Exhibit 10.29

 

 

BLACKSTONE REAL ESTATE SPECIAL SITUATIONS ASSOCIATES L.L.C.

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

 

 

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

TABLE OF CONTENTS

 

          Page

ARTICLE I DEFINITIONS

   1

Section 1.1.

   Definitions    1

Section 1.2.

   Terms Generally    9

ARTICLE II GENERAL PROVISIONS

   9

Section 2.1.

   Managing, Regular and Special Members    9

Section 2.2.

   Continuation; Name; Foreign Jurisdictions    9

Section 2.3.

   Term    9

Section 2.4.

   Purposes; Powers    9

Section 2.5.

   Registered Office; Place of Business; Registered Agent    12

ARTICLE III MANAGEMENT

   12

Section 3.1.

   Managing Member    12

Section 3.2.

   Member Voting, etc.    13

Section 3.3.

   Management    13

Section 3.4.

   Responsibilities of Members    14

Section 3.5.

   Exculpation and Indemnification    14

Section 3.6.

   Representations of Members    16

ARTICLE IV CAPITAL OF THE COMPANY

   17

Section 4.1.

   Capital Contributions by Members    17

Section 4.2.

   Interest    17

Section 4.3.

   Partial Withdrawals of Capital    17

ARTICLE V PARTICIPATION IN PROFITS AND LOSSES

   17

Section 5.1.

   General Accounting Matters    17

Section 5.2.

   Capital Accounts    19

Section 5.3.

   Profit Sharing Percentages    19

Section 5.4.

   Allocations of Net Income (Loss)    20

Section 5.5.

   Liability of Members    20

Section 5.6.

   Repurchase Rights, etc.    20

Section 5.7.

   Distributions    20

Section 5.8.

   Business Expenses    21

ARTICLE VI ADDITIONAL MEMBERS; WITHDRAWAL OF MEMBERS; SATISFACTION AND DISCHARGE
OF COMPANY INTERESTS; TERMINATION

   21

Section 6.1.

   Additional Members    21

Section 6.2.

   Withdrawal of Members    22

Section 6.3.

   Company Interests Not Transferable    23

Section 6.4.

   Consequences upon Withdrawal of a Member    23

Section 6.5.

   Satisfaction and Discharge of a Withdrawn Member’s Interest    23

Section 6.6.

   Dissolution of the Company    28

Section 6.7.

   Certain Tax Matters    28

Section 6.8.

   Special Basis Adjustments    30

ARTICLE VII MISCELLANEOUS

   30

 

i

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

Section 7.1.

   Submission to Jurisdiction; Waiver of Jury Trial    30

Section 7.2.

   Ownership and Use of the Blackstone Name    31

Section 7.3.

   Written Consent    31

Section 7.4.

   Admission Letters; Schedules    31

Section 7.5.

   Governing Law; Separability of Provisions    32

Section 7.6.

   Successors and Assigns    32

Section 7.7.

   Confidentiality; Restrictive Covenants    32

Section 7.8.

   Notices    32

Section 7.9.

   Counterparts    32

Section 7.10.

   Power of Attorney    32

Section 7.11.

   Member’s Will    33

Section 7.12.

   Cumulative Remedies    33

Section 7.13.

   Legal Fees    33

Section 7.14.

   Entire Agreement    33

 

ii

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

BLACKSTONE REAL ESTATE SPECIAL SITUATIONS ASSOCIATES L.L.C.

SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of BLACKSTONE
REAL ESTATE SPECIAL SITUATIONS ASSOCIATES L.L.C., a Delaware limited liability
company (the “Company”), dated as of June 30, 2008 by and among Blackstone
Holdings II L.P., a Delaware limited partnership (the “Managing Member” or
“Holdings”), the other members of the Company (if any) as set forth in the books
and records of the Company, and such other persons that are admitted to the
Company as members after the date hereof in accordance herewith.

W I T N E S S E T H

WHEREAS, the Amended and Restated Operating Agreement of Blackstone Real Estate
Special Situations Associates L.L.C, dated as of May 15, 2008, which amended and
restated the Original Operating Agreement of the Company, dated as of
December 13, 2007 (the “Original Operating Agreement”), constitutes the existing
limited liability company agreement of the Company (the “Existing Agreement”);

WHEREAS, in order to amend the Company’s Existing Agreement to reflect certain
changes thereto, the parties hereto wish to amend and restate the Existing
Agreement in its entirety as hereinafter set forth.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. Unless the context otherwise requires, the following
terms shall have the following meanings for purposes of this Agreement:

“Admission Letter” has the meaning set forth in Section 7.4.

“Affiliate” means, with respect to any Person, any other Person that either,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person.

“Agreement” means this Second Amended and Restated Limited Liability Company
Agreement, as it may be amended and restated from time to time.

“BCOM” means the collective reference to (i) Blackstone Communications Partners
I L.P., a Delaware limited partnership, and (ii) any other investment vehicle
established pursuant to Article 2 of the partnership agreement for the
partnership referred to in clause (i) above.

“BCP” means the collective reference to Blackstone Capital Partners L.P., a
Delaware limited partnership, and any other investment vehicle established in
accordance with the terms of Blackstone Capital Partners L.P.’s partnership
agreement to invest in lieu of Blackstone Capital Partners L.P. on behalf of one
or more of the partners thereof.

“BCP II” means the collective reference to Blackstone Capital Partners II
Merchant Banking Fund L.P., a Delaware limited partnership formerly known as
Blackstone Domestic Capital Partners II L.P., Blackstone Offshore Capital
Partners II L.P., a Cayman Islands exempted limited

 

1

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

partnership, and any other investment vehicle established pursuant to paragraph
2.7 of the respective partnership agreements of either of such partnerships.

“BCP III” means the collective reference to Blackstone Capital Partners III
Merchant Banking Fund L.P., a Delaware limited partnership, Blackstone Offshore
Capital Partners III L.P., a Cayman Islands exempted limited partnership, and
any other investment vehicle established pursuant to paragraph 2.7 of the
respective partnership agreements of either of such partnerships.

“BCP IV” is the collective reference to Blackstone Capital Partners IV L.P., a
Delaware limited partnership, and any other investment vehicle or structure
formed to invest in lieu thereof (in whole or in part).

“BCP V” is the collective reference to (i) Blackstone Capital Partners V L.P., a
Delaware limited partnership, and any alternative investment vehicles relating
thereto, (ii) BCP V-S L.P., a Delaware limited partnership, and any alternative
investment vehicles relating thereto, (iii) Blackstone Capital Partners V-AC
L.P., a Delaware limited partnership, and any alternative investment vehicles
relating thereto, and (iv) any other parallel funds formed in connection with
the foregoing.

“BFCOMP” means Blackstone Family Communications Partnership I L.P., Blackstone
Family Communications Partnership I-SMD L.P. and any other entity that is an
Affiliate thereof and has terms substantially similar to those of the foregoing
partnerships and is formed in connection with the participation by one or more
partners thereof directly or indirectly in investments in securities also
purchased by BCOM or any other funds with substantially similar investment
objectives to BCOM and that are sponsored or managed by an Affiliate of the
Company (which includes serving as general partner of such funds).

“BFCOMP Agreement” means the limited partnership agreement or other governing
document of each limited partnership or other entity named or referred to in the
definition of “BFCOMP”, as amended, supplemented, restated or otherwise modified
to date, and as such limited partnership agreement or other governing document
may be further amended, supplemented, restated or otherwise modified from time
to time, and any other BFCOMP limited partnership agreement or other governing
document.

“BFCOMP Investment” means any direct or indirect investment by BFCOMP.

“BFIP” means Blackstone Capital Associates II L.P., Blackstone Capital
Associates III L.P., Blackstone Family Investment Partnership II L.P.,
Blackstone Family Investment Partnership III L.P., Blackstone Family Investment
Partnership IV-A L.P., Blackstone Family Investment Partnership IV-A -SMD L.P.,
Blackstone Family Investment Partnership V L.P., Blackstone Family Investment
Partnership V- SMD L.P. and any other entity that is an Affiliate thereof and
has terms similar to those of the foregoing partnerships and is formed in
connection with the participation by one or more of the partners thereof in
investments in securities also purchased by BCP, BCP II, BCP III, BCP IV, BCP V
or any other fund with substantially similar investment objectives to BCP, BCP
II, BCP III, BCP IV and BCP V and that are sponsored or managed by an Affiliate
of the Company (which includes serving as general partner of such funds).

“BFIP Agreement” means the limited partnership agreement or other governing
document of each limited partnership or other entity named or referred to in the
definition of “BFIP”, as amended, supplemented, restated or otherwise modified
to date, and as such limited partnership agreement or other governing document
may be further amended, supplemented, restated or otherwise modified from time
to time, and any other BFIP limited partnership agreement or other governing

 

2

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

document.

“BFIP Investment” means any direct or indirect investment by BFIP.

“BFMEZP” means Blackstone Family Mezzanine Partnership-SMD L.P., Blackstone
Family Mezzanine Partnership II-SMD L.P., Blackstone Mezzanine Holdings L.P.,
Blackstone Mezzanine Holdings II L.P., any entity formed to invest side-by-side
with GSO Capital Opportunities Fund L.P. and any other entity that is an
Affiliate thereof and that has terms substantially similar to those of the
foregoing partnerships or other entities and is formed in connection with the
participation by one or more partners or other equity owners thereof directly or
indirectly in investments in securities also purchased by BMEZP I, BMEZP II, GSO
Capital Opportunities Fund L.P. or any other funds with substantially similar
investment objectives to BMEZP I, BMEZP II or GSO Capital Opportunities Fund
L.P. and that are sponsored or managed by an Affiliate of the Company (which
includes serving as general partner of such funds).

“BFMEZP Agreement” means the limited partnership agreement or other governing
document of each limited partnership or other entity named or referred to in the
definition of “BFMEZP”, as amended, supplemented, restated or otherwise modified
to date, and as such limited partnership agreement or other governing document
may be further amended, supplemented, restated or otherwise modified from time
to time, and any other BFMEZP limited partnership agreement or other governing
document.

“BFMEZP Investment” means any direct or indirect investment by BFMEZP.

“BFREP” means Blackstone Real Estate Capital Associates L.P., Blackstone Real
Estate Capital Associates II L.P., Blackstone Real Estate Capital Associates III
L.P., Blackstone Family Real Estate Partnership L.P., Blackstone Family Real
Estate Partnership II L.P., Blackstone Family Real Estate Partnership III L.P.,
Blackstone Family Real Estate Partnership International-A-SMD L.P., Blackstone
Family Real Estate Partnership IV-SMD L.P., Blackstone Family Real Estate
Partnership International II-SMD L.P., Blackstone Family Real Estate Partnership
V-SMD L.P., Blackstone Family Real Estate Partnership VI-SMD L.P., Blackstone
Family Real Estate Partnership Europe III-SMD L.P., Blackstone Real Estate
Holdings L.P., Blackstone Real Estate Holdings II L.P., Blackstone Real Estate
Holdings III L.P., Blackstone Real Estate Holdings International—A L.P.,
Blackstone Real Estate Holdings IV L.P., Blackstone Real Estate Holdings
International II L.P., Blackstone Real Estate Holdings V L.P., Blackstone Real
Estate Holdings VI L.P., Blackstone Real Estate Holdings Europe III L.P., and
any other entity that is an Affiliate thereof and that has terms substantially
similar to those of the foregoing partnerships and is formed in connection with
the participation by one or more partners thereof in real estate and real
estate-related investments also purchased by the Funds and any other funds with
substantially similar investment objectives to the Funds and that are sponsored
or managed by an Affiliate of the Company (which includes serving as general
partner of such funds).

“BFREP Agreement” means the limited partnership agreement or other governing
document of each limited partnership or other entity named or referred to in the
definition of “BFREP”, as amended, supplemented, restated or otherwise modified
to date, and as such limited partnership agreement or other governing document
may be further amended, supplemented, restated or otherwise modified from time
to time, and any other BFREP limited partnership agreement or other governing
document.

“BFREP Investment” means any direct or indirect investment by BFREP.

 

3

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

“Blackstone” means, collectively, The Blackstone Group L.P., a Delaware limited
partnership and any Affiliate thereof (excluding any portfolio companies of any
Blackstone sponsored investment funds).

“BMEZP I” means (i) Blackstone Mezzanine Partners L.P., a Delaware limited
partnership, and (ii) any other investment vehicle established pursuant to
Article 2 of the partnership agreement for the partnership referred to in clause
(i) above.

“BMEZP II” means (i) Blackstone Mezzanine Partners II L.P., a Delaware limited
partnership, and (ii) any other investment vehicle established pursuant to
Article 2 of the partnership agreement for the partnership referred to in clause
(i) above.

“BRESS Holdings” means Blackstone Real Estate Special Situations Holdings L.P.,
a Cayman Islands exempted limited partnership.

“BRESS Holdings Partnership Agreement” means the Amended and Restated Agreement
of Limited Partnership of BRESS Holdings, dated May 15, 2008, as amended,
supplemented or otherwise modified from time to time.

