Exhibit 10.1

 

 

 

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

OF

FIFTH STREET HOLDINGS L.P.

 

Dated as of October 29, 2014

 

 

 

THE PARTNERSHIP UNITS OF FIFTH STREET HOLDINGS L.P. HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAWS OF ANY
STATE, PROVINCE OR ANY OTHER APPLICABLE SECURITIES LAWS AND ARE BEING SOLD IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND SUCH LAWS. SUCH UNITS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT
BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY
TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OR PROVINCE, AND ANY OTHER APPLICABLE SECURITIES LAWS; (II)
THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED LIMITED PARTNERSHIP
AGREEMENT; AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN
THE GENERAL PARTNER AND THE APPLICABLE LIMITED PARTNER. THEREFORE, PURCHASERS
AND OTHER TRANSFEREES OF SUCH UNITS WILL BE REQUIRED TO BEAR THE RISK OF THEIR
INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.

 

 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I   DEFINITIONS 1 SECTION 1.01   Definitions 1 ARTICLE II   FORMATION,
TERM, PURPOSE AND POWERS 9 SECTION 2.01   Formation 9 SECTION 2.02   Name 9
SECTION 2.03   Term 10 SECTION 2.04   Offices 10 SECTION 2.05   Agent for
Service of Process; Existence and Good Standing; Foreign Qualification 10
SECTION 2.06   Business Purpose 10 SECTION 2.07   Powers of the Partnership 10
SECTION 2.08   Partners; Admission of New Partners 10 SECTION 2.09   Withdrawal
11 SECTION 2.10   Investment Representations of Partners 11 ARTICLE
III   MANAGEMENT 11 SECTION 3.01   General Partner 11 SECTION
3.02   Compensation 12 SECTION 3.03   Expenses 12 SECTION 3.04   Officers 12
SECTION 3.05   Authority of Partners 13 SECTION 3.06   Action by Written Consent
or Ratification 13 ARTICLE IV   DISTRIBUTIONS 13 SECTION 4.01   Distributions 13
SECTION 4.02   Liquidation Distribution 14 SECTION 4.03   Limitations on
Distribution 15 ARTICLE V   CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; TAX
ALLOCATIONS; TAX MATTERS 15 SECTION 5.01   Initial Capital Contributions 15
SECTION 5.02   No Additional Capital Contributions 15 SECTION 5.03   Capital
Accounts 15 SECTION 5.04   Allocations of Profits and Losses 15 SECTION
5.05   Special Allocations 15 SECTION 5.06   Tax Allocations 17 SECTION
5.07   Tax Advances 17 SECTION 5.08   Tax Matters 18

 

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SECTION 5.09   Other Allocation Provisions 18 SECTION 5.10   Section 754
Election 18 ARTICLE VI   BOOKS AND RECORDS; REPORTS 18 SECTION 6.01   Books and
Records 18 ARTICLE VII   PARTNERSHIP UNITS 19 SECTION 7.01   Units 19 SECTION
7.02   Register 20 SECTION 7.03   Registered Partners 20 SECTION
7.04   Preemptive Rights 20 ARTICLE VIII   VESTING; FORFEITURE OF INTERESTS;
TRANSFER RESTRICTIONS 21 SECTION 8.01   Vesting of Unvested Units 21 SECTION
8.02   Limited Partner Transfers 21 SECTION 8.03   Mandatory Exchanges 22
SECTION 8.04   Encumbrances 22 SECTION 8.05   Further Restrictions 23 SECTION
8.06   Rights of Assignees 24 SECTION 8.07   Admissions, Withdrawals and
Removals 24 SECTION 8.08   Admission of Assignees as Substitute Limited Partners
24 SECTION 8.09   Withdrawal and Removal of Limited Partners 25 ARTICLE
IX   DISSOLUTION, LIQUIDATION AND TERMINATION 25 SECTION 9.01   No Dissolution
25 SECTION 9.02   Events Causing Dissolution 25 SECTION 9.03   Distribution upon
Dissolution 26 SECTION 9.04   Time for Liquidation 26 SECTION 9.05   Termination
26 SECTION 9.06   Claims of the Partners 27 SECTION 9.07   Survival of Certain
Provisions 27 ARTICLE X   LIABILITY AND INDEMNIFICATION 27 SECTION
10.01   Liability of Partners 27 SECTION 10.02   Indemnification 28 ARTICLE
XI   MISCELLANEOUS 30 SECTION 11.01   Severability 30 SECTION 11.02   Notices 31
SECTION 11.03   Cumulative Remedies 31 SECTION 11.04   Binding Effect 31

 

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SECTION 11.05   Interpretation 31 SECTION 11.06   Counterparts 32 SECTION
11.07   Further Assurances 32 SECTION 11.08   Entire Agreement 32 SECTION
11.09   Governing Law 32 SECTION 11.10   Dispute Resolution 32 SECTION
11.11   Expenses 34 SECTION 11.12   Amendments and Waivers 35 SECTION 11.13   No
Third Party Beneficiaries 36 SECTION 11.14   Headings 36 SECTION 11.15   Power
of Attorney 36 SECTION 11.16   Separate Agreements; Schedules 37 SECTION
11.17   Partnership Status 37 SECTION 11.18   Delivery by Facsimile or Email 37

 

iii

 

 

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

OF

FIFTH STREET HOLDINGS L.P.

 

This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this “Agreement”) of
Fifth Street Holdings L.P. (the “Partnership”) is made as of the 29th day of
October, 2014, by and among Fifth Street Asset Management Inc., a corporation
formed under the laws of the State of Delaware (“FSAM”), as general partner, and
the Limited Partners (as defined herein) of the Partnership.

 

WHEREAS, the Partnership was formed as a limited partnership pursuant to the
Act, by the filing of a Certificate of Limited Partnership (the “Certificate”)
with the Office of the Secretary of State of the State of Delaware and the
execution of the Limited Partnership Agreement of the Partnership dated as of
June 27, 2014 (the “Original Agreement”); and

 

WHEREAS, on the date of this Agreement, each of the Limited Partners contributed
to the Partnership all of the membership interests of Fifth Street Asset
Management LLC owned by such Limited Partners and, in exchange therefore,
received limited partnership interests of the Partnership; and

 

WHEREAS, on the date of this Agreement, certain of the Limited Partners
contributed to the Partnership all of the equity interests of Fifth Street
Capital LLC, FSC LLC, FSC Midwest LLC, FSC CT LLC and FSCO GP LLC

 

WHEREAS, the parties hereto desire to enter into this Amended and Restated
Limited Partnership Agreement of the Partnership and to permit the admission of
the Limited Partners to the Partnership.

 

NOW, THEREFORE, in consideration of the mutual promises and agreements herein
made and intending to be legally bound hereby, the parties hereto agree to amend
and restate the Original Agreement in its entirety to read as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.01       Definitions. Capitalized terms used herein without definition
have the following meanings (such meanings being equally applicable to both the
singular and plural form of the terms defined):

 

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

 

“Additional Credit Amount” has the meaning set forth in Section 4.01(b)(ii).

 

 

 

 

 

“Adjusted Capital Account Balance” means, with respect to each Partner, the
balance in such Partner’s Capital Account adjusted (a) by taking into account
the adjustments, allocations and distributions described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6); and (b) by adding to such balance
such Partner’s share of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain, determined pursuant to Treasury Regulations Sections 1.704-2(g)
and 1.704-2(i)(5), any amounts such Partner is obligated to restore pursuant to
any provision of this Agreement or by applicable Law. The foregoing definition
of Adjusted Capital Account Balance is intended to comply with the provisions of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

 

“Affiliate” means, with respect to a specified Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such specified Person.

 

“Agreement” has the meaning set forth in the preamble of this Agreement.

 

“Amended Tax Amount” has the meaning set forth in Section 4.01(b)(ii).

 

“Assignee” has the meaning set forth in Section 8.07.

 

“Assumed Tax Rate” means the highest effective marginal combined U.S. federal,
state and local income tax rate for a Fiscal Year prescribed for an individual
or corporate resident in New York, New York (taking into account (a) the
nondeductiblity of expenses subject to the limitation described in Section 67(a)
of the Code and (b) the character (e.g., long-term or short-term capital gain or
ordinary or exempt income) of the applicable income, but not taking into account
the deductibility of state and local income taxes for U.S. federal income tax
purposes). For the avoidance of doubt, the Assumed Tax Rate will be the same for
all Partners.

 

“Available Cash” means, with respect to any fiscal period, the amount of cash on
hand which the General Partner, in its reasonable discretion, deems available
for distribution to the Partners, taking into account all debts, liabilities and
obligations of the Partnership and amounts which the General Partner, in its
reasonable discretion, deems necessary to expend or retain for working capital
or to place into reserves for customary and usual claims with respect to the
Partnership’s operations.

 

“Capital Account” means the separate capital account maintained for each Partner
in accordance with Section 5.03 hereof.

 

“Capital Contribution” means, with respect to any Partner, the aggregate amount
of money contributed to the Partnership and the Carrying Value of any property
(other than money), net of any liabilities assumed by the Partnership upon
contribution or to which such property is subject, contributed to the
Partnership pursuant to Article V.

 

“Carrying Value” means, with respect to any Partnership asset, the asset’s
adjusted basis for U.S. federal income tax purposes, except that the initial
carrying value of assets contributed to the Partnership shall be their
respective gross fair market values on the date of contribution as determined by
the General Partner, and the Carrying Values of all Partnership assets shall be
adjusted to equal their respective fair market values, in accordance with the
rules set forth in Treasury Regulation Section 1.704-1(b)(2)(iv)(f), except as
otherwise provided herein, as of: (a) the date of the acquisition of any
additional Partnership interest by any new or existing Partner in exchange for
more than a de minimis Capital Contribution; (b) the date of the distribution of
more than a de minimis amount of Partnership assets to a Partner; (c) the date a
Partnership interest is relinquished to the Partnership; or (d) any other date
specified in the Treasury Regulations; provided, however, that adjustments
pursuant to clauses (a), (b) (c) and (d) above shall be made only if such
adjustments are deemed necessary or appropriate by the General Partner to
reflect the relative economic interests of the Partners. The Carrying Value of
any Partnership asset distributed to any Partner shall be adjusted immediately
before such distribution to equal its fair market value. In the case of any
asset that has a Carrying Value that differs from its adjusted tax basis,
Carrying Value shall be adjusted by the amount of depreciation calculated for
purposes of the definition of “Profits (Losses)” rather than the amount of
depreciation determined for U.S. federal income tax purposes, and depreciation
shall be calculated by reference to Carrying Value rather than tax basis once
Carrying Value differs from tax basis.

 

2

 

 

“Cause” means, with respect to any Service Provider, the definition set forth in
their respective employment agreement with FSM LLC or an Affiliate or, if no
such agreement exists or if not defined in such agreement, (a) the failure of
such Service Provider to substantially perform his duties to FSM LLC or any
Affiliate of FSM LLC that employs the Service Provider, including, without
limitation, a material reduction in working hours or work product, or a material
decline in quality of work (other than any such failure caused by such Service
Provider’s incapacity due to physical or mental impairment); (b) the conviction
or admission of a felony or a crime involving moral turpitude; (c) conduct
reasonably tending to bring the Partnership, FSM LLC, FSAM, FSC or FSFR into
public disgrace or disrepute; (d) an act of fraud, misappropriation or
embezzlement of any material assets or property of the Partnership or any of its
customers or Affiliates; (e) gross negligence or willful misconduct with respect
to the Partnership or any of its customers or Affiliates; (f) breach, in any
material respect, of any of the representations or warranties of the Service
Provider set forth in a written employment agreement, non-solicitation agreement
or non-disclosure agreement between FSM LLC (or an Affiliate of the Partnership)
and the Service Provider; or (g) willful breach of any covenant set forth in a
written employment agreement, non-solicitation agreement or non-disclosure
agreement between FSM LLC (or an Affiliate of the Partnership) and the Service
Provider.

 

“Certificate” has the meaning set forth in the preamble of this Agreement.

 

“Class” means the classes of Units into which the limited partnership interests
in the Partnership may be classified or divided from time to time by the General
Partner in its sole discretion pursuant to the provisions of this Agreement. As
of the date of this Agreement the only Class is the Class A Units. Subclasses
within a Class shall not be separate Classes for purposes of this Agreement. For
all purposes hereunder and under the Act, only such Classes expressly
established under this Agreement, including by the General Partner in accordance
with this Agreement, shall be deemed to be a class of limited partner interests
in the Partnership. For the avoidance of doubt, to the extent that the General
Partner holds limited partner interests of any Class, the General Partner shall
not be deemed to hold a separate Class of such interests from any other Limited
Partner because it is the General Partner.

 

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“Class A Units” means the Units of partnership interest in the Partnership
designated as the “Class A Units” herein and having the rights pertaining
thereto as are set forth in this Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Class A Common Shares” means shares of Class A Common Stock, par value $0.01,
of FSAM.

 

“Consenting Party” has the meaning set forth in Section 11.10(a).

 

“Contingencies” has the meaning set forth in Section 9.03(a).

