherwise, shall have any rights hereunder, other than the rights of an
Assignee as provided in Section 11.5 hereof.

(b)    Incapacity. If a Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such
Partner’s estate shall have all the rights of a Limited Partner, but not more
rights than those enjoyed by other Limited Partners, for the purpose of settling
or managing the estate, and such power as the Incapacitated Partner possessed to
Transfer all or any part of its Partnership Interest. The Incapacity of a
Partner, in and of itself, shall not dissolve or terminate the Partnership.

 

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(c)    Adverse Tax Consequences. No Transfer by a Partner of its Partnership
Interests (including any Redemption, any other acquisition of Units by the
Parent or the Partnership and including any Permitted Transfer) may be made to
or by any Person if in the opinion of legal counsel or other qualified tax
advisor for the Partnership, such Transfer would create a material risk of the
Partnership being treated as an association taxable as a corporation or would
result in a termination of the Partnership under Code Section 708.

(d)    Management Units. No Management Partner shall Transfer all or any portion
of its Management Units to any transferee (other than a Permitted Transferee)
without the consent of the Managing General Partner.

Section 11.4    Substituted Limited Partners.

(a)    No Limited Partner or Non-Managing General Partner shall have the right
to substitute a transferee, other than a Permitted Transferee, as a Limited
Partner in its place. A transferee of the interest of a Limited Partner or
Non-Managing General Partner may be admitted as a Substituted Limited Partner
only with the consent of the Managing General Partner; provided, however, that a
Permitted Transferee may be admitted as a Substituted Limited Partner pursuant
to a Permitted Transfer without the consent of the Managing General Partner. The
failure or refusal by the Managing General Partner to permit a transferee of any
such interests to become a Substituted Limited Partner shall not give rise to
any cause of action against the Partnership or the Managing General Partner.
Subject to the foregoing, an Assignee shall not be admitted as a Substituted
Limited Partner unless and until it furnishes to the Managing General Partner
(i) evidence of acceptance, in form and substance satisfactory to the Managing
General Partner, of all the terms, conditions and applicable obligations of this
Agreement (which may be a counterpart signature page to this Agreement executed
by such Assignee), and (ii) such other documents and instruments as the Managing
General Partner may require to effect such Assignee’s admission as a Substituted
Limited Partner.

(b)    Concurrently with, and as evidence of, the admission of a Substituted
Limited Partner, the Managing General Partner shall amend the Register and the
books and records of the Partnership to reflect the name, address, and number of
Units of such Substituted Limited Partner and to eliminate or adjust, if
necessary, the name, address and number of Units of the predecessor of such
Substituted Limited Partner.

(c)    A transferee who has been admitted as a Substituted Limited Partner in
accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.

Section 11.5    Assignees. If the Managing General Partner’s consent is required
for the admission of any transferee under Section 11.4 hereof as a Substituted
Limited Partner, as described in Section 11.4 hereof, and the Managing General
Partner withholds such consent, such transferee shall be considered an Assignee
for purposes of this Agreement. An Assignee shall be entitled to all the rights
of an assignee of a partnership interest under the Act, including the right to
receive distributions from the Partnership and the share of Net Income, Net
Losses and other items of income, gain, loss, deduction and credit of the
Partnership attributable to the Units assigned to such transferee, and the
rights to Transfer the Units provided in this Article 11, but shall not be
deemed to be a holder of Units for any other purpose under this Agreement (other
than as expressly provided in Section 15.1 hereof with respect to a Qualifying
Party that becomes a Tendering Party), and shall not be entitled to effect a
Consent or vote with respect to such Units on any matter presented to the
Partners or any subset of the Partners for approval (such right to Consent or
vote, to the extent provided in this Agreement or under the Act, fully remaining
with the transferor Partner). In the event that any such transferee desires to
make a further assignment of any such Units, such transferee shall be subject to
all the provisions of this Article 11 to the same extent and in the same manner
as any Limited Partner desiring to make an assignment of Units.

Section 11.6    General Provisions.

(a)    No Limited Partner may withdraw from the Partnership other than: (i) as a
result of a permitted Transfer of all of such Limited Partner’s Partnership
Interest in accordance with this Article 11 with respect to which the transferee
becomes a Substituted Limited Partner; (ii) pursuant to a redemption (or
acquisition by the Parent or the Partnership) of all of its Partnership Interest
pursuant to a Redemption under Section 15.1 hereof and/or pursuant to any Unit
Designation; or (iii) as a result of the acquisition by the Partnership, the
Parent or any other Special Partner of all of such Limited Partner’s Partnership
Interest, whether or not pursuant to Section 15.1(b) hereof.

 

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(b)    Any Limited Partner or Non-Managing General Partner who shall Transfer
all of its Units in a Transfer (i) permitted pursuant to this Article 11 where
such transferee was admitted as a Substituted Limited Partner, (ii) pursuant to
the exercise of its rights to effect a redemption of all of its Units pursuant
to a Redemption under Section 15.1 hereof and/or pursuant to any Unit
Designation, or (iii) to the Parent or any other Special Partner, whether or not
pursuant to Section 15.1(b) hereof, shall cease to be a Partner.

(c)    If any Unit is Transferred in compliance with the provisions of this
Article 11, or is redeemed by the Partnership, or acquired by the Parent
pursuant to Section 15.1 hereof, on any day other than the first day of a
Partnership Year, then Net Income, Net Losses, each item thereof and all other
items of income, gain, loss, deduction and credit attributable to such Unit for
such Partnership Year shall be allocated to the transferor Partner or the
Tendering Party (as the case may be) and, in the case of a Transfer or
assignment other than a Redemption, to the transferee Partner, by taking into
account their varying interests during the Partnership Year in accordance with
Code Section 706(d), using the “interim closing of the books” method or another
permissible method selected by the Managing General Partner. Solely for purposes
of making such allocations, each of such items for the calendar month in which a
Transfer occurs shall be allocated to the transferee Partner and none of such
items for the calendar month in which a Transfer or a Redemption occurs shall be
allocated to the transferor Partner, or the Tendering Party (as the case may be)
if such Transfer occurs on or before the fifteenth (15th) day of the month,
otherwise such items shall be allocated to the transferor. All distributions
attributable to such Unit with respect to which the Partnership Record Date is
before the date of such Transfer, assignment or Redemption shall be made to the
transferor Partner or the Tendering Party (as the case may be) and, in the case
of a Transfer other than a Redemption, all distributions thereafter attributable
to such Unit shall be made to the transferee Partner.

(d)    In addition to any other restrictions on Transfer herein contained, and
notwithstanding any provision to the contrary herein, in no event may any
Transfer or assignment of a Partnership Interest by any Partner (including any
Redemption, any acquisition of Units by the Parent or any other Special Partner,
or any other acquisition of Units by the Partnership) be made (i) to any person
or entity who lacks the legal right, power or capacity to own a Partnership
Interest; (ii) in violation of applicable law; (iii) of any component of a
Partnership Interest, such as the Capital Account, or rights to distributions,
separate and apart from all other components of a Partnership Interest; (iv) if
such Transfer would, in the opinion of counsel or other qualified tax advisor to
the Partnership or the Managing General Partner, cause a termination of the
Partnership for Federal or state income tax purposes (except as a result of the
Redemption (or acquisition by the Parent) of all Units held by all Limited
Partners and Non-Managing General Partners); (v) if such Transfer would, in the
opinion of legal counsel or other qualified tax advisor to the Partnership,
cause the Partnership to cease to be classified as a partnership for federal
income tax purposes (except as a result of the Redemption (or acquisition by the
Parent) of all Units held by all Limited Partners and Non-Managing General
Partners (other than the Parent and any other Special Partner)); (vi) if such
Transfer would cause the Partnership to become, with respect to any employee
benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in
ERISA Section 3(14)) or a “disqualified person” (as defined in Code
Section 4975(c)); (vii) if such Transfer would, in the opinion of legal counsel
or other qualified tax advisor to the Partnership, cause any portion of the
assets of the Partnership to constitute assets of any employee benefit plan
pursuant to Department of Labor Regulations Section 2510.2-101; (viii) if such
Transfer requires the registration of such Partnership Interest pursuant to any
applicable Federal or state securities laws; (ix) if such Transfer would create
a material risk that the Partnership would become a “publicly traded
partnership,” as such term is defined in Code Section 469(k)(2) or Code 7704(b);
(x) if such Transfer would cause the Partnership to have more than one hundred
(100) partners (within the meaning of Regulations Section 1.7704-1(h), including
the look-through rule in Regulations Section 1.7704-1(h)(3)); (xi) if such
Transfer causes the Partnership to become a reporting company under the Exchange
Act; or (xii) if such Transfer subjects the Partnership to regulation under the
Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA,
each as amended; provided that the Managing General Partner may waive any of the
foregoing restrictions in its sole discretion.