“Capital Account” means a capital account established for each Member on the
books and records of the Company and maintained and adjusted as provided in
Articles V and VI. A separate Capital Account shall be established for each
Member with respect to each category of Net Income (Loss) (including, without
limitation, Fund Net Income (Loss), Other Net Income (Loss) and the Incentive
Allocation) as may be determined by the Managing Member in its sole discretion.

“Cause” means the occurrence or existence of any of the following with respect
to a Member, as determined fairly, reasonably, on an informed basis and in good
faith by the Managing Member: (i) (w) any breach by any Member of any provision
of any non-competition agreement, (x) any material breach of this Agreement or
any rules or regulations applicable to such Member that are established by the
Managing Member, (y) such Member’s deliberate failure to perform his or her
duties to the Company, or (z) such Member’s committing to or engaging in any
conduct or behavior that is or may be harmful to the Company in a material way
as determined by the Managing Member; provided, that in the case of any of the
foregoing clauses (w), (x), (y) and (z), the Managing Member has given such
Member written notice (a “Notice of Breach”) within fifteen days after the
Managing Member becomes aware of such action and such Member fails to cure such
breach, failure to perform, conduct or behavior within fifteen days after
receipt of such Notice of Breach from the Managing Member (or such longer
period, not to exceed an additional fifteen days, as shall be reasonably
required for such cure, provided that such Member is diligently pursuing such
cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or
similar conduct against the Company; (iii) conviction (on the basis of a trial
or by an accepted plea of guilty or nolo contendere) of a felony or crime
(including any misdemeanor charge involving moral turpitude, false statements or
misleading omissions, forgery, wrongful taking, embezzlement, extortion or
bribery), or a determination by a court of competent jurisdiction, by a
regulatory body or by a self-regulatory body having authority with respect to
securities laws, rules or regulations of the applicable securities industry,
that such Member individually has violated any applicable securities laws or any
rules or regulations thereunder, or any rules of any such self-regulatory body
(including, without limitation, any licensing requirement), if such conviction
or determination has a material adverse effect on (A) such Member’s ability to
function as a Member, taking into account the services required of such Member
and the nature of the Company’s business, or (B) the business of the Company; or
(iv) any action or conduct that is opposed to the best interest of the Company
and its Affiliates.

 

4

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

“Class A Interest” has the meaning set forth in Section 5.7(a).

“Class B Interest” has the meaning set forth in Section 5.7(a).

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to
time, or any successor statute. Any reference herein to a particular provision
of the Code shall include, where appropriate, the corresponding provision in any
successor statute.

“Commitment” with respect to any Member means any commitment made by such Member
to contribute capital to the Company.

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

“Contingent” means subject to repurchase rights and/or other requirements.

“Covered Person” has the meaning set forth in Section 3.5(a).

“Delaware Arbitration Act” has the meaning set forth in Section 7.1(d).

“Delaware Fund” means Blackstone Real Estate Special Situations Fund L.P., a
Delaware limited partnership, and, where the context requires, any parallel
funds thereof or alternative investment vehicles related thereto.

“Delaware Fund Partnership Agreement” means the Amended and Restated Agreement
of Limited Partnership of the Delaware Fund, dated as of May 15, 2008, as
amended, supplemented or otherwise modified from time to time.

“Disposable Special Investment” has the meaning set forth in Section 5.7(a).

“Estate Planning Vehicle” has the meaning set forth in Section 6.3.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

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

“Fiscal Year” means a calendar year, or any other period chosen by the Managing
Member.

“Fund Agreements” means the collective reference to (i) Delaware Fund
Partnership Agreement, (ii) BRESS Holdings Partnership Agreement and (iii) any
other limited partnership agreements, operating agreements and other governing
documentation of the Funds, in each case, as amended, supplemented or otherwise
modified from time to time.

“Funds” means the collective reference to (i) the Delaware Fund, (ii) BRESS
Holdings and (iii) any other private investment partnerships for which the
Company serves as general partner and, where the context requires, any parallel
funds or alternative investment vehicles related to the foregoing.

“Fund Net Income (Loss)” means any net income (loss) of the Company relating to
the Company’s investment of capital in the Funds, but not including (i) Other
Net Income (Loss) or (ii) any net income (loss) relating to the Incentive
Allocation allocable to the Company from the Funds in accordance with the
applicable Fund Agreements, and any appreciation or depreciation relating
thereto. The Managing Member may designate separate categories of Fund Net
Income (Loss) as it may

 

5

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

determine in its sole discretion.

“GAAP” has the meaning set forth in Section 5.1(b).

“Holdings” has the meanings set forth in the preamble hereto.

“Incentive Allocation” means the incentive allocations or other
performance-based allocations of net capital appreciation or net profits from
the Funds to the Company pursuant to the applicable Fund Agreements, excluding
any allocations of net capital appreciation or net profits made to the Company
by virtue of its capital invested in such Funds (which capital, for the
avoidance of doubt, shall not include any Incentive Allocation that remains in
the Funds and any related capital appreciation).

“Incompetence” means, with respect to any Member, the determination by the
Managing Member in its sole discretion, after consultation with a qualified
medical doctor, that such Member is incompetent to manage his person or his
property.

“Instrument” means (i) capital stock, shares of beneficial interest, warrants,
debt securities, high-yield debt, mezzanine debt, preferred stock, bridge
equity, loans (including participations in loans), bonds, notes (including
senior notes and B-notes), debentures, whether subordinated, convertible or
otherwise, mutual funds, partnership interests and similar financial
instruments, money market funds, commercial paper, certificates of deposit, bank
debt, trade claims, obligations of the United States, any State thereof, any
non-U.S. government or international agency and instrumentalities of any of
them, bankers’ acceptances, trust receipts and other obligations, and
instruments or evidences of indebtedness commonly referred to as securities of
whatever kind or nature, in each case, of any person, corporation, partnership,
trust, government or entity whatsoever, whether or not publicly traded or
readily marketable, (ii) in rights, options and derivative instruments relating
thereto, whether or not publicly traded or readily marketable and (iii) in
forward contracts, derivative instruments, futures, “spot” transactions, hedging
transactions and swap arrangements involving one or more stocks, bonds, loans,
physical commodities, stock or other indexes, financial instruments, interest
rates and currencies.

“Interest” means a limited liability company interest (as defined in § 18-101(8)
of the LLC Act) in the Company, including those which are held by a Retaining
Withdrawn Member.

“Investment Manager” means Blackstone Real Estate Special Situations Advisors
L.L.C., a Delaware limited liability company.

“Investor Note” means a promissory note of a Member evidencing indebtedness
incurred by such Member to the Lender or Guarantor for the purpose of financing
the purchase of an Interest in the Company and/or the amount of one or more
capital contributions to the Company, which is secured by such Interest, all
other Interests of such Member in the Company (if any), in each case on terms
which were or are approved by the Managing Member; provided, that such
promissory note may also evidence indebtedness relating to interests in BFREP,
BFIP, BFMEZP and BFCOMP, in which case, such indebtedness shall also be secured
by interests of such Member in BFREP, BFIP, BFMEZP and BFCOMP, in each case on
terms which were or are approved by the Managing Member. Such indebtedness shall
be prepayable as provided in the Investor Note, any security agreement related
thereto and, if applicable, the BFREP Agreements, BFIP Agreements, BFMEZP
Agreements and BFCOMP Agreements and any documentation related thereto.
References to “Investor Notes” herein may refer to multiple loans made pursuant
to such promissory note, whether made with respect to such Member’s Interest(s)
in the Company or BFREP Investments, BFIP Investments, BFMEZP Investments or
BFCOMP Investments, and references to an “Investor Note” refer to one such loan
as the context requires. In no way shall any indebtedness incurred to acquire
Interests in the Company, and, if

 

6

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

applicable, interests in BFREP, BFIP, BFMEZP or BFCOMP be considered part of the
Investor Notes for purposes hereof if the Lender or Guarantor is not the lender
or guarantor with respect thereto.

“Lender or Guarantor” means Blackstone, in its capacity as lender or guarantor
under the Investor Notes, including any Affiliate of the Company that makes or
guarantees loans to enable a Member to acquire an Interest in the Company or
interests in BFREP, interests in BFIP, interests in BFMEZP or interests in
BFCOMP.

“LLC Act” means the Delaware Limited Liability Company Act, 6 Del.C. § 18-101,
et seq. as it may be amended from time to time, and any successor to such
statute.

“Losses” has the meaning set forth in Section 3.5(b).

“Majority in Interest of the Members” on any date (a “vote date”) means one or
more persons who are Members (including the Managing Member but excluding
Nonvoting Special Members) on the vote date and who, as of the last day of the
most recent accounting period ending on or prior to the vote date (or as of such
later date on or prior to the vote date selected by the Managing Member), have
aggregate Profit Sharing Percentages representing at least a majority of the
Profit Sharing Percentages of all the persons who are Members (including the
Managing Member but excluding Nonvoting Special Members) on the vote date.

“Managing Member” has the meaning set forth in the preamble hereto.

“Member” means any person who is a member of the Company, including the Regular
Members, the Managing Member and the Special Members. Except as otherwise
specifically provided herein, no group of Members, including the Special Members
and any group of Members in the same Member Category, shall have any right to
vote as a class on any matter relating to the Company, including, but not
limited to, any merger, reorganization, dissolution or liquidation.

“Member Category” means the Managing Member, the Regular Members, the Special
Members or the Retaining Withdrawn Members, each referred to as a group for
purposes hereof.

“Net Income (Loss)” has the meaning set forth in Section 5.1(a).

“Non-Contingent” means generally not subject to repurchase rights or other
requirements.

“Nonvoting Special Member” has the meaning set forth in Section 6.1(a).

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

“Other Net Income (Loss)” for any accounting period means the net income or net
loss of the Company for such accounting period as determined on an accrual basis
after deduction for expenses of the Company, in accordance with GAAP, excluding
(i) Fund Net Income (Loss) and (ii) any net income (loss) relating to the
Incentive Allocation allocable to the Company from the Funds in accordance with
the applicable Fund Agreements. The Managing Member may designate separate
categories of Other Net Income (Loss) as it may determine in its sole
discretion.

“Pass-Thru Member” has the meaning set forth in Section 6.7(c).

 

7

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

“Person” means any individual, partnership, joint venture, corporation, limited
liability company, unincorporated organization or association, trust (including
the trustees thereof in their capacity as such), government (or agency or
subdivision thereof), governmental entity or other entity.

“Profit Sharing Percentage” means, with respect to any Member, such Member’s
percentage interest in Net Income (Loss) or any category thereof (including,
without limitation, Fund Net Income (Loss), Other Net Income (Loss) and the
Incentive Allocation), as determined by the Managing Member and set forth on the
books and records of the Company, as such Profit Sharing Percentage may be
modified from time to time in accordance herewith. Separate Profit Sharing
Percentages may be established for each Member with respect to each separate
category of Net Income (Loss).

“Positive Basis” has the meaning set forth in Section 6.7(b).

“Positive Basis Member” has the meaning set forth in Section 6.7(b).

“Regular Member” means any Member, excluding the Managing Member and any Special
Members.

“Regulations” means the U.S. Treasury regulations promulgated under the Code.

“Repurchase Period” has the meaning set forth in Section 5.7(c).

“Retaining Withdrawn Member” means a Withdrawn Member who has retained an
Interest in the Company following such Withdrawn Member’s Withdrawal Date. A
Retaining Withdrawn Member shall be considered a Nonvoting Special Member for
all purposes hereof.

“Settlement Date” has the meaning set forth in Section 6.5(a).

“Special Investments” has the meaning set forth in Section 4.04(a) of the
Delaware Fund Partnership Agreement.

“Special Investment Account” has the meaning set forth in Section 4.02(a) of the
Delaware Fund Partnership Agreement.

“Special Member” means any person shown on the books and records of the Company
as a Special Member of the Company.

“Tax Matters Member” has the meaning set forth in Section 6.7(c).

“TM” has the meaning set forth in Section 7.2.

“Total Disability” means the inability of a Member substantially to perform the
services required of a Regular Member for a period of six consecutive months by
reason of physical or mental illness or incapacity and whether arising out of
sickness, accident or otherwise.

“Unallocated Percentage” has the meaning set forth in Section 5.3(b).

“Valuation Agent” has the meaning set forth in Section 4.06(c) of the Delaware
Fund Partnership Agreement.

“Withdraw” or “Withdrawal” with respect to a Member means a Member ceasing to be
a member of the Company (except as a Retaining Withdrawn Member) for any reason
(including death,

 

8

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

Total Disability, Incompetence, removal, resignation or retirement, whether such
is voluntary or involuntary) unless the context shall limit the type of
withdrawal to a specific reason and “Withdrawn” with respect to a Member means,
as aforesaid, a Member who has ceased to be a member of the Company (except as a
Retaining Withdrawn Member).

“Withdrawal Date” means, with respect to any Withdrawn Member, the date on which
such Withdrawn Member ceases to be a Member of the Company.