 

“Contribution Agreement”, with respect to any Limited Partner, means the
Contribution Agreement entered into by and between the Partnership and such
Limited Partner, pursuant to which, inter alia, such Limited Partner party
thereto agreed to contribute his, her or its membership interests of Fifth
Street Management LLC to the Partnership in exchange for Class A Units.

 

“Control” (including the terms “Controlled by” and “under common Control with”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise, including, without limitation, the ownership, directly or indirectly,
of securities having the power to elect a majority of the board of directors or
similar body governing the affairs of such Person.

 

“Credit Amount” has the meaning set forth in Section 4.01(b)(ii).

 

“Creditable Non-U.S. Tax” means a non-U.S. tax paid or accrued for United States
federal income tax purposes by the Partnership, in either case to the extent
that such tax is eligible for credit under Section 901(a) of the Code. A
non-U.S. tax is a Creditable Non-U.S. Tax for these purposes without regard to
whether a partner receiving an allocation of such non-U.S. tax elects to claim a
credit for such amount. This definition is intended to be consistent with the
term “creditable foreign tax” in Treasury Regulations
Section 1.704-1(b)(4)(viii), and shall be interpreted consistently therewith.

 

“Disabling Event” means the General Partner ceasing to be the general partner of
the Partnership pursuant to Section 17-402 of the Act.

 

“Dispute” has the meaning set forth in Section 11.10(a).

 

“Dissolution Event” has the meaning set forth in Section 9.02.

 

“Encumbrance” means any mortgage, hypothecation, claim, lien, encumbrance,
conditional sales or other title retention agreement, right of first refusal,
preemptive right, pledge, option, charge, security interest or other similar
interest, easement, judgment or imperfection of title of any nature whatsoever.

 

4

 

 

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

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

 

“Exchange Agreement” means the exchange agreement dated as of or about the date
hereof among FSAM, the Partnership, the Limited Partners from time to time party
thereto, and the other parties thereto, as amended from time to time.

 

“Exchange Transaction” means an exchange of Units for Class A Common Shares
pursuant to, and in accordance with, the Exchange Agreement or, if FSAM and the
exchanging Limited Partner shall mutually agree, a Transfer of Units to FSAM,
the Partnership or any of their subsidiaries for other consideration.

 

“Final Tax Amount” has the meaning set forth in Section 4.01(b)(ii).

 

“Fiscal Year” means, unless otherwise determined by the General Partner in its
sole discretion in accordance with Section 11.12, (a) the period commencing upon
the formation of the Partnership and ending on December 31, 2014 or (b) any
subsequent twelve-month period commencing on January 1 and ending on December
31.

 

“FSAM” has the meaning set forth in the preamble of this Agreement.

 

“FSAM Controlling Shareholders” means the owners of the Class B Common Shares of
FSAM.

 

“FSAM Governing Documents” means, collectively, the Amended and Restated
Certificate of Incorporation and Bylaws of FSAM, as such documents may be
amended, supplemented or restated from time to time.

 

“FSC” means Fifth Street Finance Corp., a Delaware corporation.

 

“FSFR” means Fifth Street Senior Floating Rate Corp., a Delaware corporation.

 

“FSM LLC” means Fifth Street Management LLC, a Delaware limited liability
company.

 

“Fund” means any fund, investment vehicle or account whose investments are
managed or advised by FSAM, FSM LLC (if any) or their respective Affiliates.

 

“GAAP” means accounting principles generally accepted in the United States of
America as in effect from time to time.

 

“General Partner” means FSAM, or any successor general partner to whom FSAM may
transfer its General Partnership Interests and is admitted to the Partnership in
accordance with the terms of this Agreement.

 

5

 

 

“General Partnership Interests” means the general partnership interests held by
the General Partner which, for the avoidance of doubt, will not be entitled to
any distributions under this Agreement.

 

“Good Reason” means, with respect to any Limited Partner, the definition set
forth in their respective employment agreement with FSM LLC or an Affiliate of
FSM LLC, or, if such Limited Partner does not have such an agreement, (a) a
material diminution by FSM LLC or any Affiliate of FSM LLC of such Limited
Partner’s title, base salary or benefits without the consent of such Limited
Partner; (b) the failure of FSM LLC or any Affiliate of FSM LLC to pay to such
Limited Partner any undisputed amounts on a timely basis, after notice and a
reasonable opportunity to cure; or (c) the change of such Limited Partner’s
primary work location without the consent of such Limited Partner to a location
that is more than a 50 mile radius from the primary work location of such
Limited Partner at the time of the change.

 

“Incapacity” means, with respect to any Person, the bankruptcy, dissolution,
termination, entry of an order of incompetence, or the insanity, permanent
disability or death of such Person.

 

“Indemnitee” (a) the General Partner, (b) any additional or substitute General
Partner, (c) any Person who is or was a Tax Matters Partner, officer or director
of the General Partner or any additional or substitute General Partner, (d) any
officer or director of the Partnership or the General Partner or any additional
or substitute General Partner who is or was serving at the request of the
General Partner or any additional or substitute General Partner as an officer,
director, employee, member, partner, Tax Matters Partner, agent, fiduciary or
trustee of another Person; provided that a Person shall not be an Indemnitee by
reason of providing, on a fee-for-services basis, trustee, fiduciary or
custodial services, (e) any Person the General Partner in its sole discretion
designates as an “Indemnitee” for purposes of this Agreement and (f) any heir,
executor or administrator with respect to Persons named in clauses (a) through
(e).

 

“Law” means any statute, law, ordinance, regulation, rule, code, executive
order, injunction, judgment, decree or other order issued or promulgated by any
national, supranational, state, federal, provincial, local or municipal
government or any administrative or regulatory body with authority therefrom
with jurisdiction over the Partnership or any Partner, as the case may be.

 

“Limited Partner” means each of the Persons from time to time listed as a
limited partner in the books and records of the Partnership, and, for purposes
of Sections 8.01, 8.02, 8.03, 8.04, 8.05 and 8.06, and 8.12 any Personal
Planning Vehicle of such Limited Partner.

 

“Liquidation Agent” has the meaning set forth in Section 9.03.

 

“Net Taxable Income” has the meaning set forth in Section 4.01(b)(i).

 

“Nonrecourse Deductions” has the meaning set forth in Treasury Regulations
Section 1.704-2(b). The amount of Nonrecourse Deductions of the Partnership for
a fiscal year equals the net increase, if any, in the amount of Partnership
Minimum Gain of the Partnership during that fiscal year, determined according to
the provisions of Treasury Regulations Section 1.704-2(c).

 

6

 

 

“Officer” means each Person designated as an officer of the Partnership by the
General Partner pursuant to and in accordance with the provisions of Section
3.04, subject to any resolutions of the General Partner appointing such Person
as an officer of the Partnership or relating to such appointment.

 

“Original Agreement” has the meaning set forth in the preamble of this
Agreement.

 

“Partners” means, at any time, each person listed as a Partner (including the
General Partner) on the books and records of the Partnership, in each case for
so long as he, she or it remains a partner of the Partnership as provided
hereunder.

 

“Partnership” has the meaning set forth in the preamble of this Agreement.

 

“Partnership Minimum Gain” has the meaning set forth in Treasury Regulations
Sections 1.704-2(b)(2) and 1.704-2(d).

 

“Partner Nonrecourse Debt Minimum Gain” means an amount with respect to each
partner nonrecourse debt (as defined in Treasury Regulations Section
1.704-2(b)(4)) equal to the Partnership Minimum Gain that would result if such
partner nonrecourse debt were treated as a nonrecourse liability (as defined in
Treasury Regulations Section 1.752-1(a)(2)) determined in accordance with
Treasury Regulations Section 1.704-2(i)(3).

 

“Partner Nonrecourse Deductions” has the meaning ascribed to the term “partner
nonrecourse deductions” set forth in Treasury Regulations Section 1.704-2(i)(2).

 

“Person” means any individual, estate, corporation, partnership, limited
partnership, limited liability company, limited company, joint venture, trust,
unincorporated or governmental organization or any agency or political
subdivision thereof.

 

“Personal Planning Vehicle” means, in respect of any Person that is a natural
person, any other Person that is not a natural person designated as a “Personal
Planning Vehicle” of such natural person in the books and records of the
Partnership.

 

“Primary Indemnification” has the meaning set forth in Section 10.02(a).

 

“Profits” and “Losses” means, for each Fiscal Year or other period, the taxable
income or loss of the Partnership, or particular items thereof, determined in
accordance with the accounting method used by the Partnership for U.S. federal
income tax purposes with the following adjustments: (a) all items of income,
gain, loss or deduction allocated pursuant to Section 5.05 shall not be taken
into account in computing such taxable income or loss; (b) any income of the
Partnership that is exempt from U.S. federal income taxation and not otherwise
taken into account in computing Profits and Losses shall be added to such
taxable income or loss; (c) if the Carrying Value of any asset differs from its
adjusted tax basis for U.S. federal income tax purposes, any gain or loss
resulting from a disposition of such asset shall be calculated with reference to
such Carrying Value; (d) upon an adjustment to the Carrying Value (other than an
adjustment in respect of depreciation) of any asset, pursuant to the definition
of Carrying Value, the amount of the adjustment shall be included as gain or
loss in computing such taxable income or loss; (e) if the Carrying Value of any
asset differs from its adjusted tax basis for U.S. federal income tax purposes,
the amount of depreciation, amortization or cost recovery deductions with
respect to such asset for purposes of determining Profits and Losses, if any,
shall be an amount which bears the same ratio to such Carrying Value as the U.S.
federal income tax depreciation, amortization or other cost recovery deductions
bears to such adjusted tax basis (provided that if the U.S. federal income tax
depreciation, amortization or other cost recovery deduction is zero, the General
Partner may use any reasonable method for purposes of determining depreciation,
amortization or other cost recovery deductions in calculating Profits and
Losses); and (f) except for items in (a) above, any expenditures of the
Partnership not deductible in computing taxable income or loss, not properly
capitalizable and not otherwise taken into account in computing Profits and
Losses pursuant to this definition shall be treated as deductible items.

 

7

 

 

“Service Provider” means any Limited Partner (in his, her or its individual
capacity) or other Person, who at the time in question, is employed by or
providing services to FSAM, the Partnership or any of its subsidiaries.

 

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

 

“Similar Law” means any law or regulation that could cause the underlying assets
of the Partnership to be treated as assets of a Limited Partner by virtue of its
limited partner interest in the Partnership and thereby subject the Partnership
and the General Partner (or other persons responsible for the investment and
operation of the Partnership’s assets) to laws or regulations that are similar
to the fiduciary responsibility or prohibited transaction provisions contained
in Title I of ERISA or Section 4975 of the Code.

 

“Tax Advances” has the meaning set forth in Section 5.07.

 

“Tax Amount” has the meaning set forth in Section 4.01(b)(i).

 

“Tax Distributions” has the meaning set forth in Section 4.01(b)(i).

 

“Tax Matters Partner” has the meaning set forth in Section 5.08.

 

“Total Percentage Interest” means, with respect to any Partner, the quotient
obtained by dividing the number of Units (vested and unvested) then owned by
such Partner by the number of Units (vested and unvested) then owned by all
Partners.

 

“Transfer” means, in respect of any Unit, property or other asset, any sale,
assignment, transfer, distribution, exchange, mortgage, pledge, hypothecation or
other disposition thereof, whether voluntarily or by operation of Law, directly
or indirectly, in whole or in part, including, without limitation, the exchange
of any Unit for any other security.

 

“Transferee” means any Person that is a permitted transferee of a Partner’s
interest in the Partnership, or part thereof.

 

“Treasury Regulations” means the income tax regulations, including temporary
regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

 

8

 

 

“Units” means the Class A Units and any other Class of limited partnership
interests that is established in accordance with this Agreement, which shall
constitute limited partnership interests in the Partnership as provided in this
Agreement and under the Act, entitling the holders thereof to the relative
rights, title and interests in the profits, losses, deductions and credits of
the Partnership at any particular time as set forth in this Agreement, and any
and all other benefits to which a holder thereof may be entitled as a Partner as
provided in this Agreement, together with the obligations of such Partner to
comply with all terms and provisions of this Agreement.

 

“Unvested Units” means those Units from time to time listed as unvested Units in
the books and records of the Partnership, as the same may be amended from time
to time in accordance with this Agreement.

 

“Vested Percentage Interest” means, with respect to any Partner, the quotient
obtained by dividing the number of Vested Units then owned by such Partner by
the number of Vested Units then owned by all Partners.

 

“Vested Units” means those Units listed as vested Units in the books and records
of the Partnership, as the same may be amended from time to time in accordance
with this Agreement.

 

ARTICLE II

FORMATION, TERM, PURPOSE AND POWERS

 

SECTION 2.01       Formation. The Partnership was formed as a limited
partnership under the provisions of the Act by the filing on June 27, 2014 of
the Certificate as provided in the preamble of this Agreement and execution of
the Original Agreement. If requested by the General Partner, the Limited
Partners shall promptly execute all certificates and other documents consistent
with the terms of this Agreement necessary for the General Partner to accomplish
all filing, recording, publishing and other acts as may be appropriate to comply
with all requirements for (a) the formation and operation of a limited
partnership under the laws of the State of Delaware, (b) if the General Partner
deems it advisable, the operation of the Partnership as a limited partnership,
or partnership in which the Limited Partners have limited liability, in all
jurisdictions where the Partnership proposes to operate and (c) all other
filings required to be made by the Partnership. The rights, powers, duties,
obligations and liabilities of the Partners shall be determined pursuant to the
Act and this Agreement. To the extent that the rights, powers, duties,
obligations and liabilities of any Partner are different by reason of any
provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control. The execution
and filing of the Certificate and each amendment thereto is hereby ratified,
approved and confirmed by the Partners.