(e)    Transfers pursuant to this Article 11, other than a Permitted Transfer to
a Permitted Transferee pursuant to the exercise of remedies under a Pledge, may
only be made on the first day of a fiscal quarter of the Partnership, unless the
Managing General Partner otherwise agrees.

Section 11.7    Restrictions on Termination Transactions. The Parent shall not
engage in, or cause or permit, a Termination Transaction, unless:

(a)    the Consent of the Limited Partners and Non-Managing General Partners is
obtained;

 

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(b)    in connection with any such Termination Transaction, each holder of
Class A Units (other than the Parent and its wholly owned Subsidiaries) will
receive, or will have the right to elect to receive, for each Class A Unit, an
amount of cash, securities or other property equal to the product of the
Adjustment Factor and the greatest amount of cash, securities or other property
paid to a holder of one Class A Common Share in consideration of one Class A
Common Share pursuant to the terms of such Termination Transaction; provided,
that if, in connection with such Termination Transaction, a purchase, tender or
exchange offer shall have been made to and accepted by the holders of a majority
of the outstanding Class A Common Shares, each holder of Class A Units (other
than the Parent and its wholly owned subsidiaries) will receive, or will have
the right to elect to receive, the greatest amount of cash, securities or other
property which such holder of Class A Units would have received had it exercised
its right to Redemption pursuant to Article 15 hereof and received Class A
Common Shares in exchange for its Class A Units immediately prior to the
expiration of such purchase, tender or exchange offer and had thereupon accepted
such purchase, tender or exchange offer and then such Termination Transaction
shall have been consummated (the Value, at the time of the Termination
Transaction, of the amount specified herein with respect to each Class A Unit is
referred to as the “Transaction Consideration”); or

(c)    all of the following conditions are met: (i) substantially all of the
assets directly or indirectly owned by the Partnership prior to the announcement
of the Termination Transaction are, immediately after the Termination
Transaction, owned directly or indirectly by the Partnership or another limited
partnership which is the survivor of a merger, consolidation or combination of
assets with the Partnership (in each case, the “Surviving Partnership”);
(ii) the Surviving Partnership is classified as a partnership for U.S. federal
income tax purposes; (iii) the Partners (other than the Parent and its wholly
owned Subsidiaries) that held Class A Units immediately prior to the
consummation of such Termination Transaction own a percentage interest of the
Surviving Partnership based on the relative fair market value of the net assets
of the Partnership and the other net assets of the Surviving Partnership
immediately prior to the consummation of such transaction; (iv) the Partners
will have the right to redeem their interests in the Surviving Partnership at
any time for cash in an amount equal to the Transaction Consideration; and
(v) the Managing General Partner determines, in good faith, that (A) the other
rights of the Limited Partners with respect to the Surviving Partnership, in the
aggregate, are not materially less favorable than those of Limited Partners
holding Class A Units immediately prior to the consummation of such transaction
and (B) the rights of the Non-Managing General Partners with respect to the
Surviving Partnership, in the aggregate, are not materially less favorable than
those of Non-Managing General Partners immediately prior to the consummation of
such transaction.

ARTICLE 12

ADMISSION OF PARTNERS

Section 12.1    Admission of Successor Managing General Partner. At any time,
the Managing General Partner or the Parent may designate any direct or indirect
wholly owned subsidiary of the Parent that is a Qualifying Parent Entity to
replace the incumbent Managing General Partner as Managing General Partner of
the Partnership. The Person so designated to become a successor Managing General
Partner shall be admitted to the Partnership as the Managing General Partner,
effective immediately upon the successor Managing General Partner executing and
delivering to the Partnership a counterpart signature page to this Agreement or
other written evidence of such successor Managing General Partner’s acceptance
of all of the terms and conditions of this Agreement. Upon any such admission of
any such successor Managing General Partner in accordance with this
Section 12.1, (i) the predecessor Managing General Partner shall be relieved of
its obligations under this Agreement and shall cease to be a General Partner of
the Partnership (and, to the extent that it retains an interest in the
Partnership, shall automatically become a Limited Partner) without any separate
Consent of the Partners or the consent or approval of any Partner, and (ii) the
successor Managing General Partner shall promptly notify the Partners in writing
of such replacement. Any such successor Managing General Partner shall carry on
the business of the Partnership without dissolution. If the Managing General
Partner resigns from the Partnership in violation of this Agreement, or
otherwise dissolves or terminates or ceases to be the Managing General Partner
of the Partnership, and the Parent does not replace the Managing General Partner
within thirty (30) days, then the Parent shall cause the Partnership to promptly
notify the Partners in writing of the same and a Majority in Interest of the
Partners may select a successor Managing General Partner.

Section 12.2    Admission or Withdrawal of Non-Managing General Partners.

(a)    The Managing General Partner shall admit as a Non-Managing General
Partner any Qualifying LenFive Entity that so requests, if such entity has
executed such instruments as are necessary to confirm its

 

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agreement to assume the obligations, and be bound by all the terms and
provisions, of this Agreement applicable to a Non-Managing General Partner, and
has executed such other agreements or instruments as the Managing General
Partner reasonably determines to be necessary to effectuate its admission as a
Non-Managing General Partner.

(b)    An event of withdrawal shall occur with respect to a Non-Managing General
Partner, and such Person shall immediately cease to be a Non-Managing General
Partner if (i) the Person notifies the Managing General Partner in writing that
it desires to withdraw as a General Partner and become a Limited Partner,
(ii) the Person ceases to be a Qualifying LenFive Entity, or (iii) the Person
suffers any event of withdrawal described in § 17-402 of the Act (each of
clauses (i) – (iii), an “Event of Withdrawal”). A Person that ceases to be a
Non-Managing General Partner shall immediately become a Limited Partner if it
retains an interest in the Partnership.

(c)    Upon the admission or withdrawal of any Non-Managing General Partner, the
Managing General Partner shall take all steps necessary and appropriate under
the Act to amend the Register and the books and records of the Partnership and,
if necessary, to prepare as soon as practical an amendment of this Agreement
and, if required by law, shall prepare and file an amendment to the Certificate
of Limited Partnership and may for this purpose exercise the power of attorney
granted pursuant to Section 2.4 hereof.

Section 12.3    Admission of Additional Limited Partners.

(a)    A Person (other than an existing Partner) who makes a Capital
Contribution to the Partnership in exchange for Units and in accordance with
this Agreement shall be admitted to the Partnership as an Additional Limited
Partner only upon furnishing to the Managing General Partner (i) evidence of
acceptance, in form and substance satisfactory to the Managing General Partner,
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 2.4 hereof (which may be a
counterpart signature page to this Agreement executed by such Person), and
(ii) such other documents or instruments as may be required by the Managing
General Partner in order to effect such Person’s admission as an Additional
Limited Partner. Concurrently with, and as evidence of, the admission of an
Additional Limited Partner, the Managing General Partner shall amend the
Register and the books and records of the Partnership to reflect the name,
address, number and type of Units of such Additional Limited Partner.