“Withdrawn Member” means a Member whose Interest in the Company has been
terminated for any reason.

Section 1.2 Terms Generally. The definitions in Section 1.1 shall apply equally
to both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The term “person” includes individuals, partnerships (including
limited liability partnerships), companies (including limited liability
companies), joint ventures, corporations, trusts, governments (or agencies or
political subdivisions thereof) and other associations and entities. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”

ARTICLE II

GENERAL PROVISIONS

Section 2.1 Managing, Regular and Special Members. The Members may be Managing
Members, Regular Members or Special Members. The Managing Member as of the date
hereof is Holdings and the Regular Members as of the date hereof are those
persons shown as Regular Members in the books and records of the Company, and
the Special Members as of the date hereof are persons shown as Special Members
on the signature pages hereof.

Section 2.2 Continuation; Name; Foreign Jurisdictions. The Company was
heretofore formed as a limited liability company pursuant to the LLC Act to
conduct its activities under the name of Blackstone Real Estate Special
Situations Associates L.L.C. The certificate of formation of the Company may be
amended and/or restated from time to time by the Managing Member, as an
“authorized person” (within the meaning of the LLC Act). The Managing Member is
further authorized to deliver and file any other certificates (and any
amendments and/or restatements thereof) necessary for the Company to qualify to
do business in a jurisdiction in which the Company may wish to conduct business.

Section 2.3 Term. The term of the Company began on the date the Certificate of
Formation of the Company was filed and shall continue unless and until
terminated as provided herein.

Section 2.4 Purpose; Powers. (a) The purpose of the Company shall be, directly
or indirectly through subsidiaries or Affiliates, (i) to serve as general
partner of the Funds and perform the functions of a general partner specified in
the applicable Fund Agreements, (ii) to serve as a general partner and/or
limited partner of other partnerships and/or as a member of one or more limited
liability companies, (iii) to invest in, and acquire limited partnership
interests, limited liability company interests and/or other equity interests in,
and/or securities of, any one or more limited partnerships, limited liability
companies and/or other entities, and/or receive allocations, fees, distributions
and other payments from any one more

 

9

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

of such limited partnerships, limited liability companies and/or other entities,
in each case as the Managing Member shall determine, (iv) to carry on such other
businesses, perform such other services and make such other investments as are
deemed desirable by the Managing Member and as are permitted under the LLC Act
and the applicable Fund Agreements, (v) any other lawful purpose, and (vi) to do
all things necessary, desirable, convenient and/or incidental thereto.

(b) In furtherance of its purpose, the Company shall have all powers necessary,
suitable or convenient for the accomplishment of its purposes, alone or with
others, as principal or agent, including the following:

(i) to be and become a general or limited partner of partnerships, a member of
limited liability companies, a holder of common and preferred stock of
corporations and/or an investor in the foregoing entities or other entities, in
connection with the making of investments or the acquisition, holding or
disposition of Instruments or other property or as otherwise deemed appropriate
by the Managing Member in the conduct of the Company’s business, and to take any
action in connection therewith;

(ii) do any and all acts on behalf of the Funds and exercise all rights and
remedies of the Funds with respect to its interest in any Person, firm,
corporation or other entity, including, without limitation, the voting or
lending of Instruments, participation in arrangements with creditors, the
institution and settlement or compromise of suits and administrative proceedings
and other similar matters;

(iii) acquire a long position or a short position with respect to any Instrument
and make purchases or sales increasing, decreasing or liquidating such position
or changing from a long position to a short position or from a short position to
a long position, without limitation as to the frequency of the fluctuation in
such positions or as to the frequency of the changes in the nature of such
positions;

(iv) purchase Instruments and hold them for investment;

(v) enter into contracts for or in connection with investments in Instruments
(including with respect to foreign exchange transactions, hedging transactions
and/or transactions relating to derivative Instruments);

(vi) determine the valuation of investments and, when deemed appropriate,
consult with the Valuation Agent with respect thereto;

(vii) enter into joint venture arrangements, co-invest with third parties or
invest in other pooled investment vehicles, which arrangements or investments
shall be subject in each case to the terms and conditions of the respective
governing document for such transaction, including without limitation, payment
of fees or provision for performance allocations (or similar arrangements) with
respect thereto;

(viii) offer co-investment opportunities to its Affiliates, one or more limited
partners of the Funds, strategic investors or other third parties;

(ix) establish one or more Special Investment Accounts in connection with the
Special Investments of the Funds, each of which shall be so denominated on the
books of the Funds;

 

10

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

(x) combine purchase or sale orders on behalf of the Funds, with orders for
other accounts to which the Company or any of its Affiliates may provide
investment services and allocate the Instruments or other assets so purchased or
sold, on an average price basis or by any other method of equitable allocation,
among such accounts;

(xi) borrow monies, on a secured or unsecured basis, from brokers, banks, and
any other parties, which may include the Company its Affiliates, for any purpose
including, without limitation, to increase investment capacity, make capital
commitments, cover expenses, fund withdrawals or distributions, facilitate
investments or cash management, raise monies or utilize any other form of
leverage, make guaranties and loans to any Person, pledge the obligations of the
partners of the Funds, to make capital contributions, issue, accept, endorse and
execute promissory notes, drafts, bills of exchange, warrants, bonds, debentures
and other negotiable or non-negotiable instruments and evidences of indebtedness
and grant or issue guaranties; provided, that any borrowing from the Company or
its Affiliates shall be on arm’s length and commercially reasonable terms;

(xii) appoint and enter into a contract with any Person, including the
Investment Manager, to do any and all acts and exercise all rights, powers,
privileges and other incidents of ownership or possession with respect to
Instruments and other property and funds held or owned by the Funds;

(xiii) open, maintain and close accounts with brokers, dealers and custodians,
which power shall include the authority to issue all instructions and
authorizations to brokers, dealers and custodians regarding Instruments and
money therein and to pay, or authorize the payment and reimbursement of,
brokerage commissions (that may be in excess of the lowest rates available),
which are paid to brokers who execute transactions for the account of the Funds,
who supply or pay the cost of research and brokerage services; provided, that
the Company determines in good faith that such amount of commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker, viewed in terms of either that particular transaction
or its overall responsibilities with respect to the accounts as to which the
Company exercises investment discretion, and that such services would benefit
the Funds;

(xiv) use “soft dollars” generated by the Funds, to the extent permitted by
applicable law to pay for certain research and non-research-related services and
products used by the Company and the Investment Manager within the safe harbor
afforded by Section 28(e) of the Exchange Act;

(xv) open maintain and close bank accounts and draw and authorize checks, wire
transfers or other orders for the payment of monies;

(xvi) enter into custodial arrangements regarding the Instruments and other
assets owned beneficially by the Funds with banks, brokers and other financial
institutions, wherever located;

(xvii) enter into arrangements with placement agents or similar persons to
solicit investors in the Funds which arrangements may provide for the
compensation of such placement agents in return for services rendered;

(xviii) transfer or otherwise deal in, and to exercise all rights, powers,
privileges and other incidents of ownership or possession of the Funds with
respect to Instruments and other property and funds held or owned by the Funds
and to secure the payment of such or other

 

11

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

obligations of the Funds by possession of, mortgage upon, hypothecation or
pledge of, or otherwise deal in, all or part of the property of the Funds
whether at the time owned or thereafter acquired;

(xix) organize one or more partnerships or corporations or other entities formed
to hold record title, as nominee for the Funds, otherwise (whether alone or
together with other investment vehicles), to Instruments or funds of the Funds;

(xx) authorize any partner, director, officer, employee or other agent of the
Company, the Investment Manager or agent or employee of the Funds to act for and
on behalf of the Funds in all matters incidental to the foregoing;

(xxi) make, in its sole discretion, any and all elections for U.S. federal,
state, local and non-U.S. tax purposes, including any election to adjust the
basis of the Funds’ property pursuant to Section 754 of the Code;

(xxii) make, execute, deliver, record and file all certificates, instruments,
documents, reports or statements, or any amendment thereto, of any kind
necessary or desirable to accomplish the business, purpose and objectives of the
Funds, in each case as required by any applicable law, agreement or its business
judgment;

(xxiii) do any other act that the Company deems necessary or advisable in
connection with the management and administration of the Funds;

(xxiv) to sue and be sued, to prosecute, settle or compromise all claims against
third parties, to compromise, settle or accept judgment to claims against the
Company, and to execute all documents and make all representations, admissions
and waivers in connection therewith;

(xxv) to distribute, subject to the terms of this Agreement, at any time and
from time to time to the Members cash or investments or other property of the
Company, or any combination thereof; and

(xxvi) to take such other actions necessary, desirable, convenient or incidental
thereto and to engage in such other businesses as may be permitted under
Delaware law.

Section 2.5 Registered Office; Place of Business; Registered Agent. The Company
shall maintain an office and principal place of business at 345 Park Avenue, New
York, New York 10154 or such other place or places as the Managing Member may
designate from time to time. The Company shall maintain a registered office at
The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County
Delaware 19801. The name and address of the Company’s registered agent is The
Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle County
Delaware 19801. The Managing Member may from time to time change the registered
agent or office by an amendment to the certificate of formation of the Company.

ARTICLE III

MANAGEMENT

Section 3.1 Managing Member. (a) Holdings is the Managing Member as of the date
hereof. The Managing Member shall cease to be the Managing Member only if it
(i) Withdraws from the Company for any

 

12

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

reason or (ii) consents in its sole discretion to resign as the Managing Member.
The Managing Member may not be removed without its consent. There may be one or
more Managing Members. In the event that one or more other Managing Members is
admitted to the Company as such, all references herein to the “Managing Member”
in the singular form shall be deemed to also refer to such other Managing
Members as may be appropriate. The relative rights and responsibilities of such
Managing Members will be as agreed upon from time to time between them.

(b) Upon the Withdrawal from the Company or voluntary resignation of the last
remaining Managing Member, all of the powers formerly vested therein pursuant to
this Agreement and the LLC Act shall be exercised by a Majority in Interest of
the Regular Members.

Section 3.2 Member Voting, etc. (a) Except as otherwise expressly provided
herein and except as may be expressly required by the LLC Act, Regular Members
and Special Members as such shall have no right to, and shall not, take part in
the management or control of the Company’s business or act for or bind the
Company, and shall have only the rights and powers granted to them herein.

(b) To the extent a Member is entitled to vote with respect to any matter
relating to the Company, such Member shall not be obligated to abstain from
voting on any matter (or vote in any particular manner) because of any interest
(or conflict of interest) of such Member (or any affiliate thereof) in such
matter.

(c) Meetings of the Members may be called only by the Managing Member.

Section 3.3 Management. (a) The management, control and operation of the Company
and the formulation and execution of business and investment policy shall be
vested in the Managing Member. The Managing Member shall, in its discretion,
exercise all powers necessary and convenient for the purposes of the Company,
including those enumerated in Section 2.4, on behalf and in the name of the
Company. All decisions and determinations (howsoever described herein) to be
made by the Managing Member pursuant to this Agreement shall be made in its
discretion, subject only to the express terms and conditions of this Agreement
(including Section 7.4).

(b) Notwithstanding any provision of this Agreement to the contrary, the Company
is hereby authorized, without the need for any further act, vote or consent of
any Member, (i) to execute and deliver, and to perform the Company’s obligations
under, each agreement of the Company (including, without limitation, the
applicable Fund Agreements), including, without limitation, serving as a general
partner of the Funds, (ii) to execute and deliver, as a general partner of the
Funds, the applicable Fund Agreements, as amended, restated and/or supplemented,
and to perform the Company’s obligations, and to cause the Funds to perform its
obligations, under the applicable Fund Agreements, and (iii) to take any action,
in the applicable capacity, contemplated by or arising out of any applicable
Fund Agreements.

(c) The Managing Member and any other person designated by the Managing Member,
each acting individually, is hereby authorized and empowered, as an authorized
person of the Company within the meaning of the LLC Act, or otherwise (the
Managing Member hereby authorizing and ratifying any of the following actions):

(i) to execute and deliver and/or file (in the name and on behalf of the
Company, and/or in the name and on behalf of the Company as the general partner
of the Funds) any agreement of the Company (including, without limitation, the
applicable Fund Agreements) or of the Funds (including, without limitation, the
applicable Fund Agreements) and any amendments, restatements

 

13

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

and/or supplements thereof, the certificate of formation of the Company or the
certificate of limited partnership of the Company or of the Funds (and any
amendments, restatements and/or supplements of any of the foregoing) and any
other certificates, notices, applications and other documents (and any
amendments, restatements and/or supplements thereof) to be filed with any
government or governmental or regulatory body, including, without limitation,
any such document that may be necessary for the Company or the Funds to qualify
to do business in a jurisdiction in which the Company or the Funds desires to do
business; or

(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or
file (in the name and on behalf of the Company and/or in the name and on behalf
of the Company as the general partner of the Funds), (A) such documents,
instruments, certificates and agreements as may be necessary or desirable in
furtherance of the Company’s or the Funds’ purposes, (B) any certificates,
forms, notices, applications and other documents to be filed with any government
or governmental or regulatory body on behalf of the Company or the Funds,
(C) any certificates, forms, notices, applications and other documents that may
be necessary or advisable in connection with any bank account of the Company or
the Funds, and all checks, notes, drafts and other documents of the Funds that
may be required in connection with any such bank account or any banking
facilities or services that may be utilized by the Company or the Funds,
(D) resolutions with respect to any of the foregoing matters (which resolutions,
when executed by any person authorized as provided in this Section 3.3(c), each
acting individually, shall be deemed to have been adopted by the Members, the
Company or the Funds, as applicable, for all purposes), and (E) any amendments,
restatements and/or supplements of any of the foregoing.