 

SECTION 2.02       Name. The name of the Partnership shall be, and the business
of the Partnership shall be conducted under the name of “Fifth Street Holdings
L.P.,” and all Partnership business shall be conducted in that name or in such
other names that comply with applicable law as the General Partner in its sole
discretion may select from time to time. Subject to the Act, the General Partner
may change the name of the Partnership (and amend this Agreement to reflect such
change) at any time and from time to time without the consent of any other
Person. Prompt notification of any such change shall be given to all Partners.

 

9

 

 

SECTION 2.03       Term. The term of the Partnership commenced on the date of
the filing of the Certificate, and the term shall continue until the dissolution
of the Partnership in accordance with Article IX. The existence of the
Partnership shall continue until cancellation of the Certificate in the manner
required by the Act.

 

SECTION 2.04       Offices. The Partnership may have offices at such places
either within or outside the State of Delaware as the General Partner from time
to time may select. As of the date hereof, the principal place of business and
office of the Partnership is located at 777 West Putnam Avenue, Greenwich,
Connecticut.

 

SECTION 2.05       Agent for Service of Process; Existence and Good Standing;
Foreign Qualification. (a) The Partnership’s registered agent and registered
office for service of process in the State of Delaware shall be as set forth in
the Certificate, as the same may be amended by the General Partner from time to
time.

 

(b)               The General Partner may take all action which may be necessary
or appropriate (i) for the continuation of the Partnership’s valid existence as
a limited partnership under the laws of the State of Delaware (and of each other
jurisdiction in which such existence is necessary to enable the Partnership to
conduct the business in which it is engaged) and (ii) for the maintenance,
preservation and operation of the business of the Partnership in accordance with
the provisions of this Agreement and applicable laws and regulations. The
General Partner may file or cause to be filed for recordation in the proper
office or offices in each other jurisdiction in which the Partnership is formed
or qualified, such certificates (including certificates of limited partnership
and fictitious name certificates) and other documents as are required by the
applicable statutes, rules or regulations of any such jurisdiction or as are
required to reflect the identity of the Partners. The General Partner may cause
the Partnership to comply, to the extent procedures are available and those
matters are reasonably within the control of the Officers, with all requirements
necessary to qualify the Partnership to do business in any jurisdiction other
than the State of Delaware.

 

SECTION 2.06       Business Purpose. The Partnership was formed for the object
and purpose of, and the nature and character of the business to be conducted by
the Partnership is, engaging in any lawful act or activity for which limited
partnerships may be formed under the Act.

 

SECTION 2.07       Powers of the Partnership. Subject to the limitations set
forth in this Agreement, the Partnership will possess and may exercise all of
the powers and privileges granted to it by the Act including, without
limitation, the ownership and operation of the assets and other property
contributed to the Partnership by the Partners, by any other Law or this
Agreement, together with all powers incidental thereto, so far as such powers
are necessary or convenient to the conduct, promotion or attainment of the
purpose of the Partnership set forth in Section 2.06.

 

SECTION 2.08       Partners; Admission of New Partners. Each of the Persons
listed in the books and records of the Partnership, as the same may be amended
from time to time in accordance with this Agreement, by virtue of the execution
of this Agreement, are admitted as Partners of the Partnership. The rights,
duties and liabilities of the Partners shall be as provided in the Act, except
as is otherwise expressly provided herein, and the Partners consent to the
variation of such rights, duties and liabilities as provided herein. Subject to
Section 8.09 with respect to substitute Limited Partners, a Person may be
admitted from time to time as a new Limited Partner with the written consent of
the General Partner in its sole discretion. Each new Limited Partner shall
execute and deliver to the General Partner an appropriate supplement to this
Agreement pursuant to which the new Limited Partner agrees to be bound by the
terms and conditions of the Agreement, as it may be amended from time to time. A
new General Partner or substitute General Partner may be admitted to the
Partnership solely in accordance with Section 8.07 or Section 9.02(e) hereof.

 

10

 

 

 

SECTION 2.09       Withdrawal. No Partner shall have the right to withdraw as a
Partner of the Partnership other than following the Transfer of all Units owned
by such Partner in accordance with Article VIII.

 

SECTION 2.10       Investment Representations of Partners. Each Partner hereby
represents, warrants and acknowledges to the Partnership that: (a) such Partner
has such knowledge and experience in financial and business matters and is
capable of evaluating the merits and risks of an investment in the Partnership
and is making an informed investment decision with respect thereto; (b) such
Partner is acquiring interests in the Partnership for investment only and not
with a view to, or for resale in connection with, any distribution to the public
or public offering thereof; and (c) the execution, delivery and performance of
this Agreement have been duly authorized by such Partner.

 

ARTICLE III

MANAGEMENT

 

SECTION 3.01       General Partner. (a) The business, property and affairs of
the Partnership shall be managed under the sole, absolute and exclusive
direction of the General Partner, which may from time to time delegate authority
to Officers or to others to act on behalf of the Partnership.

 

(b)               Without limiting the foregoing provisions of this Section
3.01, the General Partner shall have the general power to manage or cause the
management of the Partnership (which may be delegated to Officers of the
Partnership), including, without limitation, the following powers:

 

(i)                 to execute and deliver or to authorize the execution and
delivery of contracts, deeds, leases, licenses, instruments of transfer and
other documents on behalf of the Partnership;

 

(ii)               the making of any expenditures, the lending or borrowing of
money, the assumption or guarantee of, or other contracting for, indebtedness
and other liabilities, the issuance of evidences of indebtedness and the
incurring of any other obligations;

 

(iii)             to establish and enforce limits of authority and internal
controls with respect to all personnel and functions;

 

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(iv)             to engage attorneys, consultants and accountants for the
Partnership;

 

(v)               to develop or cause to be developed accounting procedures for
the maintenance of the Partnership’s books of account; and

 

(vi)             to do all such other acts as shall be authorized in this
Agreement or by the Partners in writing from time to time.

 

SECTION 3.02       Compensation. The General Partner shall not be entitled to
any compensation for services rendered to the Partnership in its capacity as
General Partner.

 

SECTION 3.03       Expenses. The Partnership shall pay, or cause to be paid, all
costs, fees, operating expenses and other expenses of the Partnership (including
the costs, fees and expenses of attorneys, accountants or other professionals)
incurred in pursuing and conducting, or otherwise related to, the activities of
the Partnership. The Partnership shall also, in the sole discretion of the
General Partner, bear and/or reimburse the General Partner for (a) any costs,
fees or expenses incurred by the General Partner in connection with serving as
the General Partner, (b) all other expenses allocable to the Partnership or
otherwise incurred by the General Partner in connection with operating the
Partnership’s business (including expenses allocated to the General Partner by
its Affiliates) and (c) all costs, fees or expenses owed directly or indirectly
by the Partnership or the General Partner to the FSAM Controlling Shareholders
pursuant to their reimbursement obligations under, or which are otherwise
allocated to the General Partner pursuant to, the FSAM Governing Documents. To
the extent that the General Partner determines in its sole discretion that such
expenses are related to the business and affairs of the General Partner that are
conducted through the Partnership and/or its subsidiaries (including expenses
that relate to the business and affairs of the Partnership and/or its
subsidiaries and that also relate to other activities of the General Partner),
the General Partner may cause the Partnership to pay or bear all expenses of the
General Partner, including, without limitation, compensation and meeting costs
of any board of directors or similar body of the General Partner, any salary,
bonus, incentive compensation and other amounts paid to any Person including
Affiliates of the General Partner to perform services for the Partnership,
litigation costs and damages arising from litigation, accounting and legal costs
and franchise taxes, provided that the Partnership shall not pay or bear any
income tax obligations of the General Partner. Reimbursements pursuant to this
Section 3.03 shall be in addition to any reimbursement to the General Partner as
a result of indemnification pursuant to Section 10.02.

 

SECTION 3.04       Officers. Subject to the direction and oversight of the
General Partner, the day-to-day administration of the business of the
Partnership may be carried out by persons who may be designated as officers by
the General Partner, with titles including but not limited to “assistant
secretary,” “assistant treasurer,” “chairman,” “chief executive officer,” “chief
financial officer,” “chief operating officer,” “chief risk officer,” “director,”
“general counsel,” “general manager,” “managing director,” “president,”
“principal accounting officer,” “secretary,” “senior chairman,” “senior managing
director,” “treasurer,” “vice chairman” or “vice president,” and as and to the
extent authorized by the General Partner. The officers of the Partnership shall
have such titles and powers and perform such duties as shall be determined from
time to time by the General Partner and otherwise as shall customarily pertain
to such offices. Any number of offices may be held by the same person. In its
sole discretion, the General Partner may choose not to fill any office for any
period as it may deem advisable. All officers and other persons providing
services to or for the benefit of the Partnership shall be subject to the
supervision and direction of the General Partner and may be removed, with or
without cause, from such office by the General Partner and the authority, duties
or responsibilities of any employee, agent or officer of the Partnership may be
suspended by the General Partner from time to time, in each case in the sole
discretion of the General Partner. The General Partner shall not cease to be a
general partner of the Partnership as a result of the delegation of any duties
hereunder. No officer of the Partnership, in its capacity as such, shall be
considered a general partner of the Partnership by agreement, as a result of the
performance of its duties hereunder or otherwise.

 

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SECTION 3.05       Authority of Partners. No Limited Partner, in its capacity as
such, shall participate in or have any control over the business of the
Partnership. Except as expressly provided herein, the Units do not confer any
rights upon the Limited Partners to participate in the affairs of the
Partnership described in this Agreement. Except as expressly provided herein, no
Limited Partner shall have any right to vote on any matter involving the
Partnership, including with respect to any merger, consolidation, combination or
conversion of the Partnership, or any other matter that a limited partner might
otherwise have the ability to vote on or consent with respect to under the Act,
at law, in equity or otherwise. The conduct, control and management of the
Partnership shall be vested exclusively in the General Partner. In all matters
relating to or arising out of the conduct of the operation of the Partnership,
the decision of the General Partner shall be the decision of the Partnership.
Except as required or permitted by Law, or expressly provided in the ultimate
sentence of this Section 3.05 or by separate agreement with the Partnership, no
Partner who is not also a General Partner (and acting in such capacity) shall
take any part in the management or control of the operation or business of the
Partnership in its capacity as a Partner, nor shall any Partner who is not also
a General Partner (and acting in such capacity) have any right, authority or
power to act for or on behalf of or bind the Partnership in his or its capacity
as a Partner in any respect or assume any obligation or responsibility of the
Partnership or of any other Partner. Notwithstanding the foregoing, the
Partnership may from time to time appoint one or more Partners as officers or
employ one or more Partners as employees, and such Partners, in their capacity
as Officers or employees of the Partnership (and not, for clarity, in their
capacity as Limited Partners of the Partnership), may take part in the control
and management of the business of the Partnership to the extent such authority
and power to act for or on behalf of the Partnership has been delegated to them
by the General Partner.

 

SECTION 3.06       Action by Written Consent or Ratification. Any action
required or permitted to be taken by the Partners pursuant to this Agreement
shall be taken if all Partners whose consent or ratification is required consent
thereto or provide a consent or ratification in writing.

 

ARTICLE IV

DISTRIBUTIONS

 

SECTION 4.01       Distributions. (a) The General Partner, in its sole
discretion, may authorize distributions by the Partnership to the Partners,
which distributions shall be made pro rata in accordance with the Partners’
respective Total Percentage Interests. For the avoidance of doubt, no Partner
who does not hold Units shall be entitled to receive distributions under this
Agreement.

 

13

 

 

(b)               (i) In addition to the foregoing, if the General Partner
reasonably determines that the taxable income of the Partnership for a Fiscal
Year will give rise to taxable income for the Partners (“Net Taxable Income”),
the General Partner shall cause the Partnership to distribute Available Cash in
respect of income tax liabilities (the “Tax Distributions”) to the extent that
other distributions made by the Partnership for such year were otherwise
insufficient to cover such tax liabilities. The Tax Distributions payable with
respect to any Fiscal Year shall be computed based upon the General Partner’s
estimate of the allocable Net Taxable Income in accordance with Article V,
multiplied by the Assumed Tax Rate (the “Tax Amount”). For purposes of computing
the Tax Amount, the effect of any benefit under Section 743(b) of the Code will
be ignored.