(b)    Notwithstanding anything to the contrary in this Section 12.3, no Person
shall be admitted as an Additional Limited Partner without the consent of the
Managing General Partner. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person is
recorded on the books and records of the Partnership, following the consent of
the Managing General Partner to such admission and the satisfaction of all the
conditions set forth in Section 12.3(a).

(c)    If any Additional Limited Partner is admitted to the Partnership on any
day other than the first day of a Partnership Year, then Net Income, Net Losses,
each item thereof and all other items of income, gain, loss, deduction and
credit allocable among Holders for such Partnership Year shall be allocated
among such Additional Limited Partner and all other Holders by taking into
account their varying interests during the Partnership Year in accordance with
Code Section 706(d), using the “interim closing of the books” method or another
permissible method selected by the Managing General Partner. Solely for purposes
of making such allocations, each of such items for the calendar month in which
an admission of any Additional Limited Partner occurs shall be allocated among
all the Holders including such Additional Limited Partner, in accordance with
the principles described in Section 11.6(c) hereof. All distributions with
respect to which the Partnership Record Date is before the date of such
admission shall be made solely to Partners and Assignees other than the
Additional Limited Partner, and all distributions thereafter shall be made to
all the Partners and Assignees including such Additional Limited Partner.

Section 12.4    Amendment of Agreement and Certificate of Limited Partnership.
For the admission to the Partnership of any Partner, the Managing General
Partner shall take all steps necessary and appropriate under the Act to amend
the Register and the books and records of the Partnership and, if necessary, to
prepare as soon as practical an amendment of this Agreement and, if required by
law, shall prepare and file an amendment to the Certificate of Limited
Partnership and may for this purpose exercise the power of attorney granted
pursuant to Section 2.4 hereof.

Section 12.5    Limit on Number of Partners. Notwithstanding any provision in
this Agreement to the contrary, unless otherwise permitted by the Managing
General Partner, no Person shall be admitted to the Partnership as an Additional
Limited Partner if the effect of such admission would be to cause the
Partnership to have a

 

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number of Partners (including as Partners for this purpose those Persons
indirectly owning an interest in the Partnership through another company, a
limited liability company, a subchapter S corporation or a grantor trust) that
would cause the Partnership to become a reporting company under the Exchange
Act.

Section 12.6    Admission. A Person shall be admitted as a Partner of the
Partnership only upon strict compliance, and not upon substantial compliance,
with the requirements set forth in this Agreement for admission to the
Partnership as a Partner.

ARTICLE 13

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 13.1    Dissolution. The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited Partners, or by
the admission of a successor Managing General Partner in accordance with the
terms of this Agreement. Upon the resignation of the Managing General Partner,
any successor Managing General Partner shall continue the business of the
Partnership without dissolution. However, the Partnership shall dissolve, and
its affairs shall be wound up, upon an election to dissolve the Partnership made
by the Managing General Partner (a “Liquidating Event”); provided, that if the
number of Class A Units then outstanding represent more than 1% of the total
number of Common Units outstanding as of the date hereof, then the Managing
General Partner shall not make an election to dissolve the Partnership without
first obtaining the Consent of the Limited Partners and Non-Managing General
Partners. The Partners hereby waive their right to seek a judicial dissolution
of the Partnership pursuant to the provisions of the Act.

Section 13.2    Winding Up.

(a)    Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets and satisfying the claims of its creditors and the
Holders. After the occurrence of a Liquidating Event, no Holder shall take any
action that is inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership’s business and affairs. The Managing General
Partner (or, in the event that there is no remaining Managing General Partner or
the Managing General Partner has dissolved, become bankrupt or ceased to
operate, any General Partner, of if there is no General Partner, any Person,
elected by a Majority in Interest of the Partners (the Managing General Partner
or such General Partner or other Person being referred to herein as the
“Liquidator”)) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership’s
liabilities and property, and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the Managing General
Partner, include shares in the Parent) shall be applied and distributed in the
following order:

(i)    First, to the satisfaction of all of the Partnership’s debts and
liabilities to creditors, including the Managing General Partner, the Parent and
any other Special Partner (whether by payment or the making of reasonable
provision for payment thereof), including, but not limited to, amounts due as
reimbursements under Section 7.4 hereof; and

(ii)    Second, subject to the terms of any Unit Designation, the balance, if
any, to the Holders in accordance with and in proportion to their positive
Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods. Liquidating distributions shall
be made by the end of the taxable year of such liquidation (or, if later, within
ninety (90) days after the date of such liquidation) in accordance with
Regulations Section 1.704-1(b)(2)(ii)(b)(2).

The Managing General Partner shall not receive any compensation for any services
performed pursuant to this Article 13.

(b)    Notwithstanding the provisions of Section 13.2(a) hereof that require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the
Partnership, the Liquidator determines that an immediate sale of part or all of
the Partnership’s assets would be impractical or would cause undue loss to the
Holders, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including

 

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liabilities to Holders as creditors) and/or distribute to the Holders, in lieu
of cash, as tenants in common and in accordance with the provisions of
Section 13.2(a) hereof, undivided interests in such Partnership assets as the
Liquidator deems not suitable for liquidation. Any such distributions in kind
shall be made only if, in the good faith judgment of the Liquidator, such
distributions in kind are in the best interest of the Holders, and shall be
subject to such conditions relating to the disposition and management of such
properties as the Liquidator deems reasonable and equitable and to any
agreements governing the operation of such properties at such time. The
Liquidator shall determine the fair market value of any property distributed in
kind using such reasonable method of valuation as it may adopt.

(c)    In the event that the Partnership is “liquidated,” within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant
to this Article 13 to the Holders that have positive Capital Accounts in
compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2) to the extent of,
and in proportion to, positive Capital Account balances. If any Holder has a
deficit balance in its Capital Account (after giving effect to all
contributions, distributions and allocations for all taxable years, including
the year during which such liquidation occurs), such Holder shall have no
obligation to make any contribution to the capital of the Partnership with
respect to such deficit, and such deficit shall not be considered a debt owed to
the Partnership or to any other Person for any purpose whatsoever. In the sole
and absolute discretion of the Managing General Partner or the Liquidator, a pro
rata portion of the distributions that would otherwise be made to the Holders
pursuant to this Article 13 may be:

(i)    distributed to a trust established for the benefit of the Managing
General Partner and the Holders for the purpose of liquidating Partnership
assets, collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the Managing
General Partner arising out of or in connection with the Partnership and/or
Partnership activities. The assets of any such trust shall be distributed to the
Holders, from time to time, in the reasonable discretion of the Managing General
Partner, in the same proportions and amounts as would otherwise have been
distributed to the Holders pursuant to this Agreement; or

(ii)    withheld or escrowed to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to reflect the unrealized portion of
any installment obligations owed to the Partnership, provided that such withheld
or escrowed amounts shall be distributed to the Holders in the manner and order
of priority set forth in Section 13.2(a) hereof as soon as practicable.

Section 13.3    Deemed Contribution and Distribution. Notwithstanding any other
provision of this Article 13, in the event that the Partnership is liquidated
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), but no
Liquidating Event has occurred, the Partnership’s Properties shall not be
liquidated, the Partnership’s liabilities shall not be paid or discharged and
the Partnership’s affairs shall not be wound up. Instead, for federal income tax
purposes the Partnership shall be deemed to have contributed all of its assets
and liabilities to a new limited partnership in exchange for an interest in the
new limited partnership; and immediately thereafter, distributed Units to the
Partners in the new limited partnership (which will be the same as the Units in
the Partnership held by them) in accordance with their respective Capital
Accounts in liquidation of the Partnership, and the new limited partnership is
deemed to continue the business of the Partnership. Nothing in this Section 13.3
shall be deemed to have constituted any Assignee as a Substituted Limited
Partner without compliance with the provisions of Section 11.4 hereof.