 

     The authority granted to any person (other than the Managing Member) in
this Section 3.3(c) may be revoked at any time by the Managing Member by an
instrument in writing signed by the Managing Member.

Section 3.4 Responsibilities of Members. (a) Unless otherwise determined by the
Managing Member in a particular case, each Regular Member shall devote
substantially all his time and attention to the businesses of the Company and
its Affiliates, and each Special Member shall not be required to devote any time
or attention to the businesses of the Company or its Affiliates.

(b) All outside business or investment activities of the Members (including
outside directorships or trusteeships), shall be subject to such rules and
regulations as are established by the Managing Member from time to time.

(c) The Managing Member may from time to time establish such other rules and
regulations applicable to Members as the Managing Member deems appropriate,
including rules governing the authority of Members to bind the Company to
financial commitments or other obligations.

Section 3.5 Exculpation and Indemnification. (a) Liability to Members.
Notwithstanding any other provision of this Agreement, whether express or
implied, to the fullest extent permitted by law, no Member nor any of such
Member’s representatives, agents or advisors nor any partner, member, officer,
employee, representative, agent or advisor of the Company or any of its
Affiliates (individually, a “Covered Person” and, collectively, the “Covered
Persons”) shall be liable to the Company or any other Member for any act or
omission (in relation to the Company, this Agreement, any related document or
any transaction or investment contemplated hereby or thereby) taken or omitted
by a Covered Person (other than any act or omission constituting Cause) unless
there is a final and non-appealable judicial determination and/or determination
of an arbitrator that such Covered Person did not

 

14

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

act in good faith and in what such Covered Person reasonably believed to be in,
or not opposed to, the best interests of the Company and within the authority
granted to such Covered Person by this Agreement, and, with respect to any
criminal act or proceeding, had reasonable cause to believe that such Covered
Person’s conduct was unlawful. Each Covered Person shall be entitled to rely in
good faith on the advice of legal counsel to the Company, accountants and other
experts or professional advisors, and no action taken by any Covered Person in
reliance on such advice shall in any event subject such person to any liability
to any Member or the Company. To the extent that, at law or in equity, a Member
has duties (including fiduciary duties) and liabilities relating thereto to the
Company or to another Member, to the fullest extent permitted by law, such
Member acting under this Agreement shall not be liable to the Company or to any
such other Member for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they expand or
restrict the duties and liabilities of a Member otherwise existing at law or in
equity, are agreed by the Members, to the fullest extent permitted by law, to
modify to that extent such other duties and liabilities of such Member.

(b) Indemnification. To the fullest extent permitted by law, the Company shall
indemnify and hold harmless (but only to the extent of the Company’s assets
(including, without limitation, the remaining Commitments of the Members) each
Covered Person from and against any and all claims, damages, losses, costs,
expenses and liabilities (including, without limitation, amounts paid in
satisfaction of judgments, in compromises and settlements, as fines and
penalties and legal or other costs and reasonable expenses of investigating or
defending against any claim or alleged claim), joint and several, of any nature
whatsoever, known or unknown, liquidated or unliquidated (collectively,
“Losses”), arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, in which the
Covered Person may be involved, or threatened to be involved, as a party or
otherwise, by reason of such Covered Person’s management of the affairs of the
Company or which relate to or arise out of or in connection with the Company,
its property, its business or affairs (other than claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, arising
out of any act or omission of such Covered Person constituting Cause); provided,
that a Covered Person shall not be entitled to indemnification under this
Section with respect to any claim, issue or matter if there is a final and
non-appealable judicial determination and/or determination of an arbitrator that
such Covered Person did not act in good faith and in what such Covered Person
reasonably believed to be in, or not opposed to, the best interest of the
Company and within the authority granted to such Covered Person by this
Agreement, and, with respect to any criminal act or proceeding, had reasonable
cause to believe that such Covered Person’s conduct was unlawful; provided
further, that if such Covered Person is a Member or a Withdrawn Member, such
Covered Person shall bear its share of such Losses in accordance with such
Covered Person’s Profit Sharing Percentage in the Company as of the time of the
actions or omissions that gave rise to such Losses. To the fullest extent
permitted by law, expenses (including legal fees) incurred by a Covered Person
(including, without limitation, the Managing Member) in defending any claim,
demand, action, suit or proceeding may, with the approval of the Managing
Member, from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Company of a written undertaking by or on behalf of the Covered Person to
repay such amount to the extent that it shall be subsequently determined that
the Covered Person is not entitled to be indemnified as authorized in this
Section, and the Company and its Affiliates shall have a continuing right of
offset against such Covered Person’s interests/investments in the Company and
such Affiliates and shall have the right to withhold amounts otherwise
distributable to such Covered Person to satisfy such repayment obligation. If a
Member institutes litigation against a Covered Person which gives rise to an
indemnity obligation hereunder, such Member shall be responsible, up to the
amount of such Member’s Interests and remaining Commitment, for such Member’s
pro rata share of the Company’s expenses related to such indemnity obligation,
as determined by the Managing Member. The Company may purchase insurance, to the
extent available at reasonable cost, to cover losses, claims, damages or
liabilities covered by the foregoing indemnification provisions. Members will
not be personally obligated with respect to indemnification pursuant to this
Section 3.5(b).

 

15

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

Section 3.6 Representations of Members. (a) Each Regular and Special Member by
execution of this Agreement (or by otherwise becoming bound by the terms and
conditions hereof as provided herein or in the LLC Act) represents and warrants
to every other Member and to the Company, except as may be waived by the
Managing Member, that he is acquiring each of his Interests for his own account
for investment and not with a view to resell or distribute the same or any part
thereof, and that no other person has any interest in any such Interest or in
the rights of such Member hereunder; provided, that a Member may choose to make
transfers for estate and charitable planning purposes (in accordance with the
terms hereof). Each Regular and Special Member represents and warrants that he
understands that the Interests have not been registered under the Securities Act
of 1933, as amended from time to time, and therefore such Interests may not be
resold without registration under such Act or exemption from such registration,
and that accordingly such Member must bear the economic risk of an investment in
the Company for an indefinite period of time. Each Regular and Special Member
represents that he has such knowledge and experience in financial and business
matters, that he is capable of evaluating the merits and risks of an investment
in the Company, and that he is able to bear the economic risk of such
investment. Each Regular and Special Member represents that his overall
commitment to the Company and other investments which are not readily marketable
is not disproportionate to the Member’s net worth and the Member has no need for
liquidity in the Member’s investment in Interests. Each Regular and Special
Member represents that to the full satisfaction of the Member, the Member has
been furnished any materials that he has requested relating to the Company and
the offering of Interests and has been afforded the opportunity to ask questions
of representatives of the Company concerning the terms and conditions of the
offering of Interests and any matters pertaining thereto and to obtain any other
additional information relating thereto. Each Regular and Special Member
represents that the Member has consulted to the extent deemed appropriate by the
Member with the Member’s own advisors as to the financial, tax, legal and
related matters concerning an investment in Interests and on that basis believes
that an investment in the Interests is suitable and appropriate for the Member.

(b) Each Regular and Special Member agrees that the representations and
warranties contained in paragraph (a) above shall be true and correct as of any
date that such Member makes a capital contribution to the Company, and such
Member hereby agrees that such capital contribution shall serve as confirmation
thereof.

(c) Each Regular or Special Member certifies that (A) if such Member is a United
States person (as defined in Section 7701 of the Code) (x) such Member’s name,
social security number (or, if applicable, employer identification number) and
residence address (if an individual) or principal place of business address (if
an entity) provided to the Company and its Affiliates pursuant to an IRS Form
W-9, Request for Taxpayer Identification Number and Certification (“W-9”) or
otherwise are correct, (y) such Member will complete and return a W-9, and
(z) such Member will notify the Company within 60 days of a change to foreign
(non-United States) status or (B) if such Member is not a United States person
(as defined in Section 7701 of the Code) (x) the information on the completed
IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United
States Tax Withholding (“W-8BEN”) or other applicable form, including but not
limited to IRS Form W-8IMY, Certificate of Foreign Intermediary, Foreign
Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding
(“W-8IMY”), or otherwise is correct, (y) the Member will complete and return the
applicable IRS form, including but not limited to a W-8BEN or W-8IMY and
(z) such Member will notify the Company within 60 days of any change of such
status. Each Regular or Special Member agrees to properly execute and provide to
the Company in a timely manner any tax documentation that may be reasonably
required by the Managing Member.

 

16

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

ARTICLE IV

CAPITAL OF THE COMPANY

Section 4.1 Capital Contributions by Members. (a) Each Regular Member may be
required to make capital contributions to the Company at such times and in such
amounts as may be determined by the Managing Member from time to time or as may
be set forth in such Regular Member’s Admission Letter. Special Members shall
not be required to make capital contributions to the Company except as
specifically set forth in this Agreement or as they otherwise agree; provided,
that the Managing Member and any Special Member may agree from time to time that
such Special Member shall make an additional capital contribution to the
Company.

(b) Each capital contribution by a Member shall be credited to the appropriate
Capital Account(s) of such Member in accordance with Section 5.2 and maintained
in the books and records of the Company.

(c) The Managing Member may elect on a case-by-case basis with respect to any
Member (including any additional Member admitted to the Company pursuant to
Section 6.1 but excluding any Member that is also an executive officer of
Blackstone) to (i) cause the Company to loan to any such Member the amount of
any capital contribution to the Company by such Member on terms determined by
the Managing Member, (ii) permit any such Member to make a required capital
contribution to the Company in installments on terms determined by the Managing
Member or (iii) permit any such Member to incur indebtedness to the Lender or
Guarantor for the purpose of financing the purchase of an Interest in the
Company and/or the amount of one or more capital contributions to the Company,
which indebtedness shall be evidenced by an Investor Note and secured by such
Interest, all other Interests of such Member in the Company (if any) and, if
applicable, interests of such Member in BFREP, BFIP, BFMEZP and BFCOMP, in each
case on terms which were or are approved by the Managing Member.

Section 4.2 Interest. There shall be no interest on the balances of the Members’
Capital Accounts.

Section 4.3 Partial Withdrawals of Capital. Each Member may make partial
withdrawals in respect of such Member’s Capital Account(s) in such amounts and
at such times as may be permitted by the Managing Member from time to time.
Payments with respect to any such partial withdrawals will be made at such times
and in cash or in kind as may be determined by the Managing Member.

ARTICLE V

PARTICIPATION IN PROFITS AND LOSSES

Section 5.1 General Accounting Matters. (a) Net Income (Loss) shall be
determined by the Managing Member at the end of each accounting period and shall
be allocated as described in Section 5.4. “Net Income (Loss)” means, with
respect to any accounting period, the sum of: (i) Fund Net Income (Loss) for
such period, (ii) Other Net Income (Loss) for such period, and (iii) the
Incentive Allocation for such period. The

 

17

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

Managing Member may from time to time (i) establish additional separate
categories of Net Income (Loss) with respect to the Company as it may determine
(including, without limitation, Net Income (Loss) relating to Special
Investments by the Funds) and (ii) calculate and allocate Net Income (Loss) for
each such category on a separate basis.

(b) Net Income (Loss) with respect to any accounting period shall be determined
in accordance with the accounting method used by the Company for U.S. federal
income tax purposes with the following adjustments: (i) any income of the
Company that is exempt from U.S. federal income taxation and not otherwise taken
into account in computing Net Income (Loss) shall be added to such taxable
income or loss; (ii) if any asset has a value on the books of the Company that
differs from its adjusted tax basis for U.S. federal income tax purposes, any
depreciation, amortization or gain resulting from a disposition of such asset
shall be calculated with reference to such value; (iii) upon an adjustment to
the value of any asset on the books of the Company pursuant to Regulation
Section 1.704-1 (b) (2), the amount of the adjustment shall be included as gain
or loss in computing such taxable income or loss; (iv) any expenditures of the
Company not deductible in computing taxable income or loss, not properly
capitalizable and not otherwise taken into account in computing Net Income
(Loss) pursuant to this definition shall be treated as deductible items; (v) any
income that is payable to Company employees in respect of “phantom interests”
awarded by the Managing Member to employees shall be included as an expense in
the calculation of Net Income (Loss), and (vi) items of income and expense
(including interest income and overhead and other indirect expenses) of the
Company, Holdings and other Affiliates of the Company shall be allocated among
the Company, Holdings and such Affiliates as determined by the Managing Member.
Any adjustments to Net Income (Loss) by the Managing Member, including
adjustments for items of income accrued but not yet received, unrealized gains,
items of expense accrued but not yet paid, unrealized losses, reserves
(including reserves for taxes, bad debts, actual or threatened litigation, or
any other expenses, contingencies or obligations) and other appropriate items
shall be made in accordance with U.S. generally accepted accounting principles
(“GAAP”); provided, that the Managing Member shall not be required to make any
such adjustments; provided further, that the Managing Member may elect from time
to time to calculate and allocate Net Income (Loss) attributable to any item of
income or expense or any investment of the Company on a basis separate from the
Company’s other business.