 

(ii)               Tax Distributions shall be calculated and paid no later than
ten days prior to each quarterly due date for the payment by corporations on a
calendar year of estimated taxes under the Code in the following manner (A) for
the first quarterly period, 25% of the Tax Amount, (B) for the second quarterly
period, 50% of the Tax Amount, less the prior Tax Distributions for the Fiscal
Year, (C) for the third quarterly period, 75% of the Tax Amount, less the prior
Tax Distributions for the Fiscal Year and (D) for the fourth quarterly period,
100% of the Tax Amount, less the prior Tax Distributions for the Fiscal Year.
Following each Fiscal Year, and no later than ten days prior to the due date for
the payment by corporations of income taxes for such Fiscal Year, the General
Partner shall make an amended calculation of the Tax Amount for such Fiscal Year
(the “Amended Tax Amount”), and shall cause the Partnership to distribute a Tax
Distribution, out of Available Cash, to the extent that the Amended Tax Amount
so calculated exceeds the cumulative Tax Distributions previously made by the
Partnership in respect of such Fiscal Year. If the Amended Tax Amount is less
than the cumulative Tax Distributions previously made by the Partnership in
respect of the relevant Fiscal Year, then the difference (the “Credit Amount”)
shall be applied against, and shall reduce, the amount of Tax Distributions made
for subsequent Fiscal Years. Within 30 days following the date on which the
Partnership files a tax return on Form 1065, the General Partner shall make a
final calculation of the Tax Amount of such Fiscal Year (the “Final Tax Amount”)
and shall cause the Partnership to distribute a Tax Distribution, out of
Available Cash, to the extent that the Final Tax Amount so calculated exceeds
the Amended Tax Amount. If the Final Tax Amount is less than the Amended Tax
Amount in respect of the relevant Fiscal Year, then the difference (“Additional
Credit Amount”) shall be applied against, and shall reduce, the amount of Tax
Distributions made for subsequent Fiscal Years. Any Credit Amount and Additional
Credit Amount applied against future Tax Distributions shall be treated as an
amount actually distributed pursuant to this Section 4.01(b) for purposes of the
computations herein.

 

SECTION 4.02       Liquidation Distribution. Distributions made upon dissolution
of the Partnership shall be made as provided in Section 9.03.

 

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SECTION 4.03       Limitations on Distribution. Notwithstanding any provision to
the contrary contained in this Agreement, the General Partner shall not make a
Partnership distribution to any Partner if such distribution would violate
Section 17-607 of the Act or other applicable Law.

 

ARTICLE V

CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS;
TAX ALLOCATIONS; TAX MATTERS

 

SECTION 5.01       Initial Capital Contributions. The Partners have made, on or
prior to the date hereof, Capital Contributions and, in exchange, the
Partnership has issued to the Partners the number of Class A Units as specified
in the books and records of the Partnership.

 

SECTION 5.02       No Additional Capital Contributions. Except as otherwise
provided in this Article V, no Partner shall be required to make additional
Capital Contributions to the Partnership without the consent of such Partner or
permitted to make additional capital contributions to the Partnership without
the consent of the General Partner.

 

SECTION 5.03       Capital Accounts. A separate capital account (a “Capital
Account”) shall be established and maintained for each Partner in accordance
with the provisions of Treasury Regulations Section 1.704-1(b)(2)(iv). The
Capital Account of each Partner shall be credited with such Partner’s Capital
Contributions, if any, all Profits allocated to such Partner pursuant to Section
5.04 and any items of income or gain which are specially allocated pursuant to
Section 5.05; and shall be debited with all Losses allocated to such Partner
pursuant to Section 5.04, any items of loss or deduction of the Partnership
specially allocated to such Partner pursuant to Section 5.05, and all cash and
the Carrying Value of any property (net of liabilities assumed by such Partner
and the liabilities to which such property is subject) distributed by the
Partnership to such Partner. Any references in any section of this Agreement to
the Capital Account of a Partner shall be deemed to refer to such Capital
Account as the same may be credited or debited from time to time as set forth
above. In the event of any transfer of any interest in the Partnership in
accordance with the terms of this Agreement, the Transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred
interest.

 

SECTION 5.04       Allocations of Profits and Losses. Except as otherwise
provided in this Agreement, Profits and Losses (and, to the extent necessary,
individual items of income, gain or loss or deduction of the Partnership) shall
be allocated pro rata to each of the holders of Units in accordance with their
Total Percentage Interests. For purposes of this Article V, each Unvested Unit
shall be treated as a Vested Unit. Notwithstanding the foregoing, the General
Partner shall make such adjustments to Capital Accounts as it determines in its
sole discretion to be appropriate to ensure allocations are made in accordance
with a partner’s interest in the Partnership.

 

SECTION 5.05       Special Allocations. Notwithstanding any other provision in
this Article V:

 

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(a)                Minimum Gain Chargeback. If there is a net decrease in
Partnership Minimum Gain or Partner Nonrecourse Debt Minimum Gain (determined in
accordance with the principles of Treasury Regulations Sections 1.704-2(d) and
1.704-2(i)) during any Partnership taxable year, the Partners shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to their respective shares of such net
decrease during such year, determined pursuant to Treasury Regulations
Sections 1.704-2(g) and 1.704-2(i) (5). The items to be so allocated shall be
determined in accordance with Treasury Regulations Section 1.704-2(f). This
Section 5.05(a) is intended to comply with the minimum gain chargeback
requirements in such Treasury Regulations Sections and shall be interpreted
consistently therewith; including that no chargeback shall be required to the
extent of the exceptions provided in Treasury Regulations Sections 1.704-2(f)
and 1.704-2(i) (4).

 

(b)               Qualified Income Offset. If any Partner unexpectedly receives
any adjustments, allocations, or distributions described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and
gain shall be specially allocated to such Partner in an amount and manner
sufficient to eliminate the deficit balance in such Partner’s Adjusted Capital
Account Balance created by such adjustments, allocations or distributions as
promptly as possible; provided that an allocation pursuant to this Section
5.05(b) shall be made only to the extent that a Partner would have a deficit
Adjusted Capital Account Balance in excess of such sum after all other
allocations provided for in this Article V have been tentatively made as if this
Section 5.05(b) were not in this Agreement. This Section 5.05(b) is intended to
comply with the “qualified income offset” requirement of the Code and shall be
interpreted consistently therewith.

 

(c)                Gross Income Allocation. If any Partner has a deficit Capital
Account at the end of any Fiscal Year which is in excess of the sum of (i) the
amount such Partner is obligated to restore, if any, pursuant to any provision
of this Agreement, and (ii) the amount such Partner is deemed to be obligated to
restore pursuant to the penultimate sentences of Treasury Regulations Section
1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be specially allocated
items of Partnership income and gain in the amount of such excess as quickly as
possible; provided that an allocation pursuant to this Section 5.05(c) shall be
made only if and to the extent that a Partner would have a deficit Capital
Account in excess of such sum after all other allocations provided for in this
Article V have been tentatively made as if Section 5.05(b) and this Section
5.05(c) were not in this Agreement.

 

(d)               Nonrecourse Deductions. Nonrecourse Deductions shall be
allocated to the Partners in accordance with their respective Total Percentage
Interests.

 

(e)                Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any taxable period shall be allocated to the Partner who bears
the economic risk of loss with respect to the liability to which such Partner
Nonrecourse Deductions are attributable in accordance with Treasury Regulations
Section 1.704-2(j).

 

(f)                Creditable Non-U.S. Taxes. Creditable Non-U.S. Taxes for any
taxable period attributable to the Partnership, or an entity owned directly or
indirectly by the Partnership, shall be allocated to the Partners in proportion
to the partners’ distributive shares of income (including income allocated
pursuant to Section 704(c) of the Code) to which the Creditable Non-U.S. Tax
relates (under principles of Treasury Regulations Section 1.904-6). The
provisions of this Section 5.05(f) are intended to comply with the provisions of
Treasury Regulations Section 1.704-1(b)(4) (viii), and shall be interpreted
consistently therewith.

 

16

 

 

(g)               Ameliorative Allocations. Any special allocations of income or
gain pursuant to Sections 5.05(b) or 5.05(c) hereof shall be taken into account
in computing subsequent allocations pursuant to Section 5.04 and this Section
5.05(g), so that the net amount of any items so allocated and all other items
allocated to each Partner shall, to the extent possible, be equal to the net
amount that would have been allocated to each Partner if such allocations
pursuant to Sections 5.05(b) or 5.05(c) had not occurred.

 

SECTION 5.06       Tax Allocations. For income tax purposes, each item of
income, gain, loss and deduction of the Partnership shall be allocated among the
Partners in the same manner as the corresponding items of Profits and Losses and
specially allocated items are allocated for Capital Account purposes; provided
that in the case of any asset the Carrying Value of which differs from its
adjusted tax basis for U.S. federal income tax purposes, income, gain, loss and
deduction with respect to such asset shall be allocated solely for income tax
purposes in accordance with the principles of Sections 704(b) and (c) of the
Code (in any manner determined by the General Partner and permitted by the Code
and Treasury Regulations) so as to take account of the difference between
Carrying Value and adjusted basis of such asset; provided further that the
Partnership shall use the traditional method with curative allocations (as
provided in Treasury Regulations Section 1.704-3(c)) for all Section 704(c)
allocations, limited to allocations of income or gain from the disposition of
Partnership property where allocations of depreciation deductions have been
limited by the ceiling rule throughout the term of the Partnership).
Notwithstanding the foregoing, the General Partner shall make such allocations
for tax purposes as it determines in its sole discretion to be appropriate to
ensure allocations are made in accordance with a partner’s interest in the
Partnership.

 

SECTION 5.07       Tax Advances. To the extent the General Partner reasonably
believes that the Partnership is required by law to withhold or to make tax
payments on behalf of or with respect to any Partner or the Partnership is
subjected to tax itself by reason of the status of any Partner (“Tax Advances”),
the General Partner may withhold such amounts and make such tax payments as so
required. All Tax Advances made on behalf of a Partner shall be repaid by
reducing the amount of the current or next succeeding distribution or
distributions which would otherwise have been made to such Partner or, if such
distributions are not sufficient for that purpose, by so reducing the proceeds
of liquidation otherwise payable to such Partner. For all purposes of this
Agreement such Partner shall be treated as having received the amount of the
distribution that is equal to the Tax Advance. Each Partner hereby agrees to
furnish to the Partnership such information and forms as required in order to
comply with any laws and regulations governing withholding of tax or in order to
claim any reduced rate of, or exemption from, withholding to which the Partner
is legally entitled. Each Partner hereby agrees to indemnify and hold harmless
the Partnership and the other Partners from and against any liability including,
without limitation, any liability for taxes, penalties, additions to tax or
interest (other than any penalties, additions to tax or interest (i) imposed as
a result of the Partnership’s failure to withhold or make a tax payment on
behalf of such Partner which withholding or payment is required pursuant to
applicable Law, and (ii) to the extent amounts sufficient to pay such taxes were
not timely distributed to the Partner pursuant to Section 4.01(b)) with respect
to income attributable to or distributions or other payments to such Partner.

 

17

 

 

SECTION 5.08       Tax Matters. The General Partner shall be the initial “tax
matters partner” within the meaning of Section 6231(a)(7) of the Code (the “Tax
Matters Partner”). The Partnership shall file as a partnership for federal,
state, provincial and local income tax purposes, except where otherwise required
by Law. All elections required or permitted to be made by the Partnership, and
all other tax decisions and determinations relating to federal, state,
provincial or local tax matters of the Partnership, shall be made by the Tax
Matters Partner, in consultation with the Partnership’s attorneys and/or
accountants. Tax audits, controversies and litigations shall be conducted under
the direction of the Tax Matters Partner. The Tax Matters Partner shall keep the
other Partners reasonably informed as to any tax actions, examinations or
proceedings relating to the Partnership and shall submit to the other Partners,
for their review and comment, any settlement or compromise offer with respect to
any disputed item of income, gain, loss, deduction or credit of the Partnership.
As soon as reasonably practicable after the end of each Fiscal Year, the
Partnership shall send to each Partner a copy of U.S. Internal Revenue Service
Schedule K-1, and any comparable statements required by applicable U.S. state or
local income tax Law as a result of the Partnership’s activities or investments,
with respect to such Fiscal Year. The Partnership also shall provide the
Partners with such other information as may be reasonably requested for purposes
of allowing the Partners to prepare and file their own tax returns.

 

SECTION 5.09       Other Allocation Provisions. Certain of the foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulations
Section 1.704-1(b) and shall be interpreted and applied in a manner consistent
with such regulations. In addition to amendments effected in accordance with
Section 11.12 or otherwise in accordance with this Agreement, Sections 5.03,
5.04 and 5.05 may also, so long as any such amendment does not materially change
the relative economic interests of the Partners, be amended at any time by the
General Partner if necessary, in the opinion of tax counsel to the Partnership,
to comply with such regulations or any applicable Law.

 

SECTION 5.10       Section 754 Election. The Tax Matters Partner shall cause the
Partnership to make an election under Section 754 of the Code and for such
election to be in effect for the first taxable year of the existence of the
Partnership and each taxable year in which a Limited Partner Transfers Units.

 

ARTICLE VI

BOOKS AND RECORDS; REPORTS

 

SECTION 6.01       Books and Records. (a) At all times during the continuance of
the Partnership, the Partnership shall prepare and maintain separate books of
account for the Partnership in accordance with GAAP.