Section 13.4    Rights of Holders. Except as otherwise provided in this
Agreement and subject to the rights of any Holder of any Partnership Interest
set forth in a Unit Designation, (a) each Holder shall look solely to the assets
of the Partnership for the return of its Capital Contribution, (b) no Holder
shall have the right or power to demand or receive property other than cash from
the Partnership, and (c) no Holder shall have priority over any other Holder as
to the return of its Capital Contributions, distributions or allocations.

Section 13.5    Notice of Dissolution. In the event that a Liquidating Event
occurs, the Liquidator shall, within thirty (30) days thereafter, provide
written notice thereof to each of the Holders and, in the sole and absolute
discretion of the Liquidator, or as required by the Act, to all other parties
with whom the Partnership regularly conducts business (as determined in the sole
and absolute discretion of the Liquidator), and the Liquidator may, or, if
required by the Act, shall, publish notice thereof in a newspaper of general
circulation in each place in which the Partnership regularly conducts business
(as determined in the sole and absolute discretion of the Liquidator).

 

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Section 13.6    Reasonable Time for Winding-Up. A reasonable time shall be
allowed for the orderly winding-up of the business and affairs of the
Partnership and the liquidation of its assets pursuant to Section 13.2 hereof,
in order to minimize any losses otherwise attendant upon such winding-up, and
the provisions of this Agreement shall remain in effect between and among the
Partners during the period of liquidation.

Section 13.7    Cancellation of Certificate of Limited Partnership. Upon the
dissolution and completion of the winding up of the Partnership, the Partnership
shall be terminated, a certificate of cancellation shall be filed with the State
of Delaware, all qualifications of the Partnership as a foreign limited
partnership or association in jurisdictions other than the State of Delaware
shall be cancelled, and such other actions as may be necessary to terminate the
Partnership shall be taken.

ARTICLE 14

AMENDMENTS; MEETINGS; CONSENTS; MERGER,

CONSOLIDATION OR CONVERSION

Section 14.1    Amendments. Except as otherwise required or permitted by this
Agreement (including Section 7.3 and Section 4.4(e)), amendments to this
Agreement must be approved by the Consent of the Managing General Partner and
the Consent of the Limited Partners and Non-Managing General Partners, and may
be proposed only by (a) the Managing General Partner, or (b) Limited Partners
and Non-Managing General Partners holding a majority of the Class A Units then
held by all of the Limited Partners (excluding Special Partners) and
Non-Managing General Partners. Following such proposal, the Managing General
Partner shall submit to the Partners any proposed amendment that, pursuant to
the terms of this Agreement, requires the Consent of the Partners. The Managing
General Partner shall seek the Consent of the Partners entitled to vote thereon
on any such proposed amendment in accordance with Section 14.2 hereof. Upon
obtaining any such Consent, or any other Consent required by this Agreement, and
without further action or execution by any other Person, including any Partner,
(i) any amendment to this Agreement may be implemented and reflected in a
writing executed solely by the Managing General Partner, and (ii) all of the
Partners shall be deemed a party to and bound by such amendment of this
Agreement. Within thirty days after the effectiveness of any amendment to this
Agreement that does not receive the Consent of all Partners, the Managing
General Partner shall deliver a copy of such amendment to all Partners that did
not Consent to such amendment. For the avoidance of doubt, notwithstanding
anything to the contrary in this Agreement, this Agreement may not be amended
without the Consent of the Managing General Partner.

Section 14.2    Meetings and Consents of the Partners.

(a)    The actions requiring Consent of any Partner pursuant to this Agreement,
including Section 7.3 and Section 14.3 hereof, or otherwise pursuant to
applicable law, are subject to the procedures set forth in this Section 14.2.

(b)    Meetings of the Partners may be called only by the Managing General
Partner. The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners entitled to act at the
meeting not less than ten (10) days nor more than ninety (90) days prior to the
date of such meeting. Partners may vote in person or by proxy at such meeting.
Unless approval by a different number or proportion of the Partners is required
by this Agreement, or any Unit Designation, the affirmative vote of a Majority
in Interest of the Partners shall be sufficient to approve such proposal at a
meeting of the Partners. Whenever the Consent of any Partners is permitted or
required under this Agreement, such Consent may be given at a meeting of
Partners or in accordance with the procedure prescribed in Section 14.2(f)
hereof.

(c)    Each Partner entitled to act at a meeting of Partners may authorize any
Person or Persons to act for it by proxy on all matters in which a Partner is
entitled to participate, including waiving notice of any meeting, or voting or
participating at a meeting. Each proxy must be signed by the Partner or its
attorney-in-fact. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy (or
there is receipt of a proxy authorizing a later date). Every proxy shall be
revocable at the pleasure of the Partner executing it, such revocation to be
effective upon the Partnership’s receipt of written notice of such revocation
from the Partner executing such proxy, unless such proxy states that it is
irrevocable and is coupled with an interest.

(d)    The Managing General Partner may set, in advance, a record date for the
purpose of determining the Partners (i) entitled to Consent to any action,
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the Partners or (iii) in order to make a determination of Partners for any other
proper purpose. Such date, in any case, shall not be prior to the close of
business on the day the record date is fixed and shall be not more than ninety
(90) days and, in the case of a meeting of the Partners, not less than ten
(10) days, before the date on which the meeting is to be held. If no record date
is fixed, the record date for the determination of Partners entitled to notice
of or to vote at a meeting of the Partners shall be at the close of business on
the day on which the notice of the meeting is sent, and the record date for any
other determination of Partners shall be the effective date of such Partner
action, distribution or other event. When a determination of the Partners
entitled to vote at any meeting of the Partners has been made as provided in
this section, such determination shall apply to any adjournment thereof.

(e)    Each meeting of Partners shall be conducted by the Managing General
Partner or such other Person as the Managing General Partner may appoint
pursuant to such rules for the conduct of the meeting as the Managing General
Partner or such other Person deems appropriate in its sole and absolute
discretion. Without limitation, meetings of Partners may be conducted in the
same manner as meetings of the Parent’s shareholders and may be held at the same
time as, and as part of, the meetings of the Parent’s shareholders.

(f)    Any action requiring the Consent of any Partner or a group of Partners
pursuant to this Agreement, or that is required or permitted to be taken at a
meeting of the Partners, may be taken without a meeting if a Consent in writing
or by electronic transmission setting forth the action so taken or consented to
is given by Partners whose affirmative vote would be sufficient to approve such
action or provide such Consent at a meeting of the Partners. Such Consent may be
in one instrument or in several instruments, and shall have the same force and
effect as the affirmative vote of such Partner at a meeting of the Partners.
Such Consent shall be filed with the Managing General Partner. An action so
taken shall be deemed to have been taken at a meeting held on the effective date
so certified. For purposes of obtaining a Consent in writing or by electronic
transmission, the Managing General Partner may require a response within a
reasonable specified time, but not less than fifteen (15) days, and failure to
respond in such time period shall constitute a Consent that is consistent with
the Managing General Partner’s recommendation with respect to the proposal;
provided, however, that an action shall become effective at such time as
requisite Consents are received even if prior to such specified time.

Section 14.3    Merger, Consolidation or Conversion.

(a)    The Partnership may merge or consolidate with or into another limited
partnership, a limited liability company, a corporation or any “other business
entity,” as defined in Section 17-211 of the Delaware Act, or convert into a
limited liability company, a corporation or other business entity, whether such
entity is formed under the laws of the State of Delaware or any other state of
the United States of America, pursuant to a written agreement of merger or
consolidation (“Merger Agreement”) or a written plan of conversion (“Plan of
Conversion”), as the case may be, that has been approved by the Managing General
Partner after obtaining the Consent of the Limited Partners and Non-Managing
General Partners (except as provided in Section 14.3(b)). Any such Merger
Agreement or Plan of Conversion shall provide that (i) all holders of Class A
Units shall be entitled to receive the same consideration pursuant to such
transaction with respect to each of their Class A Units, and (ii) all holders of
Class B Units shall be entitled to receive the same consideration pursuant to
such transaction with respect to their Class B Units. Notwithstanding any such
Consent of the Limited Partners and Non-Managing General Partners, at any time
prior to the effectiveness of such merger, consolidation or conversion, the
Managing General Partner may terminate or abandon such transaction subject to
any provisions therefor set forth in such Merger Agreement or Plan of
Conversion.