(c) An accounting period shall be a Fiscal Year, except that, at the option of
the Managing Member, an accounting period will terminate and a new accounting
period will begin on the admission date of an additional Member or the
Withdrawal Date of a Withdrawn Member, if any such date is not the first day of
a Fiscal Year, or on any other date determined by the Managing Member in its
sole discretion. If any event referred to in the preceding sentence occurs and
the Managing Member does not elect to terminate an accounting period and begin a
new accounting period, then the Managing Member may make such adjustments as its
deems appropriate to the Members’ Profit Sharing Percentages for the accounting
period in which such event occurs (prior to any allocations of Unallocated
Percentages or adjustments to Profit Sharing Percentages pursuant to
Section 5.3) to reflect the Members’ average Profit Sharing Percentages during
such accounting period.

(d) In establishing Profit Sharing Percentages and allocating Unallocated
Percentages (if any) pursuant to Section 5.3, the Managing Member may consider
such factors as it deems appropriate.

(e) All determinations, valuations and other matters of judgment required to be
made for accounting purposes under this Agreement shall be made by the Managing
Member and approved by the Company’s independent accountants. Such approved
determinations, valuations and other accounting matters shall be conclusive and
binding on all Members, all Withdrawn Members, their successors, heirs, estates
or legal representatives and any other person, and to the fullest extent
permitted

 

18

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

by law, no such person shall have the right to an accounting or an appraisal of
the assets of the Company or any successor thereto.

Section 5.2 Capital Accounts.

(a) There shall be established for each Member on the books of the Company, to
the extent and at such times as may be appropriate, one or more Capital Accounts
as the Managing Member may deem to be appropriate for purposes of accounting for
such Member’s interests in the capital and Net Income (Loss) of the Company. A
separate Capital Account shall be established for each Member with respect to
Fund Net Income (Loss), Other Net Income (Loss) and the Incentive Allocation. In
addition, the Managing Member may also establish separate Capital Accounts for
each Member with respect to any other categories of Net Income (Loss) (if any)
(including, without limitation, Net Income (Loss) relating to Special
Investments by the Funds) as it may determine in its sole discretion.

(b) As of the end of each accounting period or, in the case of a capital
contribution to the Company by one or more of the Members or a distribution by
the Company to one or more of the Members, at the time of such contribution or
distribution, (i) the appropriate Capital Accounts of each Member shall be
credited with the following amounts: (A) the amount of cash and the value of any
property contributed by such Member to the capital of the Company during such
accounting period and (B) the Net Income allocated to such Member for such
accounting period; and (ii) the appropriate Capital Accounts of each Member
shall be debited with the following amounts: (x) the amount of cash, the
principal amount of any subordinated promissory note of the Company referred to
in Section 6.5 (as such amount is paid) and the value of any property
distributed to such Member during such accounting period and (y) the Net Loss
allocated to such Member for such accounting period.

Section 5.3 Profit Sharing Percentages

(a) Prior to the beginning of each annual accounting period, the Managing Member
shall establish the profit sharing percentage (the “Profit Sharing Percentage”)
of each Member in each category of Net Income (Loss) for such annual accounting
period pursuant to Section 5.1(a), taking into account such factors as the
Managing Member deems appropriate, including those referred to in Section 5.1.
The Managing Member may establish different Profit Sharing Percentages for any
Member on a Fund-by-Fund basis with respect to each different category of Net
Income (Loss) for each such Fund (including, without limitation, Fund Net Income
(Loss), Other Net Income (Loss) and the Incentive Allocation) as it may
determine in its sole discretion; provided, that each Member’s Profit Sharing
Percentage with respect to Fund Net Income (Loss) shall be based on such
Member’s Capital Account balance in such Member’s Fund Net Income (Loss) Capital
Account as it relates to the aggregate Fund Net Income (Loss) Capital Account
balances of all Members. In the case of the Withdrawal of a Member, such
Withdrawn Member’s Profit Sharing Percentage shall be allocated by the Managing
Member to one or more of the Members in its sole discretion. Except as may be
otherwise determined by the Managing Member, in the case of the admission of any
Member to the Company as an additional Member, the Profit Sharing Percentages of
the other Members shall be reduced on a pro rata basis (based on such Members’
respective Profit Sharing Percentages in effect immediately prior to such
admission) by an amount equal to the Profit Sharing Percentage allocated to such
new Member pursuant to Section 6.1(b). Notwithstanding the foregoing, the
Managing Member may also adjust the Profit Sharing Percentage of any Member for
any annual accounting period at the end of such annual accounting period in its
sole discretion.

(b) The Managing Member may elect to allocate to the Members less than 100% of
the Profit Sharing Percentages of any category for any annual accounting period
at the time specified in Section 5.3(a) for the annual fixing of Profit Sharing
Percentages (any remainder of such

 

19

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

Profit Sharing Percentages being called an “Unallocated Percentage”). Any
Unallocated Percentage for any annual accounting period may be allocated by the
Managing Member at such later times and to such Members as the Managing Member
shall determine; provided, that any Unallocated Percentage in any category of
Net Income (Loss) for any annual accounting period that is not allocated by the
Managing Member within 90 days after the end of such accounting period shall be
deemed to be allocated among all Members (including the Managing Member) with
previously allocated Profit Sharing Percentages in such category of Net Income
(Loss) proportionately in accordance with such previously allocated Profit
Sharing Percentages.

Section 5.4 Allocations of Net Income (Loss). Except as otherwise provided in
this Agreement, Net Income (Loss) and, to the extent necessary, individual
categories thereof or components of income, gain, loss or deduction, of the
Company shall be allocated among the Members in a manner that as closely as
possible gives economic effect to the provisions of this Article V and the other
relevant provisions of this Agreement, as determined in the reasonable
discretion of the Managing Member.

Section 5.5 Liability of Members. Except as otherwise provided in the LLC Act,
no Member shall be personally obligated for any debt, obligation or liability of
the Company or of any other Member solely by reason of being a Member. In
addition, in no way does any of the foregoing limit any Member’s obligations to
make capital contributions as provided hereunder.

Section 5.6 Repurchase Rights, etc. The Managing Member may from time to time
establish such repurchase rights and/or other requirements with respect to the
Members’ Interests in the Company as the Managing Member may determine. The
Managing Member shall have authority to (a) withhold any distribution otherwise
payable to any Member until any such repurchase rights have lapsed or any such
requirements have been satisfied, (b) pay any distribution to any Member that is
Contingent as of the distribution date and require the refund of any portion of
such distribution that is Contingent as of the Withdrawal Date of such Member,
(c) amend any previously established repurchase rights or other requirements
from time to time and (d) make such exceptions thereto as it may determine on a
case by case basis.

Section 5.7 Distributions. (a) The Company shall make distributions of available
cash (subject to reserves and other adjustments as provided herein) or other
property to the Members at such times and in such amounts as are determined by
the Managing Member. The Managing Member shall, if it deems it appropriate,
determine the availability for distribution of, and distribute, cash or other
property separately for each category of Net Income (Loss) established pursuant
to Section 5.1(a). Subject to Section 5.1(d), distributions of cash or other
property with respect to Incentive Allocation shall be made among Members in
accordance with their respective Profit Sharing Percentages with respect
thereto. At any time that a sale, exchange, transfer or other disposition by the
Funds of a portion of a Special Investment is being considered by the Company (a
“Disposable Special Investment”), at the election of the Managing Member each
Member’s Interest with respect to such Special Investment shall be vertically
divided into two separate Member Interests, an Interest attributable to the
Disposable Special Investment (a Member’s “Class B Interest”), and an Interest
attributable to such Special Investment excluding the Disposable Special
Investment (a Member’s “Class A Interest”). Distributions (including those
resulting from a sale, transfer, exchange or other disposition by the Funds)
relating to a Disposable Special Investment shall be made only to holders of
Class B Interests with respect to such Special Investment in accordance with
their Profit Sharing Percentages relating to such Class B Interests, and
distributions (including those resulting from the sale, transfer, exchange or
other disposition by the Funds) relating to a Special Investment excluding such
Disposable Special Investment shall be made only to holders of Class A Interests
with respect to such Special Investment in accordance with their respective
Profit Sharing Percentages relating

 

20

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

to Class A Interests. Except as provided above, distributions of cash or other
property with respect to each category of Net Income (Loss) shall be allocated
among the Members in the same proportions as the allocations of Net Income
(Loss) of each such category.

(b) Subject to the Company’s having sufficient available cash in the reasonable
judgment of the Managing Member, the Company shall make cash distributions to
each Member with respect to each Fiscal Year of the Company in an aggregate
amount at least equal to the total federal, New York state and New York city
income taxes that would be payable by such Member with respect to all categories
of Net Income (Loss) allocated to such Member for such Fiscal Year, the amount
of which shall be calculated (i) on the assumption that each Member is an
individual subject to the then prevailing maximum federal, New York state and
New York city income tax rates, (ii) taking into account the deductibility of
state and local income and other taxes for federal income tax purposes and
(iii) taking into account any differential in applicable rates due to the type
and character of Net Income (Loss) allocated to such Member and (iv) taking into
account any other distribution made to such Member under this Agreement during
such Fiscal Year. Notwithstanding the foregoing, the Managing Member may refrain
from making any such distribution if, in the reasonable judgment of the Managing
Member, such distribution would be prohibited by § 18-607 of the LLC Act.

(c) The Managing Member may provide that a Member’s right to distributions and
investments of the Company may be subject to repurchase by the Company during
such period as the Managing Member shall determine (a “Repurchase Period”). Any
Contingent distributions from investments subject to repurchase rights will be
withheld by the Company and will be distributed to the recipient thereof
(together with interest thereon at rates determined by the Managing Member from
time to time) as the recipient’s rights to such distributions become
Non-Contingent (by virtue of the expiration of the applicable Repurchase Period
or otherwise). The Managing Member may elect in an individual case to have the
Company distribute any Contingent distribution to the applicable recipient
thereof irrespective of whether the applicable Repurchase Period has lapsed. If
a Member withdraws from the Company for any reason other than his death, Total
Disability or Incompetence, the undistributed share of such Member’s Interest
that remains Contingent as of the applicable Withdrawal Date shall be
repurchased by the Company at a purchase price determined at such time by the
Managing Member. Unless determined otherwise by the Managing Member, the
repurchased portion thereof will be allocated among the remaining Members in
proportion to their respective Profit Sharing Percentages with respect thereto.

Section 5.8 Business Expenses. The Company shall reimburse the Members for
reasonable travel, entertainment and miscellaneous expenses incurred by them in
the conduct of the Company’s business in accordance with rules and regulations
established by the Managing Member from time to time.

ARTICLE VI

ADDITIONAL MEMBERS; WITHDRAWAL OF MEMBERS;

SATISFACTION AND DISCHARGE OF

COMPANY INTERESTS; TERMINATION

Section 6.1 Additional Members. (a) Effective on the first day of any month (or
on such other date as shall be determined by the Managing Member in its sole
discretion), the Managing Member shall have the right to admit one or more
additional persons into the Company as Regular Members or Special Members. The
Managing Member shall determine and negotiate with each additional Member all
terms of such additional Member’s participation in the Company, including such
additional Member’s initial capital contribution, Profit Sharing Percentage and
base salary. Each additional Member

 

21

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

shall have such voting rights as may be determined by the Managing Member
unless, upon the admission to the Company of any Special Member, the Managing
Member shall designate that such Special Member shall not have such voting
rights (any such Special Member being called a “Nonvoting Special Member”).

(b) Any Profit Sharing Percentages to be allocated to an additional Member as of
the date such Member is admitted to the Company, together with any pro rata
reduction in all other Members’ Profit Sharing Percentages as of such date,
shall be established by the Managing Member pursuant to Section 5.3.

(c) Each additional Member may be required to contribute to the Company his pro
rata share of the Company’s total capital, at such times and in such amounts as
shall be determined by the Managing Member in accordance with Section 4.1.

(d) The admission of an additional Member will be evidenced by (i) the execution
of a counterpart copy of this Agreement by such additional Member or (ii) the
execution of an amendment to this Agreement by all the Members (including the
additional Member), as determined by the Managing Member.