 

(b)               Except as limited by Section 6.01(c), each Limited Partner
shall have the right to receive, for a purpose reasonably related to such
Limited Partner’s interest as a Limited Partner in the Partnership, upon
reasonable written demand stating the purpose of such demand and at such Limited
Partner’s own expense:

 

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(i)                 a copy of the Certificate and this Agreement and all
amendments thereto, together with a copy of the executed copies of all powers of
attorney pursuant to which the Certificate and this Agreement and all amendments
thereto have been executed; and

 

(ii)               promptly after their becoming available, copies of the
Partnership’s federal income tax returns for the three most recent years.

 

(c)                The General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines in its sole
discretion, (i) any information that the General Partner reasonably believes to
be in the nature of trade secrets or (ii) other information the disclosure of
which the General Partner believes is not in the best interests of the
Partnership, could damage the Partnership or its business or that the
Partnership is required by law or by agreement with any third party to keep
confidential.

 

ARTICLE VII

PARTNERSHIP UNITS

 

SECTION 7.01       Units. Limited partnership interests in the Partnership shall
be represented by Units. General partnership interests in the Partnership shall
be represented by General Partnership Interests. The Units initially are
comprised of one Class: “Class A Units”. Subject to Section 7.04, the General
Partner in its sole discretion may establish and issue, from time to time in
accordance with such procedures as the General Partner shall determine from time
to time, additional Units, in one or more Classes or series of Units, or other
Partnership securities, at such price, and with such designations, preferences
and relative, participating, optional or other special rights, powers and duties
(which may be senior to existing Units, Classes and series of Units or other
Partnership securities), as shall be determined by the General Partner without
the approval of any Partner or any other Person who may acquire an interest in
any of the Units, including (a) the right of such Units to share in Profits and
Losses or items thereof; (b) the right of such Units to share in Partnership
distributions; (c) the rights of such Units upon dissolution and liquidation of
the Partnership; (d) whether, and the terms and conditions upon which, the
Partnership may or shall be required to redeem such Units (including sinking
fund provisions); (e) whether such Units are issued with the privilege of
conversion or exchange and, if so, the terms and conditions of such conversion
or exchange; (f) the terms and conditions upon which such Units will be issued,
evidenced by certificates and assigned or transferred; (g) the method for
determining the Total Percentage Interest as to such Units; (h) the terms and
conditions of the issuance of such Units (including, without limitation, the
amount and form of consideration, if any, to be received by the Partnership in
respect thereof, the General Partner being expressly authorized, in its sole
discretion, to cause the Partnership to issue such Units for less than fair
market value); and (i) the right, if any, of the holder of such Units to vote on
Partnership matters, including matters relating to the relative designations,
preferences, rights, powers and duties of such Units. Subject to Section 7.04,
the General Partner in its sole discretion, without the approval of any Partner
or any other Person, is authorized (i) to issue Units or other Partnership
securities of any newly established Class or any existing Class to Partners or
other Persons who may acquire an interest in the Partnership and (ii) to amend
this Agreement to reflect the creation of any such new Class, the issuance of
Units or other Partnership securities of such Class, and the admission of any
Person as a Partner which has received Units or other Partnership securities.
All Units of a particular Class shall have identical rights in all respects as
all other Units of such Class, except in each case as otherwise specified in
this Agreement.

 

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SECTION 7.02       Register. The register of the Partnership shall be the
definitive record of ownership of each Unit and all relevant information with
respect to each Partner. Unless the General Partner shall determine otherwise,
Units shall be uncertificated and recorded in the books and records of the
Partnership.

 

SECTION 7.03       Registered Partners. The Partnership shall be entitled to
recognize the exclusive right of a Person registered on its records as the owner
of Units for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in Units on the part of any other Person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the Act or other applicable Law.

 

SECTION 7.04                      Preemptive Rights.

 

(a)                In the event the General Partner intends to issue any Units
or equity securities (including debt that is by its terms convertible into Units
or equity securities) (the “New Securities”), the Partnership shall not issue or
sell, agree to issue or sell, or reserve or set aside for issuance or sale, any
such New Securities unless and until it first offers to sell such New Securities
to each Limited Partner (for purposes of this Section 7.04, the “Offerees”) on
the terms set forth in this Section 7.04 (the “Preemptive Offer”). Each Offeree
will have a preemptive right to purchase up to such Offeree’s proportionate
number of such New Securities in accordance with the provisions of this Section
7.04. For purposes of this Section 7.04, “proportionate number” means the
product of (i) the number of New Securities of a particular Class (or Series of
a Class) proposed to be issued, and (ii) a percentage determined by dividing (x)
the number of Units held by such Limited Partner, by (y) the total number of
Units held by all Offerees exercising their rights hereunder. The General
Partner will determine the value of the New Securities in good faith by
considering all appropriate factors.

 

(b)               The Partnership will deliver to each Offeree written notice of
each Preemptive Offer, specifying the price and terms and conditions of such
Preemptive Offer, the number of New Securities proposed to be sold by the
Partnership pursuant to such Preemptive Offer, and each Offeree’s proportionate
number of New Securities offered by such Preemptive Offer. Each Preemptive Offer
by its terms will remain open and irrevocable for a period of thirty (30) days
from the date such notice is given (the “Offer Period”).

 

(c)                If an Offeree desires to purchase New Securities pursuant to
a Preemptive Offer, such Offeree will evidence his, her or its intention to
accept such Preemptive Offer by delivering a written notice to the Partnership,
no later than the end of the Offer Period, setting forth the number of the New
Securities (not exceeding such Offeree’s proportionate number of New Securities
for such Preemptive Offer) that such Offeree elects to purchase (the “Notice of
Acceptance”). If the Partnership does not receive a timely Notice of Acceptance
from an Offeree, such Offeree will be deemed to have irrevocably determined not
to exercise its right to acquire any of the New Securities subject to such
Preemptive Offer. If an Offeree does provide a timely Notice of Acceptance, then
the Partnership will be obligated to sell to such Offeree, and such Offeree will
be obligated to purchase from the Partnership, the number of New Securities set
forth in its Notice of Acceptance. If any Member Offeree fails to deliver a
timely Notice of Acceptance to the Partnership, the Partnership shall have one
hundred twenty (120) days thereafter to sell the New Securities as to which the
Offerees’ rights hereunder were not exercised, at a price and upon terms no more
favorable to the purchasers thereof than those specified in the notice of such
Preemptive Offer. In the event the Partnership has not sold such New Securities
within said one hundred twenty (120)-day period, the Partnership shall not
thereafter issue or sell any New Securities without first offering such New
Securities to the Offerees in the manner provided above.

 

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(d)               The provisions of this Section 7.04 shall apply, mutatis
mutandis, to an issuance by a subsidiary of the Partnership to any Person other
than the Partnership or another subsidiary of the Partnership that would
constitute New Securities if issued by the Partnership.

 

ARTICLE VIII

VESTING; FORFEITURE OF INTERESTS; TRANSFER RESTRICTIONS

 

SECTION 8.01       Vesting of Unvested Units. (a) Unvested Units shall vest and
shall thereafter be Vested Units for all purposes of this Agreement as provided
in the Contribution Agreement or otherwise as agreed to in writing between the
General Partner and the applicable Limited Partner and reflected in the books
and records of the Partnership.

 

(b)               The General Partner in its sole discretion may authorize the
earlier vesting of all or a portion of Unvested Units owned by any one or more
Limited Partners at any time and from time to time, and in such event, such
Unvested Units shall vest and thereafter be Vested Units for all purposes of
this Agreement. Any such determination in the General Partner’s discretion in
respect of Unvested Units shall be final and binding. Such determinations need
not be uniform and may be made selectively among Limited Partners, whether or
not such Limited Partners are similarly situated, and shall not constitute the
breach of any duty hereunder or otherwise existing at law, in equity or
otherwise.

 

(c)                Upon the vesting of any Unvested Units in accordance with
this Section 8.01, the General Partner shall modify the books and records of the
Partnership to reflect such vesting.

 

SECTION 8.02       Limited Partner Transfers. (a) Except (i) as otherwise agreed
to in writing between the General Partner and the applicable Limited Partner and
reflected in the books and records of the Partnership and (ii) with respect to
Exchange Transactions and other Transfers to FSAM pursuant to the Exchange
Agreement or Contribution Agreement, no Limited Partner or Assignee thereof may
Transfer (including pursuant to an Exchange Transaction) all or any portion of
its Units or other interest in the Partnership (or beneficial interest therein)
without the prior consent of the General Partner, which consent may be given or
withheld, or made subject to such conditions (including, without limitation, the
receipt of such legal opinions and other documents that the General Partner may
require) as are determined by the General Partner, in each case in the General
Partner’s sole discretion, and which consent may be in the form of a plan or
program entered into or approved by the General Partner, in its sole discretion.
Any such determination in the General Partner’s discretion in respect of Units
shall be final and binding. Such determinations need not be uniform and may be
made selectively among Limited Partners, whether or not such Limited Partners
are similarly situated, and shall not constitute the breach of any duty
hereunder or otherwise existing at law, in equity or otherwise. Any purported
Transfer of Units that is not in accordance with, or subsequently violates, this
Agreement shall be, to the fullest extent permitted by law, null and void.

 

21

 

 

(b)               Notwithstanding anything otherwise to the contrary in this
Section 8.02, each Limited Partner may Transfer Units in Exchange Transactions
pursuant to, and in accordance with, the Exchange Agreement; provided that such
Exchange Transactions shall be effected in compliance with policies that the
General Partner may adopt or promulgate from time to time (including policies
requiring the use of designated administrators or brokers).

 

(c)                Notwithstanding anything otherwise to the contrary in this
Section 8.02, a Limited Partner or a Personal Planning Vehicle of a Limited
Partner may Transfer Units: (i) to the donor thereof; (ii) if the Personal
Planning Vehicle is a grantor retained annuity trust and the trustee(s) of such
grantor retained annuity trust is obligated to make one or more distributions to
the donor of the grantor retained annuity trust, the estate of the donor of the
grantor retained annuity trust, the spouse of the donor of the grantor retained
annuity trust or the estate of the spouse of the donor of the grantor retained
annuity trust, to any such Persons; or (iii) upon the death of such Limited
Partner, to the spouse of such Limited Partner or a trust for which a deduction
under Section 2056 or 2056A (or any successor provisions) of the Code may be
sought.

 

SECTION 8.03       Mandatory Exchanges. The General Partner may in its sole
discretion at any time and from time to time, without the consent of any Limited
Partner or other Person, cause to be Transferred in an Exchange Transaction any
and all Units, except for Units held by any Person that is a Service Provider at
the time in question and/or in which a Person that is a Service Provider at the
time in question has an indirect interest as set forth in the books and records
of the Partnership. Any such determinations by the General Partner need not be
uniform and may be made selectively among Limited Partners, whether or not such
Limited Partners are similarly situated. In addition, the General Partner may,
with the consent of Partners whose Vested Percentage Interests exceed 75% of the
Vested Percentage Interests of all Partners in the aggregate, require all
Limited Partners to Transfer in an Exchange Transaction all Units held by them.

 

SECTION 8.04       Encumbrances. No Limited Partner or Assignee may create an
Encumbrance with respect to all or any portion of its Units (or any beneficial
interest therein) other than Encumbrances that run in favor of the Limited
Partner unless the General Partner consents in writing thereto, which consent
may be given or withheld, or made subject to such conditions as are determined
by the General Partner, in the General Partner’s sole discretion. Consent of the
General Partner shall be withheld until the holder of the Encumbrance
acknowledges the terms and conditions of this Agreement. Any purported
Encumbrance that is not in accordance with this Agreement shall be, to the
fullest extent permitted by law, null and void.

 

22

 

 

SECTION 8.05       Further Restrictions. (a) Notwithstanding any contrary
provision in this Agreement, the General Partner may impose such vesting
requirements, forfeiture provisions, Transfer restrictions, minimum retained
ownership requirements or other similar provisions with respect to any Units
that are outstanding as of the date of this Agreement or are created thereafter,
with the written consent of the holder of such Units. Such requirements,
provisions and restrictions need not be uniform and may be waived or released by
the General Partner in its sole discretion with respect to all or a portion of
the Units owned by any one or more Limited Partners at any time and from time to
time, and shall not constitute the breach of any duty hereunder or otherwise
existing at law, in equity or otherwise.

 

(b)               Notwithstanding any contrary provision in this Agreement, in
no event may any Transfer of a Unit be made by any Limited Partner or Assignee
if:

 

(i)                 such Transfer is made to any Person who lacks the legal
right, power or capacity to own such Unit;

 

(ii)               such Transfer would require the registration of such
transferred Unit or of any Class of Unit pursuant to any applicable United
States federal or state securities laws (including, without limitation, the
Securities Act or the Exchange Act) or other non-U.S. securities laws (including
Canadian provincial or territorial securities laws) or would constitute a
non-exempt distribution pursuant to applicable provincial or state securities
laws;

 

(iii)             such Transfer would cause (i) all or any portion of the assets
of the Partnership to (A) constitute “plan assets” (under ERISA, the Code or any
applicable Similar Law) of any existing or contemplated Limited Partner, or (B)
be subject to the provisions of ERISA, Section 4975 of the Code or any
applicable Similar Law, or (ii) the General Partner to become a fiduciary with
respect to any existing or contemplated Limited Partner, pursuant to ERISA, any
applicable Similar Law, or otherwise;

 

(iv)             to the extent requested by the General Partner, the Partnership
does not receive such legal and/or tax opinions and written instruments
(including, without limitation, copies of any instruments of Transfer and such
Assignee’s consent to be bound by this Agreement as an Assignee) that are in a
form satisfactory to the General Partner, as determined in the General Partner’s
sole discretion; or

 

(v)               the General Partner shall determine in its sole discretion
that such Transfer would pose a material risk that the Partnership would be a
“publicly traded partnership” as defined in Section 7704 of the Code.