(b)    Notwithstanding anything else contained in this Section 14.3 or in this
Agreement, the Managing General Partner is authorized to effect a merger,
consolidation or conversion of the Partnership, or a sale or transfer of all or
substantially all of the Partnership’s assets, without the Consent of the
Limited Partners and Non-Managing General Partners, if: (i) such transaction is
effected in connection with a Termination Transaction in accordance with
Section 11.7; or (ii) such transaction is either a conversion or is effected
with another entity that is newly formed and has no assets, liabilities or
operations prior to such merger, consolidation, sale or transfer, and (v) the
Managing General Partner has received an opinion of counsel that the merger,
consolidation, conversion, sale or transfer would not result in the loss of the
limited liability of any Limited Partner, other than a Limited Partner that
becomes a general partner of a partnership into which the Partnership is
converted or with which it is merged; (w) the Managing General Partner has
received an opinion of counsel or other qualified tax advisor, or a private
letter ruling from the IRS to the extent not addressed in the opinion, that the
merger, consolidation, conversion, sale or transfer would neither be taxable to
any Partner nor cause the Partnership to be treated as an association taxable as
a corporation or otherwise to be taxed as an entity for federal income tax
purposes (to the extent not previously treated as such); (x) the sole purpose of
such merger, consolidation, conversion, sale or transfer is to effect a mere
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organization of the Partnership; (y) the governing instruments of the new entity
provide the Partners and the Managing General Partner (or other governing body)
with substantially similar rights and obligations as are herein contained; and
(z) such transaction would not effect any other change to the rights of Limited
Partners or Non-Managing General Partners that, if effected as an amendment to
this Agreement, would require the consent of each Partner adversely affected
pursuant to Section 7.3(f).

(c)    If a merger, consolidation or conversion of the Partnership has been
approved as set forth in this Section 14.3, and such transaction has not been
terminated or abandoned, the Managing General Partner is authorized to execute
and file any and all documents to effect such transaction, including a
certificate of merger or certificate of conversion, as applicable, in conformity
with the requirements of the Act and any other applicable law.

(d)    Partners are not entitled to dissenters’ rights of appraisal in the event
of a merger, consolidation or conversion of the Partnership, or a sale or
transfer of all or substantially all of the assets of the Partnership or the
Partnership’s Subsidiaries, or any other similar transaction or event.

(e)    It is the intent of the parties hereto that a merger, consolidation or
conversion effected pursuant to this Section 14.3 shall not be deemed to result
in a transfer or assignment of assets or liabilities from one entity to another.

ARTICLE 15

GENERAL PROVISIONS

Section 15.1    Redemption Rights of Qualifying Parties.

(a)    After the Twelve-Month Period applicable to such Class A Units, a
Qualifying Party shall have the right (subject to the terms and conditions set
forth herein) to require the Partnership to redeem all or a portion of the
Class A Units held by such Tendering Party (Class A Units that have in fact been
tendered for redemption being hereafter referred to as “Tendered Units”) in
exchange (a “Redemption”) for the Cash Amount payable on the Specified
Redemption Date. The Partnership may, in the Managing General Partner’s sole and
absolute discretion, redeem Tendered Units at the request of the Holder thereof
prior to the end of the applicable Twelve-Month Period (subject to the terms and
conditions set forth herein) (a “Special Redemption”); provided that, unless
waived by the Parent, the Managing General Partner first receives a legal
opinion to the same effect as the legal opinion described in Section 15.1(e) of
this Agreement. Any Redemption shall be exercised pursuant to a Notice of
Redemption delivered to the Managing General Partner by the Qualifying Party
when exercising the Redemption right (the “Tendering Party”). The Partnership’s
obligation to effect a Redemption, however, shall not arise or be binding
against the Partnership (i) unless and until the Parent declines or fails to
exercise its purchase rights pursuant to Section 15.1(b) hereof following
receipt of a Notice of Redemption (a “Declination”) and (ii) until the Business
Day following the Cut-Off Date. In the event of a Redemption, the Cash Amount
shall be delivered as a certified or bank check payable to the Tendering Party
or, in the Managing General Partner’s sole and absolute discretion, or if the
Cash Amount exceeds $1 million, in immediately available funds via a federal
wire transfer on or before the Specified Redemption Date.

(b)    Notwithstanding the provisions of Section 15.1(a) hereof, on or before
the close of business on the Cut-Off Date, the Parent may, in its sole and
absolute discretion, elect to acquire some or all (such percentage being
referred to as the “Acquired Percentage”) of the Tendered Units from the
Tendering Party in exchange for the Class A Common Shares Amount calculated
based on the portion of Tendered Units it elects to acquire in exchange for
Class A Common Shares. If the Parent so elects, on the Specified Redemption Date
the Tendering Party shall sell such number of the Tendered Units to the Parent
in exchange for a number of Class A Common Shares equal to the product of the
Class A Common Shares Amount and the Acquired Percentage. The Tendering Party
shall submit such written representations, investment letters, legal opinions or
other instruments necessary, in the Parent’s view, to effect compliance with the
Securities Act. In the event of a purchase of the Tendered Units by the Parent
pursuant to this Section 15.1(b), the Tendering Party shall no longer have the
right to cause the Partnership to effect a Redemption of such Tendered Units,
and, upon notice to the Tendering Party by the Parent, given on or before the
close of business on the Cut-Off Date, that the Parent has elected to acquire
some or all of the Tendered Units pursuant to this Section 15.1(b), the
obligation of the Partnership to effect a Redemption of the Tendered Units as to
which the Parent’s notice relates shall not accrue or arise. A number of Class A
Common Shares equal to the product of the Acquired Percentage and the Class A
Common Shares Amount, if applicable, shall be delivered by the Parent as duly
authorized, validly issued, fully paid and non-assessable Class A Common Shares
and, if applicable, Rights, free of any pledge,

 

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lien, encumbrance or restriction, other than any restrictions provided in the
Parent LLC Agreement, the Securities Act and relevant state securities or “blue
sky” laws. Neither any Tendering Party whose Tendered Units are acquired by the
Parent pursuant to this Section 15.1(b), any Partner, any Assignee nor any other
interested Person shall have any right to require or cause the Parent to
register, qualify or list any Class A Common Shares owned or held by such
Person, whether or not such Class A Common Shares are issued pursuant to this
Section 15.1(b), with the SEC, with any state securities commissioner,
department or agency, under the Securities Act or the Exchange Act or with any
stock exchange; provided, however, that this limitation shall not be in
derogation of any registration or similar rights granted pursuant to any other
written agreement between the Parent and any such Person. Notwithstanding any
delay in such delivery, the Tendering Party shall be deemed the owner of such
Class A Common Shares and Rights for all purposes, including, without
limitation, rights to vote or consent, receive dividends, and exercise rights,
as of the Specified Redemption Date. Class A Common Shares issued upon an
acquisition of the Tendered Units by the Parent pursuant to this Section 15.1(b)
may contain such legends regarding restrictions under the Securities Act and
applicable state securities laws as the Parent in good faith determines to be
necessary or advisable in order to ensure compliance with such laws.

(c)    In the event of a Declination:

(i)    The Parent shall give notice of such Declination to the Tendering Party
on or before the close of business on the Cut-Off Date. The failure of the
Parent to give notice of such Declination by the close of business on the
Cut-Off Date shall be deemed to be an election by the Parent to acquire the
Tendered Units in exchange for Class A Common Shares.