Section 6.2 Withdrawal of Members. (a) Any Member (other than the Managing
Member) (i) may voluntarily Withdraw from the Company, in whole or in part, at
any time upon at least sixty (60) days’ prior written notice to the Company,
(ii) may be removed from the Company at any time by the Managing Member for any
reason or no reason, (iii) shall be deemed to have withdrawn from the Company
upon such Member’s death, Total Disability or Incompetence, or (iv) shall
automatically be removed from the Company to the extent Cause exists with
respect thereto; provided, that a Member may not voluntarily Withdraw without
the consent of the Managing Member if such Withdrawal would (i) cause the
Company to be in default under any of its contractual obligations or (ii) in the
reasonable judgment of the Managing Member, have a material adverse effect on
the Company or its business; provided further, that to the extent a Withdrawal
relates to a Capital Account relating to an investment of capital in the Funds,
such Withdrawal may only be made to the extent permitted by the applicable Fund
Agreements.

(b) Upon the Withdrawal of any Member, including by the occurrence of any
Withdrawal event under the LLC Act with respect to any Member, such Member shall
thereupon cease to be a Member.

(c) As of the effective date of a Member’s Withdrawal, such Member shall execute
a release in favor of the Company and its Members, releasing the Company and its
Members from all liabilities to the withdrawing Member in such form as
determined by the Managing Member.

(d) If the Managing Member determines that it shall be in the best interests of
the Company for any Member (including any Member who has given notice of
voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the
Company (whether or not Cause exists) with respect to such Member’s Interest,
such Member, upon written notice by the Managing Member to such Member, shall be
required to Withdraw with respect to such Member’s Interest, as determined by
the Managing Member, as of a date specified in such notice, which date shall be
on or after the date of such notice. If the Managing Member requires any Member
to Withdraw for Cause with respect to such Member’s Interest, such notice shall
state that it has been given for Cause and shall describe the particulars
thereof in reasonable detail.

(e) Upon the Total Disability of a Regular Member, such Member shall thereupon
cease to be a Regular Member with respect to such Member’s Interest; provided,
that the

 

22

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

Managing Member may elect to admit such Withdrawn Member to the Company as a
Nonvoting Special Member with respect to such Member’s Interest, with such
Interest as the Managing Member may determine. The determination of whether any
Member has suffered a Total Disability shall be made by the Managing Member in
its sole discretion after consultation with a qualified medical doctor. In the
absence of agreement between the Managing Member and such Member, each party
shall nominate a qualified medical doctor and the two doctors shall select a
third doctor, who shall make the determination as to Total Disability.

(f) The withdrawal from the Company of any Member shall not, in and of itself,
affect the obligations of the other Members to continue the Company during the
remainder of its term.

Section 6.3 Company Interests Not Transferable. No Member may sell, assign,
pledge or otherwise transfer or encumber all or any portion of such Member’s
Interest other than as permitted by written agreement between such Member and
the Company; provided, that this Section 6.3 shall not impair transfers by
operation of law, transfers by will or by other testamentary instrument
occurring by virtue of the death or dissolution of a Member, or transfers
required by trust agreements; provided further, that a Regular Member may
transfer, for estate planning purposes, up to 25% of his Profit Sharing
Percentage to any estate planning trust, limited partnership, or limited
liability company with respect to which a Regular Member controls investments
related to any interest in the Company held therein (an “Estate Planning
Vehicle”). Each Estate Planning Vehicle will be a Nonvoting Special Member. Such
Regular Member and the Nonvoting Special Member shall be jointly and severally
liable for all obligations of both such Regular Member and such Nonvoting
Special Member with respect to the Company, as the case may be. The Managing
Member may at its sole option exercisable at any time require any Estate
Planning Vehicle to withdraw from the Company on the terms of this Article VI.
Except as provided in the second proviso to the first sentence of this
Section 6.3, no assignee, legatee, distributee, heir or transferee (by
conveyance, operation of law or otherwise) of the whole or any portion of any
Member’s Interest shall have any right to be a Member without the prior written
consent of the Managing Member (which consent may be withheld without giving
reason therefor). Notwithstanding the granting of a security interest in the
entire Interest of any Member, such Member shall continue to be a Member of the
Company.

Section 6.4 Consequences upon Withdrawal of a Member. (a) The Withdrawal of a
Regular Member shall not dissolve the Company if at the time of such Withdrawal
there are one or more remaining Regular Members and any one or more of such
remaining Regular Members continue the business of the Company (any and all such
remaining Regular Members being hereby authorized to continue the business of
the Company without dissolution and hereby agreeing to do so). Notwithstanding
Section 6.4(b), if upon the Withdrawal of a Regular Member there shall be no
remaining Regular Member, the Company shall be dissolved and shall be wound up
unless, within 90 days after the occurrence of such Withdrawal, all remaining
Special Members agree in writing to continue the business of the Company and to
the appointment, effective as of the date of such Withdrawal, of one or more
Regular Members.

(b) The Company shall not be dissolved, in and of itself, by the Withdrawal of
any Member, but shall continue with the surviving or remaining Members as
members thereof in accordance with and subject to the terms and provisions of
this Agreement.

Section 6.5 Satisfaction and Discharge of a Withdrawn Member’s Interest. (a) The
terms of this Section 6.5 shall apply to the Interest of a Withdrawn Member. The
term “Settlement Date” shall mean the date as of which a Withdrawn Member’s
Interest in the Company is settled as determined under paragraph (b) below.

 

23

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

(b) Except where a later date for the settlement of a Withdrawn Member’s
Interest in the Company may be agreed to by the Managing Member and a Withdrawn
Member, a Withdrawn Member’s Settlement Date shall be his Withdrawal Date;
provided, that if a Withdrawn Member’s Withdrawal Date or Settlement Date is not
the last day of a month, then the Managing Member may elect in its discretion
for the Withdrawal Date or the Settlement Date to be the last day of the month
following the Withdrawal Date or Settlement Date as the case may be. During the
interval, if any, between a Withdrawn Member’s Withdrawal Date and Settlement
Date, such Withdrawn Member shall have the same rights and obligations with
respect to capital contributions, interest on capital, allocations of Net Income
(Loss) and distributions as would have applied had such Withdrawn Member
remained a Member of the Company during such period.

(c) In the event of the Withdrawal of a Member, the Managing Member shall
promptly after such Withdrawn Member’s Settlement Date (i) determine and
allocate to the Withdrawn Member’s Capital Account such Withdrawn Member’s
allocable share of the Net Income (Loss) of the Company for the period ending on
such Settlement Date in accordance with Article V and (ii) credit the Withdrawn
Member’s Capital Account with interest in accordance with Section 5.2. In making
the foregoing calculations, the Managing Member shall be entitled to establish
such reserves (including reserves, taxes, bad debts, unrealized losses, actual
or threatened litigation or any other expenses, contingencies or obligations) as
it deems appropriate. Except as provided in Section 6.5(c) and unless otherwise
determined by the Managing Member in a particular case, a Withdrawn Member shall
not be entitled to receive any amounts or Unallocated Percentage in respect of
the accounting period during which such Member Withdraws from the Company
(whether or not previously awarded or allocated) or any amounts or Unallocated
Percentage in respect of prior accounting periods that have not been paid or
allocated (whether or not previously awarded) as of such Withdrawn Member’s
Withdrawal Date.

(d) From and after the Settlement Date of a Withdrawn Member, such Member’s
Profit Sharing Percentage in respect of the various categories of Net Income
(Loss) of the Company (other than the category of Net Income (Loss) relating to
Special Investments as provided in Section 6.5(f)) shall be reduced to zero (or
in the case of a partial Withdrawal, shall be reduced pro rata based on the
Profit Sharing Percentage represented by the withdrawn Interest as related to
the aggregate Profit Sharing Percentage of the relevant Member), and (i) the
Profit Sharing Percentage of all of the remaining Members shall be adjusted pro
rata to their respective Profit Sharing Percentages at such time or (ii) such
Profit Sharing Percentages shall become Unallocated Percentages, in each case,
as determined by the Managing Member in its sole discretion.

(e) (i) Upon the Withdrawal from the Company of a Member, such Withdrawn Member
thereafter shall not, except as expressly provided in this Section 6.5, have any
rights of a Member (including voting rights), and, except as expressly provided
in this Section 6.5, such Withdrawn Member shall not have any interest in any
category of the Company’s Net Income (Loss) (including, without limitation, Fund
Net Income (Loss), Other Net Income (Loss) or the Incentive Allocation) or in
distributions, investments or other assets related to such Member’s Interest. If
a Member Withdraws from the Company for any reason other than for Cause, then
the Withdrawn Member shall be entitled to receive, at the time or times
specified in Section 6.5(h) below, in satisfaction and discharge in full of the
Withdrawn Member’s Interest in the Company, (x) payment equal to the aggregate
positive balance, if any, as of the Settlement Date of the Withdrawn Member’s
Capital Account (or portion thereof, as applicable), (excluding any Capital
Account or portion thereof attributable to any Special Investments) and (y) the
Withdrawn Member’s Profit Sharing Percentage in respect of the category of Net
Income (Loss) of the Company established by the Managing Member relating to
Special Investments in which the Withdrawn Member has an interest as of the
Settlement Date as provided in paragraph (f) below (which shall be settled in
accordance with paragraph (f) below), subject to all the terms and conditions of
paragraphs (a)-(p) of this Section 6.5. If the amount determined pursuant to
clause (x) above is an

 

24

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

aggregate negative balance, the Withdrawn Member shall pay the amount thereof to
the Company upon demand by the Managing Member on or after the date of the
statement referred to in Section 6.5(h) below; provided, that if the Withdrawn
Member was solely a Special Member on his Withdrawal Date, such payment shall be
required only to the extent of any amounts payable to such Withdrawn Member
pursuant to this Section 6.5. Any aggregate negative balance in the Capital
Accounts of a Withdrawn Member who was solely a Special Member, upon the
settlement of such Withdrawn Member’s Interest in the Company pursuant to this
Section 6.5, shall be allocated among the other Members’ Capital Accounts in
accordance with their respective Profit Sharing Percentages in the categories of
Net Income (Loss) giving rise to such negative balance as determined by the
Managing Member as of such Withdrawn Member’s Settlement Date. In the settlement
of any Withdrawn Member’s Interest in the Company, no value shall be ascribed to
goodwill, the Company name or in anticipation of any value the Company or any
successor thereto might have in the event the Company or any interest therein
were to be sold in whole or in part.

(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Member
whose Withdrawal with respect to such Member’s Interest resulted from such
Member’s death or Incompetence, such Member’s estate or legal representative, as
the case may be, may elect, at the time described below, to receive a Nonvoting
Special Member Interest and retain such Member’s Profit Sharing Percentage in
the category of Net Income (Loss) established by the Managing Member relating to
Special Investments of the Company in lieu of a cash payment (or promissory
note) in settlement of that portion of the Withdrawn Member’s Interest. The
election referred to above shall be made within 60 days after the Withdrawn
Member’s Settlement Date, based on a statement of the settlement of such
Withdrawn Member’s Interest in the Company pursuant to this Section 6.5.

(f) With respect to any Withdrawn Member’s Profit Sharing Percentage relating to
the category of Net Income (Loss) established by the Managing Member for Special
Investments, at the discretion of the Managing Member, such Withdrawn Member may
retain such Profit Sharing Percentage and its Capital Account or portion thereof
attributable to such Special Investments, in which case such Withdrawn Member (a
“Retaining Withdrawn Member”) shall become a Nonvoting Special Member. The
Member Interest of a Retaining Withdrawn Member pursuant to this paragraph
(f) shall be subject to the terms and conditions applicable to Member Interests
of any kind hereunder and such other terms and conditions as are established by
the Managing Member. At the option of the Managing Member in its sole
discretion, the Managing Member and the Retaining Withdrawn Member may agree to
have the Company acquire such Interest without the approval of the other
Members; provided, that the Managing Member shall reflect in the books and
records of the Company the terms of any acquisition pursuant to this sentence.

(g) The Managing Member may elect, in lieu of payment in cash of any amount
payable to a Withdrawn Member pursuant to paragraph (e) above, to have the
Company issue the Withdrawn Member a subordinated promissory note and/or to
distribute in-kind to the Withdrawn Member such Withdrawn Member’s pro rata
share (as determined by the Managing Member) of any securities or other
investments of the Company in relation to such Member’s Interest. If any such
distributions in-kind are made to a Withdrawn Member in respect of its Interest
under this paragraph (g), the amount described in clause (x) of paragraph (e)(i)
shall be reduced by the value of such distribution as valued on the latest
balance sheet of the Company in accordance with generally accepted accounting
principles or, if not appearing on such balance sheet, as reasonably determined
by the Managing Member.

(h) Within 120 days after the Settlement Date, the Managing Member shall submit
to the Withdrawn Member a statement of the settlement of such Withdrawn Member’s
Interest in the Company pursuant to this Section 6.5 together with any cash
payment, subordinated promissory note and in kind distributions to be made to
such Member as shall be determined by the Managing Member.