 

In addition, notwithstanding any contrary provision in this Agreement, to the
extent the General Partner shall determine that interests in the Partnership do
not meet the requirements of Treasury Regulation section 1.7704-1(h), the
General Partner may impose such restrictions on the Transfer of Units or other
interests in the Partnership as the General Partner may determine in its sole
discretion to be necessary or advisable so that the Partnership is not treated
as a publicly traded partnership taxable as a corporation under Section 7704 of
the Code.

 

23

 

 

(c)                Any Transfer in violation of this Article VIII shall be
deemed null and void ab initio and of no effect.

 

SECTION 8.06       Rights of Assignees. The Transferee of any permitted Transfer
pursuant to this Article VIII will be an assignee only (“Assignee”), and only
will receive, to the extent transferred, the distributions and allocations of
income, gain, loss, deduction, credit or similar item to which the Partner which
transferred its Units would be entitled, and such Assignee will not be entitled
or enabled to exercise any other rights or powers of a Partner, such other
rights, and all obligations relating to, or in connection with, such interest
remaining with the transferring Partner. The transferring Partner will remain a
Partner even if it has transferred all of its Units to one or more Assignees
until such time as the Assignee(s) is admitted to the Partnership as a Partner
pursuant to Section 8.08.

 

SECTION 8.07       Admissions, Withdrawals and Removals. (a) No Person may be
admitted to the Partnership as an additional General Partner or substitute
General Partner without the prior written consent of each incumbent General
Partner, which consent may be given or withheld, or made subject to such
conditions as are determined by each incumbent General Partner, in each case in
the sole discretion of each incumbent General Partner. A General Partner will
not be entitled to withdraw from being a General Partner of the Partnership
unless another General Partner shall have been admitted hereunder (and not have
previously been removed or withdrawn).

 

(b)               No Limited Partner will be removed or entitled to withdraw
from being a Partner of the Partnership except in accordance with Section 8.09
hereof. Any additional General Partner or substitute General Partner admitted as
a general partner of the Partnership pursuant to this Section 8.08 is hereby
authorized to, and shall, continue the Partnership without dissolution.

 

(c)                Except as otherwise provided in Article IX or the Act, no
admission, substitution, withdrawal or removal of a Partner will cause the
dissolution of the Partnership. To the fullest extent permitted by law, any
purported admission, withdrawal or removal that is not in accordance with this
Agreement shall be null and void.

 

SECTION 8.08       Admission of Assignees as Substitute Limited Partners. An
Assignee will become a substitute Limited Partner only if and when each of the
following conditions is satisfied:

 

(a)                if required under Section 8.02, the General Partner consents
in writing to such admission, which consent may be given or withheld, or made
subject to such conditions as are determined by the General Partner, in each
case in the General Partner’s sole discretion;

 

(b)               if required by the General Partner, the General Partner
receives written instruments (including, without limitation, copies of any
instruments of Transfer and such Assignee’s consent to be bound by this
Agreement as a substitute Limited Partner) that are in a form satisfactory to
the General Partner (as determined in its sole discretion);

 

24

 

 

(c)                if required by the General Partner, the General Partner
receives an opinion of counsel satisfactory to the General Partner to the effect
that such Transfer is in compliance with this Agreement and all applicable Law;
and

 

(d)               if required by the General Partner, the parties to the
Transfer, or any one of them, pays all of the Partnership’s reasonable expenses
connected with such Transfer (including, but not limited to, the reasonable
legal and accounting fees of the Partnership).

 

SECTION 8.09       Withdrawal and Removal of Limited Partners. Subject to
Section 8.06, if a Limited Partner ceases to hold any Units, including as a
result of a forfeiture of Units, then such Limited Partner shall cease to be a
Limited Partner and to have the power to exercise any rights or powers of a
Limited Partner, and shall be deemed to have withdrawn from the Partnership.

 

ARTICLE IX

DISSOLUTION, LIQUIDATION AND TERMINATION

 

SECTION 9.01       No Dissolution. Except as required by the Act, the
Partnership shall not be dissolved by the admission of additional Partners or
withdrawal of Partners in accordance with the terms of this Agreement. The
Partnership may be dissolved, liquidated, wound up and terminated only pursuant
to the provisions of this Article IX, and the Partners hereby irrevocably waive
any and all other rights they may have to cause a dissolution of the Partnership
or a sale or partition of any or all of the Partnership assets.

 

SECTION 9.02       Events Causing Dissolution. The Partnership shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events (each, a “Dissolution Event”):

 

(a)                the entry of a decree of judicial dissolution of the
Partnership under Section 17-802 of the Act upon the finding by a court of
competent jurisdiction that it is not reasonably practicable to carry on the
business of the Partnership in conformity with this Agreement;

 

(b)               any event which makes it unlawful for the business of the
Partnership to be carried on by the Partners;

 

(c)                the written consent of all Partners;

 

(d)               at any time there are no limited partners, unless the
Partnership is continued in accordance with the Act;

 

(e)                the Incapacity or removal of the General Partner or the
occurrence of a Disabling Event with respect to the General Partner; provided
that the Partnership will not be dissolved or required to be wound up in
connection with any of the events specified in this Section 9.02(e) if: (i) at
the time of the occurrence of such event there is at least one other general
partner of the Partnership who is hereby authorized to, and elects to, carry on
the business of the Partnership; or (ii) all remaining Limited Partners consent
to or ratify the continuation of the business of the Partnership and the
appointment of another general partner of the Partnership, effective as of the
event that caused the General Partner to cease to be a general partner of the
Partnership, within 120 days following the occurrence of any such event, which
consent shall be deemed (and if requested each Limited Partner shall provide a
written consent or ratification) to have been given for all Limited Partners if
the holders of more than 50% of the Vested Units then outstanding agree in
writing to so continue the business of the Partnership; or

 

25

 

 

(f)                the determination of the General Partner in its sole
discretion; provided that in the event of a dissolution pursuant to this clause
(f), the relative economic rights of each Class of Units immediately prior to
such dissolution shall be preserved to the greatest extent practicable with
respect to distributions made to Partners pursuant to Section 9.03 below in
connection with the winding up of the Partnership, taking into consideration tax
and other legal constraints that may adversely affect one or more parties hereto
and subject to compliance with applicable laws and regulations, unless, and to
the extent that, with respect to any Class of Units, holders of not less than
90% of the Units of such Class consent in writing to a treatment other than as
described above.

 

SECTION 9.03       Distribution upon Dissolution. Upon dissolution, the
Partnership shall not be terminated and shall continue until the winding up of
the affairs of the Partnership is completed. Upon the winding up of the
Partnership, the General Partner, or any other Person designated by the General
Partner (the “Liquidation Agent”), shall take full account of the assets and
liabilities of the Partnership and shall, unless the General Partner determines
otherwise, liquidate the assets of the Partnership as promptly as is consistent
with obtaining the fair value thereof. The proceeds of any liquidation shall be
applied and distributed in the following order:

 

(a)                First, to the satisfaction of debts and liabilities of the
Partnership (including satisfaction of all indebtedness to Partners and/or their
Affiliates to the extent otherwise permitted by law) including the expenses of
liquidation, and including the establishment of any reserve which the
Liquidation Agent shall deem reasonably necessary for any contingent,
conditional or unmatured contractual liabilities or obligations of the
Partnership (“Contingencies”). Any such reserve may be paid over by the
Liquidation Agent to any attorney-at-law, or acceptable party, as escrow agent,
to be held for disbursement in payment of any Contingencies and, at the
expiration of such period as shall be deemed advisable by the Liquidation Agent
for distribution of the balance in the manner hereinafter provided in this
Section 9.03; and

 

(b)               The balance, if any, to the holders of Units, pro rata to each
of the holders of Units in accordance with their Total Percentage Interests.

 

SECTION 9.04       Time for Liquidation. A reasonable amount of time shall be
allowed for the orderly liquidation of the assets of the Partnership and the
discharge of liabilities to creditors so as to enable the Liquidation Agent to
minimize the losses attendant upon such liquidation.

 

SECTION 9.05       Termination. The Partnership shall terminate when all of the
assets of the Partnership, after payment of or due provision for all debts,
liabilities and obligations of the Partnership, shall have been distributed to
the holders of Units in the manner provided for in this Article IX, and the
Certificate shall have been cancelled in the manner required by the Act.

 

26

 

 

SECTION 9.06       Claims of the Partners. The Partners shall look solely to the
Partnership’s assets for the return of their Capital Contributions, and if the
assets of the Partnership remaining after payment of or due provision for all
debts, liabilities and obligations of the Partnership are insufficient to return
such Capital Contributions, the Partners shall have no recourse against the
Partnership or any other Partner or any other Person. No Partner with a negative
balance in such Partner’s Capital Account shall have any obligation to the
Partnership or to the other Partners or to any creditor or other Person to
restore such negative balance during the existence of the Partnership, upon
dissolution or termination of the Partnership or otherwise, except to the extent
required by the Act.

 

SECTION 9.07       Survival of Certain Provisions. Notwithstanding anything to
the contrary in this Agreement, the provisions of Sections 10.02, 11.09 and
11.10 shall survive the termination of the Partnership.

 

ARTICLE X

LIABILITY AND INDEMNIFICATION

 

SECTION 10.01   Liability of Partners.

 

(a)                No Limited Partner and no Affiliate, manager, member,
employee or agent of a Limited Partner shall be liable for any debt, obligation
or liability of the Partnership or of any other Partner or have any obligation
to restore any deficit balance in its Capital Account solely by reason of being
a Partner of the Partnership, except to the extent required by the Act.

 

(b)               This Agreement is not intended to, and does not, create or
impose any duty (including any fiduciary duty) on any of the Partners (including
without limitation, the General Partner) hereto or on their respective
Affiliates. Further, the Partners hereby waive any and all duties (including
fiduciary duties) that, absent such waiver, may exist at or be implied by Law or
in equity, and in doing so, recognize, acknowledge and agree that their duties
and obligations to one another and to the Partnership are only as expressly set
forth in this Agreement and those required by the Act.

 

(c)                To the extent that, at law or in equity, any Partner
(including without limitation, the General Partner) has duties (including
fiduciary duties) and liabilities relating thereto to the Partnership, to
another Partner or to another Person who is a party to or is otherwise bound by
this Agreement, the Partners (including without limitation, the General Partner)
acting under this Agreement will not be liable to the Partnership, to any such
other Partner or to any such other Person who is a party to or is otherwise
bound by this Agreement, for their good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict or
eliminate the duties and liabilities relating thereto of any Partner (including
without limitation, the General Partner) otherwise existing at law or in equity,
are agreed by the Partners to replace to that extent such other duties and
liabilities of the Partners relating thereto (including without limitation, the
General Partner).

 

27

 

 

(d)               The General Partner may consult with legal counsel,
accountants and financial or other advisors and any act or omission suffered or
taken by the General Partner on behalf of the Partnership or in furtherance of
the interests of the Partnership in good faith in reliance upon and in
accordance with the advice of such counsel, accountants or financial or other
advisors will be full justification for any such act or omission, and the
General Partner will be fully protected in so acting or omitting to act so long
as such counsel or accountants or financial or other advisors were selected with
reasonable care.

 

(e)                Notwithstanding any other provision of this Agreement or
otherwise applicable provision of law or equity, whenever in this Agreement the
General Partner is permitted or required to make a decision (i) in its “sole
discretion” or “discretion” or under a grant of similar authority or latitude,
such General Partner shall be entitled to consider only such interests and
factors as it desires, including its own interests, and shall, to the fullest
extent permitted by applicable Law, have no duty or obligation to give any
consideration to any interest of or factors affecting the Partnership or the
Limited Partners, or (ii) in its “good faith” or under another expressed
standard, such General Partner shall act under such express standard and shall
not be subject to any other or different standards.

 

SECTION 10.02   Indemnification.