(ii)    The Partnership shall raise funds for the payment of the Cash Amount by
requiring that the Parent contribute to the Partnership funds from (i) the
proceeds of a registered public offering by the Parent of Class A Common Shares
sufficient to purchase the Tendered Units or (ii) any other sources available to
the Parent or its Subsidiaries, unless such requirement is waived by the
Tendering Party, in which case the Partnership may fund such payment from any
available sources (including, but not limited to, the sale of any Property and
the incurrence of additional Debt).

(iii)    If the Cash Amount is not paid on or before the Specified Redemption
Date, interest shall accrue with respect to the Cash Amount from the day after
the Specified Redemption Date to and including the date on which the Cash Amount
is paid at a rate equal to the Applicable Federal Short-Term Rate as published
monthly by the IRS.

(d)    Notwithstanding anything herein to the contrary, with respect to any
Redemption (or any tender of Class A Units for Redemption if the Tendered Units
are acquired by the Parent pursuant to Section 15.1(b) hereof) pursuant to this
Section 15.1:

(i)    Without the Consent of the Managing General Partner, no Tendering Party
may effect a Redemption for less than 200,000 Class A Units or, if such
Tendering Party holds less than 200,000 Class A Units, all of the Class A Units
held by such Tendering Party.

(ii)    If (i) a Tendering Party surrenders Tendered Units during the period
after the Partnership Record Date with respect to a distribution payable to
Holders of Class A Units, and before the record date established by the Parent
for a dividend to its shareholders of some or all of its portion of such
Partnership distribution, and (ii) the Parent elects to acquire any of such
Tendered Units in exchange for Class A Common Shares pursuant to
Section 15.1(b), then such Tendering Party shall pay to the Parent on the
Specified Redemption Date an amount in cash equal to the Partnership
distribution paid or payable in respect of such Tendered Units.

(iii)    The consummation of such Redemption (or an acquisition of Tendered
Units by the Parent pursuant to Section 15.1(b) hereof, as the case may be)
shall be subject to the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

(iv)    The Tendering Party shall continue to own (subject, in the case of an
Assignee, to the provisions of Section 11.5 hereof) all Class A Units subject to
any Redemption,

 

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and be treated as a Partner or an Assignee, as applicable, with respect to such
Class A Units for all purposes of this Agreement, until the Specified Redemption
Date and until such Tendered Units are either paid for by the Partnership
pursuant to Section 15.1(a) hereof or transferred to the Parent and paid for by
the issuance of Class A Common Shares pursuant to Section 15.1(b). Until a
Specified Redemption Date and an acquisition of the Tendered Units by the Parent
pursuant to Section 15.1(b) hereof, the Tendering Party shall have no rights as
a shareholder of the Parent with respect to the Class A Common Shares issuable
in connection with such acquisition.

(e)    In connection with any Special Redemption, unless waived by the Parent,
the Tendering Party shall submit to the Parent, in addition to the Notice of
Redemption, an opinion of counsel reasonably satisfactory to it to the effect
that the proposed Special Redemption will not cause the Partnership or the
Managing General Partner to violate any Federal or state securities laws or
regulations applicable to the Special Redemption or the issuance and sale of
Class A Common Shares to the Tendering Party pursuant to Section 15.1(b) of this
Agreement.

(f)    Share Offering Funding Option

(i)    (1) Notwithstanding Sections 15.1(a) or 15.1(b) hereof, if (i) a Partner
has delivered to the Managing General Partner a Notice of Redemption with
respect to a number of Class A Units that, together with any other Tendered
Units from other Partners (collectively, the “Offering Units”), exceeds
$25,000,000 gross value, based on a Class A Unit price equal to the Value of a
Class A Common Share, and (ii) the Parent is eligible to file a registration
statement under Form S-3 (or any successor form similar thereto), then either:
(x) the Managing General Partner and the Parent may cause the Partnership to
redeem the Offering Units with the proceeds of an offering, whether registered
under the Securities Act or exempt from such registration, underwritten, offered
and sold directly to investors or through agents or other intermediaries, or
otherwise distributed (a “Share Offering Funding”) of a number of Class A Common
Shares (“Offered Shares”) equal to the Class A Common Shares Amount with respect
to the Offering Units pursuant to the terms of this Section 15.1(f); (y) the
Partnership shall pay the Cash Amount with respect to the Offering Units
pursuant to the terms of Section 15.1(a); or (z) the Parent shall acquire the
Offering Units in exchange for the Class A Common Shares Amount pursuant to the
terms of Section 15.1(b). The Managing General Partner and the Parent must
provide notice of their exercise of the election described in clause (x) above
to purchase the Tendered Units through a Share Offering Funding on or before the
Cut-Off Date.

(2)    If the Managing General Partner and the Parent elect a Share Offering
Funding with respect to a Notice of Redemption, the Managing General Partner may
give notice (a “Single Funding Notice”) of such election to all Partners and
require that all Partners elect whether or not to effect a Redemption to be
funded through such Share Offering Funding. If a Partner elects to effect such a
Redemption, it shall give notice thereof and of the number of Class A Units to
be made subject thereto in writing to the Managing General Partner within ten
(10) Business Days after receipt of the Single Funding Notice, and such Partner
shall be treated as a Tendering Party for all purposes of this Section 15.1(f).

(ii)    If the Managing General Partner and the Parent elect a Share Offering
Funding, on the Specified Redemption Date, the Partnership shall redeem each
Offering Unit that is still a Tendered Unit on such date for cash in immediately
available funds in an amount (the “Share Offering Funding Amount”) equal to the
net proceeds per Offered Share received by the Parent from the Share Offering
Funding, determined after deduction of underwriting discounts and commissions
but no other expenses of the Parent or any other Partner related thereto,
including without limitation, legal and accounting fees and expenses, SEC
registration fees, state blue sky and securities laws fees and expenses,
printing expenses, FINRA filing fees, exchange listing fees and other out of
pocket expenses (the “Net Proceeds”).

(iii)    If the Managing General Partner and the Parent elect a Share Offering
Funding, the following additional terms and conditions shall apply:

(1)    As soon as practicable after the Managing General Partner and the Parent
elect to effect a Share Offering Funding, the Parent shall use its reasonable

 

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efforts to effect as promptly as possible a registration, qualification or
compliance (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualifications under applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other governmental
requirements or regulations) as would permit or facilitate the sale and
distribution of the Offered Shares; provided, that, if the Parent shall deliver
a certificate to the Tendering Party stating that the Parent has determined in
the good faith judgment of the Board of Directors that such filing, registration
or qualification would require disclosure of material non-public information,
the disclosure of which would have a material adverse effect on the Parent, then
the Parent may delay making any filing or delay the effectiveness of any
registration or qualification for the shorter of (a) the period ending on the
date upon which such information is disclosed to the public or ceases to be
material or (b) an aggregate period of ninety (90) days in connection with any
Share Offering Funding.

(2)    The Parent shall advise each Tendering Party, regularly and promptly upon
any request, of the status of the Share Offering Funding process, including the
timing of all filings, the selection of and understandings with underwriters,
agents, dealers and brokers, the nature and contents of all communications with
the SEC and other governmental bodies, the expenses related to the Share
Offering Funding as they are being incurred, the nature of marketing activities,
and any other matters reasonably related to the timing, price and expenses
relating to the Share Offering Funding and the compliance by the Parent with its
obligations with respect thereto. The Parent will have reasonable procedures
whereby the Tendering Party with the largest number of Offering Units (the “Lead
Tendering Party”) may represent all the Tendering Parties in connection with the
Share Offering Funding by allowing it to participate in meetings with the
underwriters of the Share Offering Funding. In addition, the Parent and each
Tendering Party may, but shall be under no obligation to, enter into
understandings in writing (“Pricing Agreements”) whereby the Tendering Party
will agree in advance as to the acceptability of a Net Proceeds amount at or
below a specified amount. Furthermore, the Parent shall establish pricing
notification procedures with each such Tendering Party, such that the Tendering
Partner will have the maximum opportunity practicable to determine whether to
become a Withdrawing Partner pursuant to Section 15.1(f)(iii)(3) below.