 

25

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

The Managing Member shall submit to the Withdrawn Member supplemental statements
with respect to additional amounts payable to or by the Withdrawn Member in
respect of the settlement of his Interest in the Company (e.g., payments in
respect of Special Investments pursuant to paragraph (f) above or adjustments to
reserves pursuant to paragraph (i) below) promptly after such amounts are
determined by the Managing Member. To the fullest extent permitted by law, such
statements and the valuations on which they are based shall be accepted by the
Withdrawn Member without examination of the accounting books and records of the
Company or other inquiry. Any amounts payable by the Company to a Withdrawn
Member pursuant to this Section 6.5 shall be subordinate in right of payment and
subject to the prior payment or provision for payment in full of claims of all
present or future creditors of the Company or any successor thereto arising out
of matters occurring prior to the applicable date of payment or distribution;
provided that such Withdrawn Member shall otherwise rank pari passu in right of
payment (x) with all persons who become Withdrawn Members and whose Withdrawal
Date is within one year before the Withdrawal Date of the Withdrawn Member in
question and (y) with all persons who become Withdrawn Members and whose
Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn
Member in question.

(i) If the aggregate reserves established by the Managing Member as of the
Settlement Date in making the foregoing calculations should prove, in the
determination of the Managing Member, to be excessive or inadequate, the
Managing Member may elect, but shall not be obligated, to pay the Withdrawn
Member or his estate such excess, or to charge the Withdrawn Member or his
estate such deficiency, as the case may be.

(j) Any amounts owed by the Withdrawn Member to the Company at any time on or
after the Settlement Date (e.g., outstanding Company loans or advances to such
Withdrawn Member) shall be offset against any amounts payable or distributable
by the Company to the Withdrawn Member at any time on or after the Settlement
Date or shall be paid by the Withdrawn Member to the Company, in each case as
determined by the Managing Member. All cash amounts payable by a Withdrawn
Member to the Company under this Section 6.5 shall bear interest from the due
date to the date of payment at a floating rate equal to the lesser of (x) the
rate of interest publicly announced from time to time by JPMorgan Chase Bank,
N.A., as its prime rate or (y) the maximum rate of interest permitted by
applicable law. The “due date” of amounts payable by a Withdrawn Member pursuant
to Section 6.5(i) above shall be 120 days after a Withdrawn Member’s Settlement
Date. The “due date” of amounts payable to or by a Withdrawn Member in respect
of Special Investments for which the Withdrawn Member has retained a percentage
interest in accordance with paragraph (f) above shall be 120 days after
realization with respect to such Special Investment. The “due date” of any other
amounts payable by a Withdrawn Member shall be 60 days after the date such
amounts are determined to be payable.

(k) At the time of the settlement of any Withdrawn Member’s Interest in the
Company pursuant to this Section 6.5, the Managing Member may, to the fullest
extent permitted by applicable law, impose any restrictions it deems appropriate
on the assignment, pledge, encumbrance or other transfer by such Withdrawn
Member of any Interest retained by such Withdrawn Member, any securities or
other investments distributed in-kind to such Withdrawn Member or such Withdrawn
Member’s right to any payment from the Company.

(l) If a Member is required to Withdraw from the Company with respect to such
Member’s Interest for Cause, then his Member Interest shall be settled in
accordance with paragraphs (a)-(p) of this Section 6.5; provided, however, that
the Managing Member may elect (but shall not be required) to apply any or all
the following terms and conditions to such settlement:

 

26

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

(i) In settling the Withdrawn Member’s Interest in the Company as of the
applicable Settlement Date, the Managing Member may elect to (A) determine the
unrealized Net Income (Loss) attributable to each Special Investment in which
such Member has an interest as of the Settlement Date and allocate to the
appropriate Capital Account of the Withdrawn Member its allocable share of such
unrealized Net Income (Loss) for purposes of calculating the aggregate balance
of such Withdrawn Member’s Capital Account pursuant to clause (x) of paragraph
(e)(i) above, (B) credit or debit, as applicable, the Withdrawn Member with the
balance of his Capital Account or portion thereof attributable to each such
Special Investment as of his Settlement Date without giving effect to the
unrealized Net Income (Loss) from such Special Investment as of its Settlement
Date, which shall be forfeited by the Withdrawn Member or (C) apply the
provisions of paragraph (f) above, provided, that the maximum amount of Net
Income (Loss) allocable to such Withdrawn Member with respect to any Special
Investment shall equal such Member’s percentage interest of the unrealized Net
Income, if any, attributable to such Special Investment as of the Settlement
Date (the balance of such Net Income (Loss), if any, shall be allocated as
determined by the Managing Member). The Withdrawn Member shall not have any
continuing interest in any Special Investment to the extent an election is made
pursuant to (A) or (B) above.

(ii) Any amounts payable by the Company to the Withdrawn Member pursuant to this
Section 6.5 shall be subordinate in right of payment and subject to the prior
payment in full of claims of all present or future creditors of the Company or
any successor thereto arising out of matters occurring prior to or on or after
the applicable date of payment or distribution.

(m) The payments to a Withdrawn Member pursuant to this Section 6.5 may be
conditioned on the compliance by such Withdrawn Member with any lawful and
reasonable (under the circumstances) restrictions against engaging or investing
in a business competitive with that of the Company or any of its subsidiaries
and Affiliates for a period not exceeding two years determined by the Managing
Member. Upon written notice to the Managing Member, any Withdrawn Member who is
subject to noncompetition restrictions established by the Managing Member
pursuant to this paragraph (m) may elect to forfeit the principal amount payable
in the final installment of his subordinated promissory note, together with
interest to be accrued on such installment after the date of forfeiture, in lieu
of being bound by such restrictions; provided that if the principal amount of
such final installment would exceed $10 million, such Withdrawn Member shall be
required to forfeit only $10 million thereof and shall still be entitled to
receive any remaining balance of such final installment as and when due.

(n) In addition to the foregoing, the Managing Member shall have the right to
pay a Withdrawn Member a discretionary additional payment in an amount and based
upon such circumstances and conditions as it determines to be relevant. The
provisions of this Section 6.5 shall apply to any Member relating to a Member
and to any transferee of any interest of such Member pursuant to Section 6.3 if
such Member Withdraws from the Company.

(o) (i) The Company will assist a Withdrawn Member or its estate or guardian, as
the case may be, in the settlement of the Withdrawn Member’s Interest in the
Company. Third party costs incurred by the Company in providing this assistance
will be borne by the Withdrawn Member or its estate.

(ii) The Company may reasonably determine in good faith to retain outside
professionals to provide the assistance to Withdrawn Members or their estates or
guardians, as referred to above. In such instances, the Company will obtain the
prior approval of a Withdrawn Member or his estate or guardian, as the case may
be, prior to engaging such professionals. If the Withdrawn Member (or his estate
or guardian) declines to incur such costs, the Company will provide such

 

27

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

reasonable assistance as and when it can so as not to interfere with the
Company’s day-to-day operating, financial, tax and other related
responsibilities to the Company and the Members.

(p) Each Member hereby irrevocably appoints the Managing Member as such Member’s
true and lawful agent, representative and attorney-in-fact, each acting alone,
in such Member’s name, place and stead, to make, execute, sign and file, on
behalf of such Member, any and all agreements, instruments, consents,
ratifications, documents and certificates which the Managing Member deems
necessary or advisable in connection with any transaction or matter contemplated
by or provided for in this Section 6.5, including, without limitation, the
performance of any obligation of such Member or the Company or the exercise of
any right of such Member or the Company. Such power of attorney is coupled with
an interest and shall survive and continue in full force and effect
notwithstanding the Withdrawal from the Company of any Member for any reason and
shall not be affected by the death, disability or incapacity of such Member.

Section 6.6 Dissolution of the Company. The Managing Member may dissolve the
Company prior to the expiration of its term at any time on not less than 60
days’ notice of the dissolution date given to the other Members. Upon the
dissolution of the Company, and following the payment of creditors of the
Company and the making of provisions for the payment of any contingent,
conditional or unmatured claims known to the Company as required under the LLC
Act, the Members’ respective interests in the Company shall be valued and
settled in accordance with the procedures set forth in Sections 5.7 and 6.5
which provide for allocations to the Capital Accounts of the Members and
distributions in accordance with the Capital Account balances of the Members.
The Managing Member shall be the liquidator. In the event that the Managing
Member is unable to serve as liquidator, a liquidating trustee shall be chosen
by affirmative vote of a Majority in Interest of the Members voting at a meeting
of Members (excluding Nonvoting Special Members).

Section 6.7 Certain Tax Matters. (a) All items of income, gain, loss, deduction
and credit of the Company shall be allocated among the Members for federal,
state and local income tax purposes in the same manner as such items of income,
gain, loss, deduction and credit shall be allocated among the Members pursuant
to this Agreement, except as may otherwise be provided herein or by the Code or
other applicable law. To the extent Regulations promulgated pursuant to
Subchapter K of the Code (including under Sections 704(b) and (c) of the Code)
or other applicable law require allocations for tax purposes that differ from
the foregoing allocations, the Managing Member may determine the manner in which
such tax allocations shall be made so as to comply more fully with such
Regulations or other applicable law and, at the same time, preserve the economic
relationships among the Members as set forth in this Agreement. In the event
there is a net decrease in partnership minimum gain or partner nonrecourse debt
minimum gain (determined in accordance with the principles of Regulation
Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Company, each
Member shall be specially allocated items of Company income and gain for such
year (and, if necessary, subsequent years) in an amount equal to its respective
share of such net decrease during such year, determined pursuant to Regulations
Sections 1.704-2(g) and 1.704-2(i) (5). The items to be so allocated shall be
determined in accordance with Regulations Section 1.704-2(f). In addition, this
Agreement shall be considered to contain a “qualified income offset” as provided
in Regulations Section 1.704-1(b)(2)(ii)(d).

(b) Notwithstanding Section 6.7(a), if the Company realizes capital gains
(including short-term capital gains) for federal income tax purposes (“gains”)
for any fiscal year during or as of the end of which one or more Positive Basis
Members (as hereinafter defined) Withdraw from the Company pursuant to this
Article VI, the Managing Member may elect to allocate such gains as follows:
(i) to allocate such gains among such Positive Basis Members, pro rata in
proportion to the respective Positive Basis (as hereinafter defined) of each
such Positive Basis Member, until either the full amount of such gains shall
have been so allocated or the Positive Basis of each such Positive Basis Member
shall

 

28

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

have been eliminated and (ii) to allocate any gains not so allocated to Positive
Basis Members to the other Members in such manner as shall equitably reflect the
amounts allocated to such Members’ Capital Accounts pursuant to this Agreement.

As used herein, (i) the term “Positive Basis” shall mean, with respect to any
Member and as of any time of calculation, the amount by which its aggregate
Capital Account balance (determined in accordance with Section 5.2) as of such
time exceeds its “adjusted tax basis,” for Federal income tax purposes, in its
interest in the Company as of such time (determined without regard to any
adjustments made to such “adjusted tax basis” by reason of any transfer or
assignment of such interest, including by reason of death, and without regard to
such Member’s share of the liabilities of the Company under Section 752 of the
Code), and (ii) the term “Positive Basis Member” shall mean any Member who
Withdraws from the Company and who has Positive Basis as of the effective date
of its Withdrawal, but such Member shall cease to be a Positive Basis Member at
such time as it shall have received allocations pursuant to clause (i) of the
first paragraph of this Section 6.7(b) equal to its Positive Basis as of the
effective date of its Withdrawal.

