exv10w2



 





Exhibit 10.2




AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT OF

HFF SECURITIES L.P.




Dated as of [________________], 2007




by and among




HOLLIDAY GP CORP., a Delaware corporation,




HFF LP ACQUISITION LLC, a Delaware limited liability company, and




HFF PARTNERSHIP HOLDINGS LLC, a Delaware limited liability company









 









 











TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	ARTICLE I.	 	DEFINITIONS	 	 	2	 
	ARTICLE II.	 	FORMATION, NAME, PURPOSES AND OFFICES	 	 	9	 
	 	 	Section 2.1.
	 	 	 	Organization

	 	 	9	 
	 	 	Section 2.2.
	 	 	 	Partnership Name

	 	 	9	 
	 	 	Section 2.3.
	 	 	 	Purposes

	 	 	10	 
	 	 	Section 2.4.
	 	 	 	Registered Office

	 	 	10	 
	 	 	Section 2.5.
	 	 	 	Term

	 	 	10	 
	ARTICLE III.	 	MANAGEMENT OF THE PARTNERSHIP	 	 	10	 
	 	 	Section 3.1.
	 	 	 	Authority of General Partner

	 	 	10	 
	 	 	Section 3.2.
	 	 	 	Expenses

	 	 	11	 
	 	 	Section 3.3.
	 	 	 	Officers

	 	 	11	 
	 	 	Section 3.4.
	 	 	 	Intentionally Omitted

	 	 	14	 
	 	 	Section 3.5.
	 	 	 	Authority of Limited Partners

	 	 	14	 
	ARTICLE IV.	 	PARTNERS’ CAPITAL CONTRIBUTIONS	 	 	14	 
	 	 	Section 4.1.
	 	 	 	Capital Contributions To Date

	 	 	14	 
	 	 	Section 4.2.
	 	 	 	Intentionally Omitted

	 	 	14	 
	 	 	Section 4.3.
	 	 	 	Capital Accounts

	 	 	14	 
	ARTICLE V.	 	UNITS; CLASS A COMMON STOCK	 	 	15	 
	 	 	Section 5.1.
	 	 	 	Units

	 	 	15	 
	 	 	Section 5.2.
	 	 	 	Splits; Distributions and Reclassifications

	 	 	15	 
	 	 	Section 5.3.
	 	 	 	Cancellation of Class A Common Stock and Units

	 	 	15	 
	 	 	Section 5.4.
	 	 	 	Incentive Plans

	 	 	15	 
	 	 	Section 5.5.
	 	 	 	Offerings of Class A Common Stock

	 	 	16	 
	 	 	Section 5.6.
	 	 	 	Forfeiture

	 	 	16	 
	 	 	Section 5.7.
	 	 	 	Class A Common Stock

	 	 	16	 
	 	 	Section 5.8.
	 	 	 	Register

	 	 	16	 
	ARTICLE VI.	 		 	DISTRIBUTIONS	17	 
	 	 	Section 6.1.
	 	 	 	Distributions of Net Cash Flow

	 	 	17	 
	 	 	Section 6.2.
	 	 	 	Tax Distributions

	 	 	17	 
	 	 	Section 6.3.
	 	 	 	Liquidation Distributions

	 	 	18	 






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TABLE OF CONTENTS
(continued)




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	ARTICLE VII.	 	ALLOCATIONS	 	 	18	 
	 	 	Section 7.1.
	 	 	 	Allocations of Profits

	 	 	18	 
	 	 	Section 7.2.
	 	 	 	Allocation of Losses

	 	 	18	 
	 	 	Section 7.3.
	 	 	 	Special Allocations

	 	 	18	 
	 	 	Section 7.4.
	 	 	 	Tax Allocations

	 	 	19	 
	 	 	Section 7.5.
	 	 	 	Tax Advances

	 	 	20	 
	 	 	Section 7.6.
	 	 	 	Tax Matters

	 	 	20	 
	 	 	Section 7.7.
	 	 	 	Other Allocation Provisions

	 	 	21	 
	ARTICLE VIII.	 	BOOKS AND RECORDS	 	 	21	 
	 	 	Section 8.1.
	 	 	 	Books and Records; Periodic Reporting

	 	 	21	 
	 	 	Section 8.2.
	 	 	 	Right to Inspection

	 	 	21	 
	ARTICLE IX.	 		 	ADMISSION AND WITHDRAWAL OF PARTNERS; ASSIGNMENT; REMOVAL OF GENERAL PARTNER	22	 
	 	 	Section 9.1.
	 	 	 	Transfer by Limited Partner