(3)    The Parent will permit the Lead Tendering Party to participate in the
pricing discussions for the Share Offering Funding and, upon notification of the
price per Class A Common Share in the Share Offering Funding from the managing
underwriter(s), in the case of a registered public offering, or lead placement
agent(s), in the event of an unregistered offering, engaged by the Special
Limited Party in order to sell the Offered Shares, shall immediately use its
reasonable efforts to notify each Tendering Party of the price per Class A
Common Share in the Share Offering Funding and resulting Net Proceeds. Each
Tendering Party shall have one hour from the receipt of such written notice (as
such time may be extended by the Parent) to elect to withdraw its Redemption (a
Tendering Party making such an election being a “Withdrawing Partner”), and
Class A Units with a Class A Common Shares Amount equal to such excluded Offered
Shares shall be considered to be withdrawn from the related Redemption;
provided, however, that the Parent shall keep each of the Tendering Parties
reasonably informed as to the likely timing of delivery of its notice. If a
Tendering Party, within such time period, does not notify the Parent of such
Tendering Party’s election not to become a Withdrawing Partner, then such
Tendering Party shall, except as otherwise provided in a Pricing Agreement, be
deemed not to have withdrawn from the Redemption, without liability to the
Parent. To the extent that the Parent is unable to notify any Tendering Party,
such unnotified Tendering Party shall, except as otherwise provided in any
Pricing Agreement, be deemed not to have elected to become a Withdrawing
Partner. Each Tendering Party whose Redemption is being funded through the Share
Offering Funding who does not become a Withdrawing Partner shall have the right,
subject to the approval of the managing underwriter(s) or placement agent(s) and
restrictions of any applicable securities laws, to submit for Redemption
additional Class A Units in a number no greater than the number of Class A Units
withdrawn. If more than one Tendering Party so elects to redeem additional
Class A Units, then such Class A Units shall be redeemed on a pro rata basis,
based on the number of additional Class A Units sought to be so redeemed.

 

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(4)    The Parent shall take all reasonable action in order to effectuate the
sale of the Offered Shares including, but not limited to, the entering into of
an underwriting or placement agreement in customary form with the managing
underwriter(s) or placement agent(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter(s) or placement agent(s) advises the Parent in writing that
marketing factors require a limitation of the number of shares to be offered,
then the Parent shall so advise all Tendering Parties and the number of Class A
Units to be sold to the Parent pursuant to the Redemption shall be allocated
among all Tendering Parties in proportion, as nearly as practicable, to the
respective number of Class A Units as to which each Tendering Party elected to
effect a Redemption. Notwithstanding anything to the contrary in this Agreement,
if the Parent is also offering to sell shares for purposes other than to fund
the redemption of Offering Units and to pay related expenses, then those other
shares may in the Parent’s sole discretion be given priority over any shares to
be sold in the Share Offering Funding, and any shares to be sold in the Share
Offering Funding shall be removed from the offering prior to removing shares the
proceeds of which would be used for other purposes of the Parent. No Offered
Shares excluded from the underwriting by reason of the managing underwriter’s or
placement agent’s marketing limitation shall be included in such offering.

Section 15.2    Addresses and Notice. Any notice, demand, request or report
required or permitted to be given or made to a Partner or Assignee under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class United States mail or by other means of
written or electronic communication (including by telecopy, facsimile,
electronic mail or commercial courier service) to the Partner, or Assignee at
the address for such Partner set forth in the Register, or such other address of
which the Partner shall notify the Managing General Partner in accordance with
this Section 15.2.

Section 15.3    Titles and Captions. All article or Section titles or captions
in this Agreement are for convenience only. They shall not be deemed part of
this Agreement and in no way define, limit, extend or describe the scope or
intent of any provisions hereof. Except as specifically provided otherwise,
references to “Articles” or “Sections” are to Articles and Sections of this
Agreement.

Section 15.4    Pronouns and Plurals. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.

Section 15.5    Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.

Section 15.6    Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.

Section 15.7    Waiver.

(a)    No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.

(b)    The restrictions, conditions and other limitations on the rights and
benefits of the Partners contained in this Agreement, and the duties, covenants
and other requirements of performance or notice by the Partners, are for the
benefit of the Partnership and, except for an obligation to pay money to the
Partnership, may be waived or relinquished by the Managing General Partner, in
its sole and absolute discretion, on behalf of the Partnership in one or more
instances from time to time and at any time; provided, however, that any such
waiver or relinquishment may not be made if it would have the effect of
(i) creating liability for any other Partners, (ii) causing the Partnership to
cease to qualify as a limited partnership, (iii) reducing the amount of cash
otherwise distributable to the Partners (other than any such reduction that
affects all of the Partners holding the same class or series of Units on a
uniform or pro rata basis, if approved by a Majority in Interest of the Partners
holding such class or series of Units), (iv) resulting in the classification of
the Partnership as an association or publicly traded partnership taxable as a
corporation, or (v) violating the Securities Act, the Exchange Act or any state
“blue sky” or other securities laws.

 

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Section 15.8    Counterparts. This Agreement may be executed in counterparts,
all of which together shall constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto.

Section 15.9    Applicable Law; Consent to Jurisdiction; Jury Trial.

(a)    This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law. In the event of a conflict between any provision of this
Agreement and any non-mandatory provision of the Act, the provisions of this
Agreement shall control and take precedence.

(b)    Each Partner hereby (i) submits to the non-exclusive jurisdiction of any
state or federal court sitting in the State of Delaware (collectively, the
“Delaware Courts”), with respect to any dispute arising out of this Agreement or
any transaction contemplated hereby to the extent such courts would have subject
matter jurisdiction with respect to such dispute, (ii) irrevocably waives, and
agrees not to assert by way of motion, defense, or otherwise, in any such
action, any claim that it is not subject personally to the jurisdiction of any
of the Delaware Courts, that its property is exempt or immune from attachment or
execution, that the action is brought in an inconvenient forum, or that the
venue of the action is improper, (iii) agrees that notice or the service of
process in any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby shall be properly served or
delivered if delivered to such Partner at such Partner’s last known address as
set forth in the Partnership’s books and records, and (iv) IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 15.10    Entire Agreement. This Agreement contains all of the
understandings and agreements between and among the Partners with respect to the
subject matter of this Agreement and the rights, interests and obligations of
the Partners with respect to the Partnership. Notwithstanding any provision in
this Agreement or any Unit Designation to the contrary, including any provisions
relating to amending this Agreement, the Partners hereby acknowledge and agree
that the Managing General Partner, without the approval of any Partner, may
enter into side letters or similar written agreements with Partners that are not
Affiliates of the Managing General Partner, executed contemporaneously with the
admission of such Partner to the Partnership, which may have the effect of
establishing rights under, or altering or supplementing the terms of, this
Agreement or any Unit Designation, as negotiated with such Partner and which the
Managing General Partner in its sole discretion deems necessary, desirable or
appropriate. The parties hereto agree that any terms, conditions or provisions
contained in such side letters or similar written agreements with a Partner
shall govern with respect to such Partner notwithstanding the provisions of this
Agreement.

Section 15.11    Invalidity of Provisions. If any provision of this Agreement is
or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.

Section 15.12    No Partition. No Partner nor any successor-in-interest to a
Partner shall have the right while this Agreement remains in effect to have any
property of the Partnership partitioned, or to file a complaint or institute any
proceeding at law or in equity to have such property of the Partnership
partitioned, and each Partner, on behalf of itself and its successors and
assigns hereby waives any such right. It is the intention of the Partners that
the rights of the parties hereto and their successors-in-interest to Partnership
property, as among themselves, shall be governed by the terms of this Agreement,
and that the rights of the Partners and their respective successors-in-interest
shall be subject to the limitations and restrictions as set forth in this
Agreement.