 

(a)                Indemnification. To the fullest extent permitted by law, as
the same exists or hereafter be amended (but in the case of any such amendment,
only to the extent that such amendment permits the Partnership to provide
broader indemnification rights than such law permitted the Partnership to
provide prior to such amendment), the Partnership shall indemnify any Indemnitee
who was or is made or is threatened to be made a party to or is otherwise
involved in any threatened, pending or completed action, suit or proceeding
(brought in the right of the Partnership or otherwise), whether civil, criminal,
administrative, arbitrative or investigative, and whether formal or informal,
including appeals, by reason of his or her or its status as an Indemnitee or by
reason of any action alleged to have been taken or omitted to be taken by
Indemnitee in such capacity, for and against all loss and liability suffered and
expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement reasonably incurred by such Indemnitee in connection with such
action, suit or proceeding, including appeals; provided that such Indemnitee
shall not be entitled to indemnification hereunder if, but only to the extent
that, such Indemnitee’s conduct constituted fraud, bad faith or willful
misconduct. Notwithstanding the preceding sentence, except as otherwise provided
in Section 10.02(c), the Partnership shall be required to indemnify an
Indemnitee in connection with any action, suit or proceeding (or part thereof)
(i) commenced by such Indemnitee only if the commencement of such action, suit
or proceeding (or part thereof) by such Indemnitee was authorized by the General
Partner and (ii) by or in the right of the Partnership only if the General
Partner has provided its prior written consent. The indemnification of an
Indemnitee of the type identified in clause (d) of the definition of Indemnitee
shall be secondary to any and all indemnification to which such Indemnitee is
entitled from (x) the relevant other Person (including any payment made to such
Indemnitee under any insurance policy issued to or for the benefit of such
Person or Indemnitee), and (y) the relevant Fund (if applicable) (including any
payment made to such Indemnitee under any insurance policy issued to or for the
benefit of such Fund or the Indemnitee) (clauses (x) and (y) together, the
“Primary Indemnification”), and will only be paid to the extent the Primary
Indemnification is not paid and/or does not provide coverage (e.g., a
self-insured retention amount under an insurance policy). No such Person or Fund
shall be entitled to contribution or indemnification from or subrogation against
the Partnership. The indemnification of any other Indemnitiee shall, to the
extent not in conflict with such policy, be secondary to any and all payment to
which such Indemnitee is entitled from any relevant insurance policy issued to
or for the benefit of the Partnership or any Indemnitee.

 

28

 

 

(b)               Advancement of Expenses. To the fullest extent permitted by
law, the Partnership shall promptly pay expenses (including attorneys’ fees)
incurred by any Indemnitee in appearing at, participating in or defending any
action, suit or proceeding in advance of the final disposition of such action,
suit or proceeding, including appeals, upon presentation of an undertaking on
behalf of such Indemnitee to repay such amount if it shall ultimately be
determined that such Indemnitee is not entitled to be indemnified under this
Section 10.02 or otherwise. Notwithstanding the preceding sentence, except as
otherwise provided in Section 10.02(c), the Partnership shall be required to pay
expenses of an Indemnitee in connection with any action, suit or proceeding (or
part thereof) (i) commenced by such Indemnitee only if the commencement of such
action, suit or proceeding (or part thereof) by such Indemnitee was authorized
by the General Partner and (ii) by or in the right of the Partnership only if
the General Partner has provided its prior written consent.

 

(c)                Unpaid Claims. If a claim for indemnification (following the
final disposition of such action, suit or proceeding) or advancement of expenses
under this Section 10.02 is not paid in full within 30 days after a written
claim therefor by any Indemnitee has been received by the Partnership, such
Indemnitee may file proceedings to recover the unpaid amount of such claim and,
if successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Partnership shall have the burden
of proving that such Indemnitee is not entitled to the requested indemnification
or advancement of expenses under applicable Law.

 

(d)               Insurance. (i) To the fullest extent permitted by law, the
Partnership may purchase and maintain insurance on behalf of any person
described in Section 10.02(a) against any liability asserted against such
person, whether or not the Partnership would have the power to indemnify such
person against such liability under the provisions of this Section 10.02 or
otherwise.

 

(ii)               In the event of any payment by the Partnership under this
Section 10.02, the Partnership shall be subrogated to the extent of such payment
to all of the rights of recovery of the Indemnitee from any relevant other
Person or under any insurance policy issued to or for the benefit of the
Partnership, such relevant other Person, or any Indemnitee. Each Indemnitee
agrees to execute all papers required and take all action necessary to secure
such rights, including the execution of such documents as are necessary to
enable the Partnership to bring suit to enforce any such rights in accordance
with the terms of such insurance policy or other relevant document. The
Partnership shall pay or reimburse all expenses actually and reasonably incurred
by the Indemnitee in connection with such subrogation.

 

(iii)             The Partnership shall not be liable under this Section 10.02
to make any payment of amounts otherwise indemnifiable hereunder (including, but
not limited to, judgments, fines and amounts paid in settlement, and excise
taxes with respect to an employee benefit plan or penalties) if and to the
extent that the applicable Indemnitee has otherwise actually received such
payment under this Section 10.02 or any insurance policy, contract, agreement or
otherwise.

 

29

 

 

(e)                Non-Exclusivity of Rights. The provisions of this Section
10.02 shall be applicable to all actions, claims, suits or proceedings made or
commenced after the date of this Agreement, whether arising from acts or
omissions to act occurring before or after its adoption. The provisions of this
Section 10.02 shall be deemed to be a contract between the Partnership and each
person entitled to indemnification under this Section 10.02 (or legal
representative thereof) who serves in such capacity at any time while this
Section 10.02 and the relevant provisions of applicable Law, if any, are in
effect, and any amendment, modification or repeal hereof shall not affect any
rights or obligations then existing with respect to any state of facts or any
action, suit or proceeding then or theretofore existing, or any action, suit or
proceeding thereafter brought or threatened based in whole or in part on any
such state of facts. If any provision of this Section 10.02 shall be found to be
invalid or limited in application by reason of any law or regulation, it shall
not affect the validity of the remaining provisions hereof. The rights of
indemnification provided in this Section 10.02 shall neither be exclusive of,
nor be deemed in limitation of, any rights to which any person may otherwise be
or become entitled or permitted by contract, this Agreement or as a matter of
law, both as to actions in such person’s official capacity and actions in any
other capacity, it being the policy of the Partnership that indemnification of
any person whom the Partnership is obligated to indemnify pursuant to Section
10.02(a) shall be made to the fullest extent permitted by law.

 

For purposes of this Section 10.02, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to “serving at the request of the Partnership” shall include any
service as a director, officer, employee or agent of the Partnership which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries.

 

This Section 10.02 shall not limit the right of the Partnership, to the extent
and in the manner permitted by law, to indemnify and to advance expenses to, and
purchase and maintain insurance on behalf of, persons other than persons
described in Section 10.02(a).

 

ARTICLE XI

MISCELLANEOUS

 

SECTION 11.01   Severability. If any term or other provision of this Agreement
is held to be invalid, illegal or incapable of being enforced by any rule of
Law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions is not affected in any manner materially
adverse to any party. Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.

 

30

 

 

SECTION 11.02   Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by courier
service (delivery receipt requested), by fax, by electronic mail or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
11.02):

 

(a) If to the Partnership or the General Partner, to it at:       777 West
Putnam Avenue, 3rd Floor   Greenwich, CT 06830   Attention: Leonard M.
Tannenbaum and Bernard D. Berman   Electronic Mail:     (b) If to any Partner,
to the contact information on file with the Partnership.

 

FSAM shall use commercially reasonable efforts to forward any such communication
to the applicable Partner’s address, email address or facsimile number as shown
in the Partnership’s books and records.

 

SECTION 11.03   Cumulative Remedies. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive its right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights the parties may
have by Law.

 

SECTION 11.04   Binding Effect. This Agreement shall be binding upon and inure
to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, executors, administrators, heirs, legal
representatives and assigns.

 

SECTION 11.05   Interpretation. Throughout this Agreement, nouns, pronouns and
verbs shall be construed as masculine, feminine, neuter, singular or plural,
whichever shall be applicable. Unless otherwise specified, all references herein
to “Articles,” “Sections” and paragraphs shall refer to corresponding provisions
of this Agreement.

 

Each party hereto acknowledges and agrees that the parties hereto have
participated collectively in the negotiation and drafting of this Agreement and
that he or she or it has had the opportunity to draft, review and edit the
language of this Agreement; accordingly, it is the intention of the parties that
no presumption for or against any party arising out of drafting all or any part
of this Agreement will be applied in any dispute relating to, in connection with
or involving this Agreement. Accordingly, the parties hereby waive to the
fullest extent permitted by law the benefit of any rule of law or any legal
decision that would require that in cases of uncertainty, the language of a
contract should be interpreted most strongly against the party who drafted such
language.

 

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SECTION 11.06   Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. Copies of executed counterparts
transmitted by telecopy or other electronic transmission service shall be
considered original executed counterparts for purposes of this Section 11.06.

 

SECTION 11.07   Further Assurances. Each Limited Partner shall perform all other
acts and execute and deliver all other documents as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.

 

SECTION 11.08   Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.

 

SECTION 11.09   Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Delaware.

 

SECTION 11.10   Dispute Resolution.

 

(a)                The Partnership and each Partner, each other Person who
acquires a Unit or other interest in the Partnership and each other Person who
is bound by this Agreement (collectively, the “Consenting Parties” and each a
“Consenting Party”) (i) irrevocably agrees that, unless the General Partner
shall otherwise agree in writing, any claims, suits, actions or proceedings
arising out of or relating in any way to this Agreement or any interest in the
Partnership (including, without limitation, any claims, suits or actions under
or to interpret, apply or enforce (A) the provisions of this Agreement,
including without limitation the validity, scope or enforceability of this
Section 11.10(a) or the arbitrability of any Dispute (as defined below), (B) the
duties, obligations or liabilities of the Partnership to the Partners, or of the
Partners to the Partnership, or among Partners, (C) the rights or powers of, or
restrictions on, the Partnership, or any Partner, (D) any provision of the Act
or other similar applicable statutes, (E) any other instrument, document,
agreement or certificate contemplated either by any provision of the Act
relating to the Partnership or by this Agreement or (F) the federal securities
laws of the United States or the securities or antifraud laws of any
international, national, state, provincial, territorial, local or other
governmental or regulatory authority, including, in each case, the applicable
rules and regulations promulgated thereunder (regardless of whether such
Disputes (x) sound in contract, tort, fraud or otherwise, (y) are based on
common law, statutory, equitable, legal or other grounds, or (z) are derivative
or direct claims)) (a “Dispute”) shall be finally settled by arbitration
conducted by three arbitrators (or, in the event the amount of quantified claims
and/or estimated monetary value of other claims contained in the applicable
request for arbitration is less than $3.0 million, by a sole arbitrator) in the
Borough of Manhattan, New York City in accordance with the Rules of Arbitration
of the International Chamber of Commerce (including the rules relating to costs
and fees) existing on the date of this Agreement except to the extent those
rules are inconsistent with the terms of this Section 11.10, and that such
arbitration shall be the exclusive manner pursuant to which any Dispute shall be
resolved; (ii) agrees that this Agreement involves commerce and is governed by
the Federal Arbitration Act, 9 U.S.C. Section 1, et seq. and any applicable
treaties governing the recognition and enforcement of international arbitration
agreements and awards; (iii) agrees to take all steps necessary or advisable,
including the execution of documents to be filed with the International Court of
Arbitration or the International Centre for ADR in order to properly submit any
Dispute for arbitration pursuant to this Section 11.10; (iv) irrevocably waives,
to the fullest extent permitted by law, any objection it may have or hereafter
have to the submission of any Dispute for arbitration pursuant to this Section
11.10 and any right to lay claim to jurisdiction in any venue; (v) agrees that
(A) the arbitrator(s) shall be U.S. lawyers, U.S. law professors and/or retired
U.S. judges and all arbitrators, including the president of the arbitral
tribunal, may be U.S. nationals and (B) the arbitrator(s) shall conduct the
proceedings in the English language; (vi) agrees that except as required by law
(including any disclosure requirement to which the Partnership may be subject
under any securities law, rule or regulation or applicable securities exchange
rule or requirement) or as may be reasonably required in connection with
ancillary judicial proceedings to compel arbitration, to obtain temporary or
preliminary judicial relief in aid of arbitration, or to confirm or challenge an
arbitration award, the arbitration proceedings, including any hearings, shall be
confidential, and the parties shall not disclose any awards, any materials in
the proceedings created for the purpose of the arbitration, or any documents
produced by another party in the proceedings not otherwise in the public domain;
(vii) irrevocably agrees that, unless the General Partner and the relevant named
party or parties shall otherwise mutually agree in writing, (A) the
arbitrator(s) may award declaratory or injunctive relief only in favor of the
individual party seeking relief and only to the extent necessary to provide
relief warranted by that party’s individual claim, (B) SUCH CONSENTING PARTY MAY
BRING CLAIMS ONLY IN ITS INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF, CLASS
REPRESENTATIVE OR CLASS MEMBER, OR AS A PRIVATE ATTORNEY GENERAL, IN ANY
PURPORTED CLASS OR REPRESENTATIVE PROCEEDING, and (C) the arbitrators) may not
consolidate more than one person’s claims, and shall not have authority
otherwise to preside over any form of a representative or class or consolidated
proceeding or entertain any claim on behalf of a person who is not a named
party, nor shall any arbitrator have authority to make any award for the benefit
of, or against, any person who is not a named party; and (viii) agrees that if a
Dispute that would be arbitrable under this Agreement if brought against a
Consenting Party is brought against an employee, officer, director, agent or
indemnitee of such Consenting Party or its Affiliates (other than Disputes
brought by the employer or principal of any such employee, officer, director,
agent or indemnitee) for alleged actions or omissions of such employee, officer,
director, agent or indemnitee undertaken as an employee, officer, director,
agent or indemnitee of such Consenting Party or its Affiliates, such employee,
officer, director, agent or indemnitee shall be entitled to invoke this
arbitration agreement. Notwithstanding Section 11.01, each provision of this
Section 11.10(a) shall be deemed material, and shall not be severable and this
Section 11.10(a) shall be enforced only in its entirety. Performance under this
Agreement shall continue if reasonably possible during any arbitration
proceedings.