	 	 	22	 
	 	 	Section 9.2.
	 	 	 	Admission of Substituting Partners

	 	 	22	 
	 	 	Section 9.3.
	 	 	 	Additional and Substitute General Partners; Transfer by General Partner

	 	 	22	 
	 	 	Section 9.4.
	 	 	 	Further Restrictions on Transfer

	 	 	23	 
	 	 	Section 9.5.
	 	 	 	Exchange Rights

	 	 	23	 
	 	 	Section 9.6.
	 	 	 	Permitted Transfers

	 	 	23	 
	 	 	Section 9.7.
	 	 	 	Withdrawal

	 	 	24	 
	ARTICLE X.	 	DISSOLUTION OF PARTNERSHIP	 	 	24	 
	 	 	Section 10.1.
	 	 	 	No Dissolution

	 	 	24	 
	 	 	Section 10.2.
	 	 	 	Events of Dissolution

	 	 	24	 
	ARTICLE XI.	 	LIQUIDATION OF THE PARTNERSHIP	 	 	25	 
	 	 	Section 11.1.
	 	 	 	Liquidation

	 	 	25	 
	 	 	Section 11.2.
	 	 	 	Deemed Distribution and Reconstitution

	 	 	25	 
	 	 	Section 11.3.
	 	 	 	Rights of Limited Partners

	 	 	26	 
	ARTICLE XII.	 	LIABILITY AND INDEMNIFICATION	 	 	26	 
	 	 	Section 12.1.
	 	 	 	Liability of Partners

	 	 	26	 
	 	 	Section 12.2.
	 	 	 	Indemnification

	 	 	26	 






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TABLE OF CONTENTS
(continued)




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	ARTICLE XIII.	 	MISCELLANEOUS	 	 	28	 
	 	 	Section 13.1.
	 	 	 	Additional Documents and Acts

	 	 	28	 
	 	 	Section 13.2.
	 	 	 	Governing Law

	 	 	28	 
	 	 	Section 13.3.
	 	 	 	Severability

	 	 	28	 
	 	 	Section 13.4.
	 	 	 	Entire Agreement

	 	 	29	 
	 	 	Section 13.5.
	 	 	 	Binding Effect

	 	 	29	 
	 	 	Section 13.6.
	 	 	 	Agreement Restricted to Partners

	 	 	29	 
	 	 	Section 13.7.
	 	 	 	Counterparts

	 	 	29	 
	 	 	Section 13.8.
	 	 	 	Power of Attorney; Amendments

	 	 	29	 
	 	 	Section 13.9.
	 	 	 	Notices

	 	 	30	 
	 	 	Section 13.10.
	 	 	 	Authorized Representative

	 	 	31	 
	 	 	Section 13.11.
	 	 	 	Amended and Restated Agreement

	 	 	31	 







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AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT OF

HFF SECURITIES L.P.




     This Amended and Restated Limited Partnership Agreement of HFF Securities L.P. (this
“Agreement”), dated as of ___, 2007, is by and among (a) HOLLIDAY GP CORP., a Delaware
corporation (the “General Partner”), and (b) HFF LP ACQUISITION LLC, a Delaware limited liability
company (“Acquisition”) and HFF PARTNERSHIP HOLDINGS LLC, a Delaware limited liability company
(“Holdco” and together with Acquisition, each a “Limited Partner” and collectively, the “Limited
Partners”). The General Partner and the Limited Partners are each referred to herein as a
“Partner” and collectively referred to herein as the “Partners”.



RECITALS:




     A.     The Partnership (as hereinafter defined) was formed as a limited partnership pursuant to
the Act (as hereinafter defined) by the filing of the Certificate (as hereinafter defined).