Section 15.13    No Third-Party Rights Created Hereby. The provisions of this
Agreement are solely for the purpose of defining the interests of the Holders,
inter se; and no other person, firm or entity (i.e., a party who is not a
signatory hereto or a permitted successor to such signatory hereto) shall have
any right, power, title or interest by way of subrogation or otherwise, in and
to the rights, powers, title and provisions of this Agreement, except as
provided in Section 7.9. No creditor or other third party having dealings with
the Partnership (other than as expressly set forth herein with respect to
Indemnitees) shall have the right to enforce the right or obligation of any
Partner to make Capital Contributions or loans to the Partnership or to pursue
any other right or remedy hereunder or at law or in equity. None of the rights
or obligations of the Partners herein set forth to make Capital Contributions or
loans to the

 

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Partnership shall be deemed an asset of the Partnership for any purpose by any
creditor or other third party, nor may any such rights or obligations be sold,
Transferred or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or any of
the Partners.

Section 15.14    Delivery by Electronic Transmission. This Agreement and any
signed agreement or instrument entered into in connection with this Agreement or
contemplated hereby, and any amendments hereto or thereto, to the extent signed
and delivered by means of an electronic transmission, including by a facsimile
machine or via email, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall re-execute original forms thereof and
deliver them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of electronic transmission by a facsimile machine
or via email to deliver a signature or the fact that any signature or agreement
or instrument was transmitted or communicated through such electronic
transmission as a defense to the formation of a contract and each such party
forever waives any such defense.

Section 15.15    No Rights as Shareholders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders of Units any rights whatsoever
as shareholders of the Partnership, including without limitation any right to
receive dividends or other distributions made to shareholders of the Parent or
to vote or to consent or receive notice as shareholders in respect of any
meeting of shareholders for the election of directors of the Parent or any other
matter.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above.

 

FIVE POINT HOLDINGS, LLC By:  

/s/ Michael Alvarado

  Name:   Michael Alvarado   Title:   Vice President and Secretary

FIVE POINT OPCO GP, LLC,

as Managing General Partner

By:  

FIVE POINT HOLDINGS, LLC,

its Sole Member

By:  

/s/ Michael Alvarado

  Name:   Michael Alvarado   Title:   Vice President and Secretary

 

[Signature page to Limited Partnership Agreement of Five Point Operating
Company, LP]

--------------------------------------------------------------------------------

LENFIVE OPCO GP, LLC, as Non-Managing General Partner         By:   LenFive,
LLC,   Its Sole Member         By:  

Lennar Homes of California, Inc.,

Its Sole Member

  By:  

/s/ Mark Sustana

  Name:   Mark Sustana   Title:   Vice President

LENFIVE SUB OPCO GP, LLC,

as Non-Managing General Partner

        By:   LenFive Sub, LLC,   Its Sole Member         By:   LenFive, LLC,  
Its Sole Member         By:   Lennar Homes of California, Inc.,   Its Sole
Member   By:  

/s/ Mark Sustana

  Name:   Mark Sustana   Title:   Vice President

 

[Signature page to Limited Partnership Agreement of Five Point Operating
Company, LP]

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EXHIBIT A: EXAMPLES REGARDING ADJUSTMENT FACTOR

For purposes of the following examples, it is assumed that (a) the Adjustment
Factor in effect on December 31, 2017 is 1.0 and (b) on January 1, 2018 (the
“Partnership Record Date” for purposes of these examples), prior to the events
described in the examples, there are 100 Class A Common Shares issued and
outstanding.

Example 1

On the Partnership Record Date, the Parent declares a dividend on its
outstanding Class A Common Shares in Class A Common Shares. The amount of the
dividend is one Class A Common Share paid in respect of each Class A Common
Share owned. Pursuant to Paragraph (i) of the definition of “Adjustment Factor,”
the Adjustment Factor shall be adjusted on the Partnership Record Date,
effective immediately after the share dividend is declared, as follows:

1.0 * 200/100 = 2.0

Accordingly, the Adjustment Factor after the share dividend is declared is 2.0.

Example 2

On the Partnership Record Date, the Parent distributes options to purchase
Class A Common Shares to all holders of its Class A Common Shares. The amount of
the distribution is one option to acquire one Class A Common Share in respect of
each Class A Common Share owned. The strike price is $4.00 a share. The Value of
a Class A Common Share on the Partnership Record Date is $5.00 per share.
Pursuant to Paragraph (ii) of the definition of “Adjustment Factor,” the
Adjustment Factor shall be adjusted on the Partnership Record Date, effective
immediately after the options are distributed, as follows:

1.0 * (100 + 100)/(100 + [100 * $4.00/$5.00]) = 1.1111

Accordingly, the Adjustment Factor after the options are distributed is 1.1111.
If the options expire or become no longer exercisable, then the retroactive
adjustment specified in Paragraph (ii) of the definition of “Adjustment Factor”
shall apply.

Example 3

On the Partnership Record Date, the Parent distributes assets to all holders of
its Class A Common Shares. The amount of the distribution is one asset with a
fair market value (as determined by the Managing General Partner) of $1.00 in
respect of each Class A Common Share owned. It is also assumed that the assets
do not relate to assets received by the Managing General Partner pursuant to a
pro rata distribution by the Partnership. The Value of a Class A Common Share on
the Partnership Record Date is $5.00 a share. Pursuant to Paragraph (iii) of the
definition of “Adjustment Factor,” the Adjustment Factor shall be adjusted on
the Partnership Record Date, effective immediately after the assets are
distributed, as follows:

1.0 * $5.00/($5.00 - $1.00) = 1.25

Accordingly, the Adjustment Factor after the assets are distributed is 1.25.

 

1

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EXHIBIT B: NOTICE OF REDEMPTION

 

To: Five Point Opco GP, LLC

c/o Five Point Holdings, LLC

25 Enterprise

Aliso Viejo, CA 92656

The undersigned Partner or Assignee hereby irrevocably tenders for Redemption
Class A Units in Five Point Operating Company, LP in accordance with the terms
of the Limited Partnership Agreement of Five Point Operating Company, LP, dated
as of [                    ], 2017 (the “Agreement”), and the Redemption rights
referred to therein. All capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed to them in the Agreement. The
undersigned Partner or Assignee:

(a) undertakes (i) to surrender such Class A Units at the closing of the
Redemption and (ii) to furnish to the Parent, prior to the Specified Redemption
Date, the documentation, instruments and information required under Section 15.1
of the Agreement;

(b) directs that the certified check representing the Cash Amount, or the
Class A Common Shares Amount, as applicable, deliverable upon the closing of
such Redemption be delivered to the address specified below;

(c) if the Cash Amount is eligible to be paid by wire transfer, directs that it
be paid in accordance with the instructions below;

(d) represents, warrants, certifies and agrees that: (i) the undersigned Partner
or Assignee is a Qualifying Party; (ii) the undersigned Partner or Assignee has,
and at the closing of the Redemption will have, good, marketable and
unencumbered title to such Class A Units, free and clear of the rights or
interests of any other person or entity; (iii) the undersigned Partner or
Assignee has, and at the closing of the Redemption will have, the full right,
power and authority to tender and surrender such Class A Units as provided
herein; (iv) the undersigned Partner or Assignee, and the tender and surrender
of such Class A Units for Redemption as provided herein complies with all
conditions and requirements for redemption of Class A Units set forth in the
Agreement; and (v) the undersigned Partner or Assignee has obtained the consent
or approval of all persons and entities, if any, having the right to consent to
or approve such tender and surrender; and

(e) acknowledges that the undersigned will continue to own such Class A Units
unless and until either (1) such Class A Units are acquired by the Parent
pursuant to Section 15.1(b) of the Agreement or (2) such redemption transaction
closes.

Dated:                     

 

 

Name of Partner or Assignee:

 

Signature of Partner or Assignee

 

Street Address

 

City, State and Zip Code

 

Social security or identifying number Signature Medallion Guaranteed by:

 

 

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Issue Check Payable to (or shares in the name of):

 

Wire Transfer Instructions:

 

 

 

 

 

2