(c) The Managing Member shall cause to be prepared all federal, state and local
tax returns of the Company for each year for which such returns are required to
be filed and, after approval of such returns by the Managing Member, shall cause
such returns to be timely filed. The Managing Member shall determine the
appropriate treatment of each item of income, gain, loss, deduction and credit
of the Company and the accounting methods and conventions under the tax laws of
the United States, the several states and other relevant jurisdictions as to the
treatment of any such item or any other method or procedure related to the
preparation of such tax returns. The Managing Member may cause the Company to
make or refrain from making any and all elections permitted by such tax laws.
Each Member agrees that he shall not, unless he provides prior notice of such
action to the Company, (i) treat, on his individual income tax returns, any item
of income, gain, loss, deduction or credit relating to his interest in the
Company in a manner inconsistent with the treatment of such item by the Company
as reflected on the Form K-l or other information statement furnished by the
Company to such Member for use in preparing his income tax returns or (ii) file
any claim for refund relating to any such item based on, or which would result
in, such inconsistent treatment. In respect of an income tax audit of any tax
return of the Company, the filing of any amended return or claim for refund in
connection with any item of income, gain, loss, deduction or credit reflected on
any tax return of the Company, or any administrative or judicial proceedings
arising out of or in connection with any such audit, amended return, claim for
refund or denial of such claim, (A) the Tax Matters Member (as defined below)
shall be authorized to act for, and his decision shall be final and binding
upon, the Company and all Members except to the extent a Member shall properly
elect to be excluded from such proceeding pursuant to the Code, (B) all expenses
incurred by the Tax Matters Member in connection therewith (including, without
limitation, attorneys’, accountants’ and other experts’ fees and disbursements)
shall be expenses of the Company and (C) no Member shall have the right to
(1) participate in the audit of any Company tax return, (2) file any amended
return or claim for refund in connection with any item of income, gain, loss,
deduction or credit reflected on any tax return of the Company (unless he
provides prior notice of such action to the Company as provided above),
(3) participate in any administrative or judicial proceedings conducted by the
Company or the Tax Matters Member arising out of or in connection with any such
audit, amended return, claim for refund or denial of such claim or (4) appeal,
challenge or otherwise protest any adverse findings in any such audit conducted
by the Company or the Tax Matters Member or with respect to any such amended
return or claim for refund filed by the Company or the Tax Matters Member or in
any such administrative or judicial proceedings conducted by the Company or the
Tax Matters Member. The Company and each Member hereby designate any Member
selected by the Managing Member as the “tax matters partner” for purposes of
Section 6231(a) (7) of the Code (the “Tax Matters Member”). To the fullest
extent permitted by applicable law, each Member agrees to indemnify and hold
harmless the Company and all other Members from and against any and all
liabilities, obligations, damages,

 

29

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

deficiencies and expenses resulting from any breach or violation by such Member
of the provisions of this Section 6.7 and from all actions, suits, proceedings,
demands, assessments, judgments, costs and expenses, including reasonable
attorneys’ fees and disbursements, incident to any such breach or violation.
Each person (for purposes of this Section 6.7(c), called a “Pass-Thru Member”)
that holds or controls an interest as a Member on behalf of, or for the benefit
of, another person or persons, or which Pass-Thru Member is beneficially owned
(directly or indirectly) by another person or persons, shall, within 30 days
following receipt from the Tax Matters Member of any notice, demand, request for
information or similar document, convey such notice or other document in writing
to all holders of beneficial interests in the Company holding such interests
through such Pass-Thru Member.

(d) Each individual Member shall provide to the Company copies of each federal,
state and local income tax return of such Member (including any amendment
thereof) within 30 days after filing such return.

Section 6.8 Special Basis Adjustments. In connection with a distribution of
Company property to a Member or any assignment or transfer of a Company interest
permitted by the terms of this Agreement, the Managing Member may cause the
Company, on behalf of the Members and at the time and in the manner provided in
Code Section 754 and Regulation Section 1.754-1(b), to make an election to
adjust the basis of the Company’s property in the manner provided in Sections
734(b) and 743(b) of the Code.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all
disputes which cannot be settled amicably, including any ancillary claims of any
party, arising out of, relating to or in connection with the validity,
negotiation, execution, interpretation, performance or non-performance of this
Agreement (including the validity, scope and enforceability of this arbitration
provision) shall be finally settled by arbitration conducted by a single
arbitrator in New York in accordance with the then-existing Rules of Arbitration
of the International Chamber of Commerce. If the parties to the dispute fail to
agree on the selection of an arbitrator within thirty (30) days of the receipt
of the request for arbitration, the International Chamber of Commerce shall make
the appointment. The arbitrator shall be a lawyer and shall conduct the
proceedings in the English language. Performance under this Agreement shall
continue if reasonably possible during any arbitration proceedings.

(b) Notwithstanding the provisions of paragraph (a), the Managing Member may
bring, or may cause the Company to bring, on behalf of the Managing Member or
the Company or on behalf of one or more Members, an action or special proceeding
in any court of competent jurisdiction for the purpose of compelling a party to
arbitrate, seeking temporary or preliminary relief in aid of an arbitration
hereunder, and/or enforcing an arbitration award and, for the purposes of this
paragraph (b), each Member (i) expressly consents to the application of
paragraph (c) of this Section 7.1 to any such action or proceeding, (ii) 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, and (iii) irrevocably appoints the Managing Member
as such Member’s agent for service of process in connection with any such action
or proceeding and agrees that service of process upon any such agent, who shall
promptly advise such Member of any such service of process, shall be deemed in
every respect effective service of process upon the Member in any such action or
proceeding.

(c)(i) EACH MEMBER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS
LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF

 

30

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

ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF THIS
SECTION 7.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR
CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS
AGREEMENT. Such ancillary judicial proceedings include any suit, action or
proceeding to compel arbitration, to obtain temporary or preliminary judicial
relief in aid of arbitration, or to confirm an arbitration award. The parties
acknowledge that the forum(s) designated by this paragraph (c) have a reasonable
relation to this Agreement, and to the parties’ relationship with one another.

(ii) The parties hereby waive, to the fullest extent permitted by applicable
law, any objection which they now or hereafter may have to personal jurisdiction
or to the laying of venue of any such ancillary suit, action or proceeding
brought in any court referred to in the preceding paragraph of this Section 7.1
and such parties agree not to plead or claim the same.

(d) Notwithstanding any provision of this Agreement to the contrary, this
Section 7.1 shall be construed to the maximum extent possible to comply with the
laws of the State of Delaware, including the Delaware Uniform Arbitration Act
(10 Del. C. § 5701 et seq.) (the “Delaware Arbitration Act”). If, nevertheless,
it shall be determined by a court of competent jurisdiction that any provision
or wording of this Section 7.1, including any rules of the International Chamber
of Commerce, shall be invalid or unenforceable under the Delaware Arbitration
Act, or other applicable law, such invalidity shall not invalidate all of this
Section 7.1. In that case, this Section 7.1 shall be construed so as to limit
any term or provision so as to make it valid or enforceable within the
requirements of the Delaware Arbitration Act or other applicable law, and, in
the event such term or provision cannot be so limited, this Section 7.1 shall be
construed to omit such invalid or unenforceable provision.

Section 7.2 Ownership and Use of the Blackstone Name. The Company acknowledges
that Blackstone TM L.L.C. (“TM”), a Delaware limited liability company with a
principal place of business at 345 Park Avenue, New York, New York 10154, (or
its successors or assigns) is the sole and exclusive owner of the mark and name
BLACKSTONE and that the ownership of, and the right to use, sell or otherwise
dispose of, the firm name or any abbreviation or modification thereof which
consists of or includes BLACKSTONE, shall belong exclusively to TM. The Company
shall not be permitted to use the BLACKSTONE name and service mark without the
prior written consent of TM. To the extent the Company is permitted to use the
BLACKSTONE name and service mark, all services rendered by the Company under the
BLACKSTONE mark and name will be rendered in a manner and with quality levels
that are consistent with the high reputation heretofore developed for the
BLACKSTONE mark by TM and its Affiliates and licensees. The Company understands
that, to the extent TM hereinafter permits the Company to use the BLACKSTONE
name and service mark, TM may thereafter terminate the Company’s right to use
BLACKSTONE at any time in TM’s sole discretion by giving the Company written
notice of termination. Promptly following any such termination, the Company will
take all steps necessary to change its partnership name to one which does not
include BLACKSTONE or any confusingly similar term and cease all use of
BLACKSTONE or any term confusingly similar thereto as a service mark or
otherwise.

Section 7.3 Written Consent. Any action required or permitted to be taken by a
vote of Members at a meeting may be taken without a meeting if a Majority in
Interest of the Members consent thereto in writing.

Section 7.4 Admission Letters; Schedules. The Managing Member may, or may cause
the Company to, enter into separate letter agreements (“Admission Letters”) with
certain Members with respect to capital contributions, Profit Sharing
Percentages, benefits or any other matter, in each case, on terms and conditions
not inconsistent with this Agreement. The Managing Member may from time to time
execute and deliver to the Members schedules which set forth the then current
Capital

 

31

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

Account balances and Profit Sharing Percentages of the Members and any other
matters deemed appropriate by the Managing Member. Such schedules shall be for
information purposes only and shall not be deemed to be part of this Agreement
for any purpose whatsoever.

Section 7.5 Governing Law; Separability of Provisions. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to principles of conflict of laws. In particular, the Company has
been formed pursuant to the LLC Act, and the rights and liabilities of the
Members shall be as provided therein, except as herein otherwise expressly
provided. If any provision of this Agreement shall be held to be invalid, such
provision shall be given its meaning to the maximum extent permitted by law and
the remainder of this Agreement shall not be affected thereby.

Section 7.6 Successors and Assigns. This Agreement shall be binding upon and
shall, subject to the penultimate sentence of Section 6.3, inure to the benefit
of the parties hereto, their respective heirs and personal representatives, and
provided that no person claiming by, through or under a Member (whether such
Member’s heir, personal representative or otherwise), as distinct from such
Member itself, shall have any rights as, or in respect to, a Member (including
the right to approve or vote on any matter or to notice thereof) except the
right to receive only those distributions expressly payable to such person
pursuant to Article VI. Any Member or Withdrawn Member shall remain liable for
the obligations under this Agreement of any transferee of all or any portion of
such Member’s or Withdrawn Member’s interest in the Company, unless waived by
the Managing Member. Nothing in this Agreement is intended, nor shall anything
herein be construed, to confer any rights, legal or equitable, in any person
other than the Members and their respective legal representatives, heirs,
successors and permitted assigns.

Section 7.7 Confidentiality; Restrictive Covenants. By executing this Agreement,
each Member expressly agrees, at all times during the term of the Company and
thereafter and whether or not at the time a Member of the Company, to maintain
the confidentiality of, and not to disclose to any person other than the
Company, another Member or a person designated by the Company, any information
relating to the business, financial structure, financial position or financial
results, clients or affairs of the Company that shall not be generally known to
the public or the securities industry, except as otherwise required by law or by
any regulatory or self-regulatory organization having jurisdiction; provided,
that any corporate Member may disclose any such information it is required by
law, rule, regulation or custom to disclose. In addition, each Member shall be
subject to the restrictive covenants and other obligations set forth in such
Member’s Admission Letter.

Section 7.8 Notices. Whenever notice is required or permitted by this Agreement
to be given, such notice shall be in writing (including telecopy or similar
writing) and shall be given by hand delivery (including any courier service) or
telecopy to any Member at its address or telecopy number shown in the Company’s
books and records or, if given to the Managing Member or the Company, at the
address of the Company provided herein. Each such notice shall be effective
(i) if given by telecopy, upon dispatch, and (ii) if given by hand delivery,
when delivered to the address of such Member, the Managing Member or the Company
specified as aforesaid.

Section 7.9 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute a single instrument.

Section 7.10 Power of Attorney. Each Member (other than the Managing Member)
hereby irrevocably appoints the Managing Member as such Member’s true and lawful
agent, representative and attorney-in-fact, each acting alone, in such Member’s
name, place and stead, to make, execute, sign and file, on behalf of such
Member, any and all agreements, instruments, documents and certificates which
the Managing Member deems necessary or advisable in connection with any

 

32

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

transaction or matter contemplated by or provided for in this Agreement,
including without limitation, the performance of any obligation of such Member
or the Company or the exercise of any right of such Member or the Company or an
amendment to this Agreement. Such power of attorney is coupled with an interest
and shall survive and continue in full force and effect notwithstanding the
Withdrawal from the Company of any Member for any reason and shall not be
affected by the death, Total Disability or Incompetence of such Member.

Section 7.11 Member’s Will. Each Member and Withdrawn Member shall include in
his or her will a provision that addresses certain matters in respect of his or
her obligations relating to the Company that is satisfactory to the Managing
Member and each such Member and Withdrawn Member shall confirm annually to the
Company, in writing, that such provision remains in his current will. Where
applicable, any estate planning trust of such Member or Withdrawn Member to
which a portion of such Member’s or Withdrawn Member’s Interest is transferred
shall include a provision substantially similar to such provision and the
trustee of such trust shall confirm annually to the Company, in writing, that
such provision or its substantial equivalent remains in such trust. In the event
any Member or Withdrawn Member fails to comply with the provisions of this
Section 7.11 after the Company has notified such Member or Withdrawn Member of
his failure to so comply and such failure to so comply is not cured within 30
days of such notice, the Company may withhold any and all distributions to such
Member until the time at which such party complies with the requirements of this
Section 7.11.

Section 7.12 Cumulative Remedies. Rights and remedies under this Agreement are
cumulative and do not preclude use of other rights and remedies available under
applicable law.

Section 7.13 Legal Fees. Except as more specifically provided herein, in the
event of a legal dispute (including litigation, arbitration or mediation)
between any Member or Withdrawn Member and the Company, arising in connection
with any provision of this Agreement, the “losing” party to such dispute shall
promptly reimburse the “victorious party” for all reasonable legal fees and
expenses incurred in connection with such dispute (such determination to be made
by the relevant adjudicator). Any amounts due under this Section 7.13 shall be
paid within 30 days of the date upon which such amounts are due to be paid.

Section 7.14 Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein. Subject to Section 7.4, this Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.

*****

 

33

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

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
day and year first above written. In the event that it is impracticable to
obtain the signature of any of the Members to this Agreement, this Agreement
shall be binding among the other Members executing the same.

 

MANAGING MEMBER: BLACKSTONE HOLDINGS II L.P. By:   Blackstone Holdings I/II GP
Inc., its General Partner By:  

/s/ Robert L. Friedman

Name:   Robert L. Friedman Title:   Chief Legal Officer and Secretary

 

34