     B.     Prior to the effectiveness of this Agreement, the Partnership was (a) governed by the terms
of that certain Limited Partnership Agreement of HFF Securities L.P., dated as of April ___, 2004,
as amended by that certain amendment dated as of March 29, 2006 (such agreement as amended, the
“Existing Agreement”) and (b) comprised of Acquisition, as the sole limited partner (owning 99% of
the Percentage Interests (as hereinafter defined)) and General Partner, as the sole general partner
(owning 1% of the Percentage Interests).



     C.     Immediately prior to (or, as applicable, simultaneous with) the effectiveness of this
Agreement, pursuant to that certain Sale and Merger Agreement dated as of the date hereof (as the
same may be amended, restated, supplemented, substituted, replaced or otherwise modified from time
to time in accordance with its terms, the “Transaction Agreement”), by and among Acquisition,
Holdings (as hereinafter defined), Holdco, General Partner, Publico (as hereinafter defined) and GP
Acquisition (as hereinafter defined), (a) Acquisition will transfer [___%] of the Percentage
Interests to Holdco in return for certain cash to be raised in an initial public offering of the
Class A Common Stock (as hereinafter defined) of Holdco’s parent company, HFF, Inc., a Delaware
corporation (“Publico”) (such offering, the “IPO”), and Holdco will be admitted as a limited
partner in the Partnership, (b) GP Acquisition Corp., a wholly owned subsidiary of Holdco (“GP
Acquisition”), will merge into General Partner, with General Partner surviving the merger as a
wholly owned subsidiary of Holdco and continuing as the general partner of the Partnership, (c) the
outstanding balance of the term loan to Holliday Fenoglio Fowler, L.P., a Texas limited partnership
(“HFF”), an affiliate of the Partnership, in the original principal amount of $60,000,000,
comprising a portion of the Loan Facility (as hereinafter defined) will be repaid in full from the
cash received by Acquisition in accordance with the transactions described in clause (a) above and
certain additional cash received from Acquisition in connection with a companion transaction also
governed by the Transaction Agreement and involving the sale of partnership interests in HFF (and,
in connection therewith all certificates of ownership interests in the Partnership held as
security for the Loan Facility shall be returned to the Partnership and will cease to be of any
force and effect) and (d)



 









 







Acquisition
will, inter alia, be granted certain rights to exchange from time to time all or a
portion of the Units then held by Acquisition for Class A Common Stock.



     D.     In connection with the transactions noted in the preceding Recital C, the parties hereto
desire to amend and restate the Existing Agreement in its entirety in accordance with the terms
hereof.



     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:



ARTICLE I.

DEFINITIONS




     The following capitalized terms shall have the following meanings when used in this Agreement:



     “Act” means the Delaware Revised Uniform Limited Partnership Act, Delaware Code Annotated,
Title 6, Chapter 17, as amended from time to time (or any corresponding provisions of succeeding
law).



     “Acquisition” shall have the meaning set forth in the introductory paragraph hereof.



     “Agreement” shall have the meaning set forth in the introductory paragraph hereof.



     “Additional Credit Amount” shall have the meaning set forth in Section 6.2 hereof.



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



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



     “Amended Tax Amount” shall have the meaning set forth in Section 6.2 hereof.



     “Annual Budget” means the annual operating budget for the Partnership, which shall be
proposed, submitted and approved in accordance with Section 3.3(o) hereof.



     “Applicable Securities Laws” means the Securities Act (as hereinafter defined) and the
Exchange Act (as hereinafter defined), the rules promulgated thereunder, the rules of the NASD,



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Inc. and any other applicable self-regulatory organizations, and the statutes and rules of the
various states in which the Partnership shall conduct its securities business.



     “Assignee” shall have the meaning set forth in Section 9.1 hereof.



     “Assumed Tax Rate” shall mean the highest effective marginal combined U.S. federal, state and
local income tax rate for each Fiscal Year prescribed for an individual or corporation whose
residence or commercial domicile is New York, New York assuming such taxpayer: (1) had no itemized
deductions or tax credits, (2) was not subject to the alternative minimum tax, the self-employment
tax or other U.S. federal (or comparable state or local) income taxes not imposed under sections 1
or 11 or the Code (as defined herein), and (3) was subject to income tax only in the jurisdictions
where the taxpayer resides or is commercially domiciled. For the avoidance of doubt, the Assumed
Tax Rate will be the same for all Partners.