 

32

 

 

(b)               Notwithstanding the provisions of paragraph (a), any
Consenting Party may bring an action or special proceeding for the purpose of
compelling a party to arbitrate, seeking temporary or preliminary relief in aid
of an arbitration hereunder, or enforcing an arbitration award and, for the
purposes of this paragraph (b), each Consenting Party (i) irrevocably agrees
that, unless the General Partner consents in writing to the selection of an
alternative forum, any such action or special proceeding shall be exclusively
brought in the Court of Chancery of the State of Delaware or, if such court does
not have subject matter jurisdiction thereof, any other court located in the
State of Delaware with subject matter jurisdiction; (ii) irrevocably submits to
the exclusive jurisdiction of such courts in connection with any such action or
special proceeding; (iii) irrevocably agrees not to, and waives any right to,
assert in any such action or special proceeding that (A) it is not personally
subject to the jurisdiction of such courts or any other court to which
proceedings in such courts may be appealed, (B) such action or special
proceeding is brought in an inconvenient forum, or (C) the venue of such action
or special proceeding is improper; (iv) expressly waives any requirement for the
posting of a bond by a party bringing such action or special proceeding; (v)
consents to process being served in any such action or special proceeding by
mailing, certified mail, return receipt requested, a copy thereof to such party
at the address in effect for notices hereunder, and agrees that such service
shall constitute good and sufficient service of process and notice thereof;
provided that nothing in clause (v) hereof shall affect or limit any right to
serve process in any other manner permitted by law; (VI) IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY SUCH CLAIM, SUIT, ACTION OR PROCEEDING;
and (vii) agrees that proof shall not be required that monetary damages for
breach of the provisions of this Agreement would be difficult to calculate and
that remedies at law would be inadequate.

 

33

 

 

(c)                If the arbitrator(s) shall determine that any Dispute is not
subject to arbitration, or the arbitrator(s) or any court or tribunal of
competent jurisdiction shall refuse to enforce any provision of Section 11.10(a)
or shall determine that any Dispute is not subject to arbitration as
contemplated thereby, then, and only then, shall the alternative provisions of
this Section 11.10(c) be applicable. Each Consenting Party, to the fullest
extent permitted by law, (i) irrevocably agrees that unless the General Partner
consents in writing to the selection of an alternative forum, any Dispute shall
be exclusively brought in the Court of Chancery of the State of Delaware or, if
such court does not have subject matter jurisdiction thereof, any other court
located in the State of Delaware with subject matter jurisdiction over such
Dispute; (ii) irrevocably submits to the exclusive jurisdiction of such courts
in connection with any such claim, suit, action or proceeding; (iii) irrevocably
agrees not to, and waives any right to, assert in any such claim, suit, action
or proceeding that (A) it is not personally subject to the jurisdiction of such
courts or any other court to which proceedings in such courts may be appealed,
(B) such claim, suit, action or proceeding is brought in an inconvenient forum,
or (C) the venue of such claim, suit, action or proceeding is improper; (iv)
expressly waives any requirement for the posting of a bond by a party bringing
such claim, suit, action or proceeding; (v) consents to process being served in
any such claim, suit, action or proceeding by mailing, certified mail, return
receipt requested, a copy thereof to such party at the address in effect for
notices hereunder, and agrees that such service shall constitute good and
sufficient service of process and notice thereof; provided that nothing in
clause (v) hereof shall affect or limit any right to serve process in any other
manner permitted by law; and (VI) IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY SUCH CLAIM, SUIT, ACTION OR PROCEEDING; AND (vii) agrees that
proof shall not be required that monetary damages for breach of the provisions
of this Agreement would be difficult to calculate and that remedies at law would
be inadequate. The parties acknowledge that the fora designated by this
paragraph (c) have a reasonable relation to this Agreement, and to the parties’
relationship with one another.

 

SECTION 11.11   Expenses. Except as otherwise specified in this Agreement, the
Partnership shall be responsible for all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with its operation.

 

34

 

 

SECTION 11.12   Amendments and Waivers. (a) This Agreement (including the
Annexes hereto) may be amended, supplemented, waived or modified in writing by
the General Partner and Limited Partners holding a majority of the Units;
provided that no amendment may materially and adversely affect the rights of a
holder of Units, as such, other than on a pro rata basis with other holders of
Units of the same Class without the consent of such holder (or, if there is more
than one such holder that is so affected, without the consent of a majority in
interest of such affected holders in accordance with their holdings of such
Class of Units); provided further, however, that notwithstanding the foregoing,
the General Partner may, without the written consent of any Limited Partner or
any other Person, amend, supplement, waive or modify any provision of this
Agreement and execute, swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect: (i) any
amendment, supplement, waiver or modification that the General Partner
determines to be necessary or appropriate in connection with the creation,
authorization or issuance of Units or any Class or series of equity interest in
the Partnership pursuant to Section 7.01 hereof; (ii) the admission,
substitution, withdrawal or removal of Partners in accordance with this
Agreement, including pursuant to Section 7.01 hereof; (iii) a change in the name
of the Partnership, the location of the principal place of business of the
Partnership, the registered agent of the Partnership or the registered office of
the Partnership; (iv) any amendment, supplement, waiver or modification that the
General Partner determines in its sole discretion to be necessary or appropriate
to address changes in U.S. federal income tax regulations, legislation or
interpretation; and/or (v) a change in the Fiscal Year or taxable year of the
Partnership and any other changes that the General Partner determines to be
necessary or appropriate as a result of a change in the Fiscal Year or taxable
year of the Partnership including a change in the dates on which distributions
are to be made by the Partnership. If an amendment has been approved in
accordance with this agreement, such amendment shall be adopted and effective
with respect to all Partners. Upon obtaining such approvals as may be required
by this Agreement, and without further action or execution on the part of any
other Partner or other Person, any amendment to this Agreement may be
implemented and reflected in a writing executed solely by the General Partner
and the Limited Partners shall be deemed a party to and bound by such amendment.

 

(b)               No failure or delay by any party in exercising any right,
power or privilege hereunder (other than a failure or delay beyond a period of
time specified herein) shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by Law.

 

(c)                The General Partner may, in its sole discretion, unilaterally
amend this Agreement on or before the effective date of the final regulations to
provide for (i) the election of a safe harbor under Proposed Treasury Regulation
Section 1.83-3(l) (or any similar provision) under which the fair market value
of a partnership interest (or interest in an entity treated as a partnership for
U.S. federal income tax purposes) that is transferred is treated as being equal
to the liquidation value of that interest, (ii) an agreement by the Partnership
and each of its Partners to comply with all of the requirements set forth in
such regulations and Notice 2005-43 (and any other guidance provided by the
Internal Revenue Service with respect to such election) with respect to all
partnership interests (or interest in an entity treated as a partnership for
U.S. federal income tax purposes) transferred in connection with the performance
of services while the election remains effective, (iii) the allocation of items
of income, gains, deductions and losses required by the final regulations
similar to Proposed Treasury Regulation Section 1.704-1(b)(4)(xii)(b) and (c),
and (iv) any other related amendments.

 

35

 

 

(d)               Except as may be otherwise required by law in connection with
the winding-up, liquidation, or dissolution of the Partnership, each Partner
hereby irrevocably waives any and all rights that it may have to maintain an
action for judicial accounting or for partition of any of the Partnership’s
property.

 

SECTION 11.13   No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns and successors and nothing herein, express or implied, is intended to or
shall confer upon any other Person or entity, any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement
(other than pursuant to Section 10.02 hereof); provided, however that each
employee, officer, director, agent or indemnitee of any Consenting Party or its
Affiliates is an intended third party beneficiary of Section 11.10(a) and shall
be entitled to enforce its rights thereunder.

 

SECTION 11.14   Headings. The headings and subheadings in this Agreement are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.

 

SECTION 11.15   Power of Attorney. Each Limited Partner, by its execution
hereof, hereby makes, constitutes and appoints the General Partner as its true
and lawful agent and attorney in fact, with full power of substitution and full
power and authority in its name, place and stead, to make, execute, sign,
acknowledge, swear to, record and file (a) this Agreement and any amendment to
this Agreement that has been adopted as herein provided; (b) the original
certificate of limited partnership of the Partnership and all amendments thereto
required or permitted by law or the provisions of this Agreement; (c) all
certificates and other instruments (including consents and ratifications which
the Limited Partners have agreed to provide upon a matter receiving the agreed
support of Limited Partners) deemed advisable by the General Partner to carry
out the provisions of this Agreement (including the provisions of Section 8.05)
and Law or to permit the Partnership to become or to continue as a limited
partnership or partnership wherein the Limited Partners have limited liability
in each jurisdiction where the Partnership may be doing business; (d) all
instruments that the General Partner deems appropriate to reflect a change or
modification of this Agreement or the Partnership in accordance with this
Agreement, including, without limitation, the admission of additional Limited
Partners or substituted Limited Partners pursuant to the provisions of this
Agreement; (e) all conveyances and other instruments or papers deemed advisable
by the General Partner to effect the liquidation and termination of the
Partnership; and (f) all fictitious or assumed name certificates required or
permitted (in light of the Partnership’s activities) to be filed on behalf of
the Partnership.

 

36

 

 

SECTION 11.16   Separate Agreements; Schedules. Notwithstanding any other
provision of this Agreement, including Section 11.12, the General Partner may,
or may cause the Partnership to, without the approval of any Limited Partner or
other Person, enter into separate subscription, letter or other agreements with
individual Limited Partners with respect to any matter, which have the effect of
establishing rights under, or altering, supplementing or amending the terms of,
this Agreement. The parties hereto agree that any terms contained in any such
separate agreement shall govern with respect to such Limited Partner(s) party
thereto notwithstanding the provisions of this Agreement. The General Partner
may from time to time execute and deliver to the Limited Partners schedules
which set forth information contained in the books and records of the
Partnership and any other matters deemed appropriate by the General Partner.
Such schedules shall be for information purposes only and shall not be deemed to
be part of this Agreement for any purpose whatsoever.

 

SECTION 11.17   Partnership Status. The parties intend to treat the Partnership
as a partnership for U.S. federal income tax purposes.

 

SECTION 11.18   Delivery by Facsimile or Email. This Agreement, the agreements
referred to herein, and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine or email with scan or facsimile attachment, 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. No party hereto or to any such
agreement or instrument shall raise the use of a facsimile machine or email to
deliver a signature or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of a facsimile machine or email
as a defense to the formation or enforceability of a contract, and each such
party forever waives any such defense.

 

[Remainder of Page Intentionally Left Blank]

 

37

 

  

IN WITNESS WHEREOF, the parties hereto have entered into this Agreement or have
caused this Agreement to be duly executed by their respective authorized
officers, in each case as of the date first above stated.

 

  GENERAL PARTNER:         FIFTH STREET ASSET MANAGEMENT INC.                  
  By: /s/ Leonard M. Tannenbaum                       Name: Leonard M.
Tannenbaum     Title: Chief Executive Officer

 

 

 

 

 

 

 

[Amended and Restated Limited Partnership Agreement of Fifth Street Holdings
L.P.]

 

 

 

LIMITED PARTNERS

 

 

/s/ Leonard M. Tannenbaum             
Name: Leonard M. Tannenbaum

 

 

 

/s/ Bernard D. Berman                          
Name: Bernard D. Berman

 

 

 

/s/ Ivelin M. Dimitrov                             
Name: Ivelin M. Dimitrov

 

 

 

/s/ Charles J. Zmijeski                             
Name: Charles J. Zmijeski

 

 

 

/s/ Sandeep K. Khorana                         
Name: Sandeep K. Khorana

 

 

 

/s/ Alexander C. Frank                             
Name: Alexander C. Frank

 

 

 

/s/ Brian D. Finkelstein                              
Name: Brian D. Finkelstein

 

 

 

/s/ Kyse S. Sharp                                        
Name: Kyde S. Sharp

 

 

 

/s/ James F. Velgot                                     
Name: James F. Velgot

 

 

 

 

/s/ Stacey L. Tannenbaum                          
Name: Stacey L. Tannenbaum

 

 

 

/s/ Steven M. Noreika                                   
Name: Steven M. Noreika

 

 

 

/s/ Matthew Bandini                                     
Name: Matthew Bandini

 

 

 

/s/ Greg Browne                                            
Name: Greg Browne

 

 

 

 

Tannenbaum Family 2012 Trust

 

 

/s/ Bernard D. Berman                                    
Name: Bernard D. Berman

Title: Trustee

 

 

FSC CT II, Inc.

 

 

/s/ Leonard M. Tannenbaum                             
Name: Leonard M. Tannenbaum

Title: President

 

 

 

 

Bernard D. Berman 2012 Trust

 

By _/s/ William F. Meehan________________
Name: William F. Meehan
Title    Trustee

 

By __/s/ Nicole H. Berman______________
Name: Nicole H. Berman
Title:   Trustee