     “Budget Officers” shall have the meaning set forth in Section 3.3(o) hereof.



     “Business Plan” shall have the meaning set forth in Section 3.3(o) hereof.



     “Capital Account” shall have the meaning set forth in Section 4.3 hereof.



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



     “Carrying Value” means, with respect to any asset of the Partnership, the asset’s adjusted
basis for U.S. federal income tax purposes, except that the Carrying Values of all such assets
shall be adjusted to equal their respective fair market values (as reasonably determined by the
General Partner) in accordance with the rules set forth in Regulations Section 1.704-1(b)(2)(iv)(f)
or (m), except as otherwise provided herein, immediately prior to: (a) the date of the acquisition
of any additional Units by any new or existing Partner in exchange for more than a de
minimis capital contribution to the Partnership, (b) the date of the distribution of more
than a de minimis amount of Partnership property (other than a pro rata
distribution) to a Partner or (c) the date of a grant of any additional Units to any new or
existing Partner as consideration for the provision of services to or for the benefit of the
Partnership; provided, that adjustments pursuant to clauses (a), (b) and (c) above shall be
made only if the General Partner in good faith determines that such adjustments are (x) necessary
or appropriate to reflect the relative economic interests of the Partners or (y) required by the
Regulations. The Carrying Value of any asset distributed to any Partner shall be adjusted
immediately prior to such distribution to equal its gross fair market value. The Carrying Value of
any asset contributed by a Partner to the Partnership shall be the gross fair market value of the
asset as of the date of its contribution thereto. In the case of any asset that has a Carrying
Value that differs from its adjusted tax basis, Carrying Value shall be adjusted by the amount of
depreciation calculated for purposes of the definition of “Profits and Losses” rather than the
amount of depreciation determined for U.S. federal income tax purposes.



     “Cause” shall have the meaning set forth in the Holdings Operating Agreement as the same
exists on the date hereof (or as may otherwise be agreed to by the parties hereto).



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     “Certificate” means the Certificate of Limited Partnership of HFF Securities L.P., as filed in
the Office of the Secretary of State of Delaware, as the same has been and may be amended from time
to time.



     “Charity” means any organization that is organized and operated for a purpose described in
Section 170(c) of the Code (determined without reference to Code Section 170(c)(2)(A)) and
described in Code Sections 2055(a) and 2522 and is incorporated for the realization of a common
goal, which should not be mainly of an economic nature.



     “Class A Common Stock” means Class A Common Stock of Publico.



     “Class B Common Stock” means Class B Common Stock of Publico.



     “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any
corresponding provisions of subsequent superseding federal laws.



     “Compete(s)” shall have the meaning set forth in the Employment Agreement executed by the
applicable Member of Holdings. In the event an Employment Agreement with respect to a Member of
Holdings is not then in effect, the definition of Compete(s) as set forth in the Employment
Agreement attached hereto as Exhibit D shall be deemed to be fully restated and
incorporated herein as the definition of Compete(s).



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



     “Credit Amount” shall have the meaning set forth in Section 6.2 hereof.



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



     “Effective Time” means the closing of the transactions noted in Recital C hereof.



     “Employment Agreement(s)” means each of those certain Amended and Restated Employment
Agreements between each Member of Holdings and HFF, substantially in the form of Exhibit D
hereof.



     “Exchange Act” means the United States Securities Exchange Act of 1934, and the rules and
regulations promulgated thereunder, in each instance as amended and as the same may be further
amended from time to time.



     “Existing Agreement” shall have the meaning set forth in Recital B hereof.



     “Final Tax Amount” shall have the meaning set forth in Section 6.2 hereof.



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     “Fiscal Year” means the applicable calendar year (or, if otherwise, the applicable taxable
year of the Partnership under the Code).



     “Forfeited Units” shall have the meaning set forth in Section 5.6 hereof.



     “Forfeited Units in Holdings” means all Units in Holdings which are forfeited by a Member of
Holdings (a) as a result of (i) the termination or removal of any Person as a Member of Holdings
for Cause, (ii) the termination of any Member of Holdings as an employee of the Partnership for
Cause or (b) in the event that following any Voluntary Withdrawal of a Member of Holdings, such
Person Competes or Solicits. Such Units in Holdings are only subject to forfeiture to the extent
the same may not then be redeemed pursuant to the “Exchange Right” as defined in the Holdings
Operating Agreement as the same exists on the date hereof (or as may be otherwise agreed to by the
parties hereto).



     “General Partner” shall have the meaning set forth in the introductory paragraph hereof.



     “Gross Receipts” means all cash receipts of any kind received by the Partnership (including,
without limitations, all cash received by the Partnership from (a) the operations of the
Partnership or any of its Subsidiaries and/or (b) capital transactions involving the Partnership,
the Subsidiaries or any assets and/or equity interests related thereto).



     “HFF” shall have the meaning set forth in Recital C hereof.



     “Holdco” shall have the meaning set forth in the introductory paragraph hereof.



     “Holdings” shall mean HFF Holdings LLC, a Delaware limited liability company, the holder as of
the Effective Time of, among other things, 100% of the membership interests in Acquisition and one
share of Class B Common Stock.



     “Holdings Operating Agreement” means that certain Second Amended and Restated Limited
Liability Company Agreement of HFF Holdings LLC dated as of the date hereof by and among the
Members of Holdings (as such members exist as of the date hereof).



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



     “Incentive Plan” means any equity incentive or similar plan pursuant to which Publico may
issue shares of Class A Common Stock or other interests to one or more employees of the Partnership
from time to time.



     “Involuntary Withdrawal” shall have the meaning set forth in the Holdings Operating Agreement
as the same exists on the date hereof (or as may otherwise be agreed to by the parties hereto).



     “IPO” shall have the meaning set forth in Recital C hereof.



     “Law” means any statute, law, ordinance, regulation, rule, code, executive order, injunction,
judgment decree or other order issued or promulgated by any national, supranational,



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state, federal, provincial, local or municipal government or any administrative or regulatory
body with authority therefrom with jurisdiction over the Partnership or any Partner, as the case
may be.



     “Limited Partner” and “Limited Partners” shall have the applicable meaning set forth in the
introductory paragraph hereof.



     “Loan Facility” shall mean, collectively, the term loan and revolving credit facility more
particularly described in that certain Credit Agreement dated as of March 29, 2006 by and among
HFF, Holdings and Bank of America, N.A., as the same may be amended, modified, supplemented,
renewed, replaced and/or refinanced from time to time with Bank of America, N.A. or any other
lender(s). It being understood and agreed that the Partnership shall in no event be obligated
under the terms of any Loan Facility (unless approved in advance by all the Partners and counsel to
the Partnership), provided that the Partners shall agree to pledge all or a portion of their
Partnership Interests as security therefor (provided that no such pledge shall result in the
Partnership being obligated (or being deemed to be obligated) for the repayment of all or any
portion of the Loan Facility under Applicable Securities Laws or otherwise).



     “Majority in Interest of the Limited Partners” means those Limited Partners holding and voting
more than 50% of the Partnership Interests. For purposes of calculating any vote of Limited
Partners as set forth herein, any interest held by an Assignee which has not been admitted as a
Limited Partner shall be excluded.



     “Market Price” means on any given day on which Class A Common Stock is traded on the relevant
exchange, the closing sales price of such Class A Common Stock.



     “Members of Holdings” shall mean each “Member” of Holdings, as defined in the Holdings
Operating Agreement (as the same exists as of the date hereof). As of the date hereof the Members
of Holdings are as set forth in the first column of Exhibit B attached hereto.



     “Net Cash Flow” means with respect to the applicable time period, the excess of Gross Receipts
for such time period over the sum of all Operating Expenses and/or amounts applied to Reserves
during such time period.



     “Net Taxable Income” shall have the meaning set forth in Section 6.2 hereof.



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



     “Officers” means collectively, each Executive Managing Director, Senior Managing Director,
Managing Director, Director, Supervisory Principal and Registered Representative and such other
Persons and titles as may be designated from time to time by the General Partner, as set forth in
this Agreement.



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     “Operating Expenses” means all cash expenditures of every kind and nature which the
Partnership shall pay, including, without limitation, Transaction Expenses, debt service payments,
capital expenditures and audit and legal expenses.



     “Partner” and “Partners” shall have the applicable meanings set forth in the introductory
paragraph hereof.



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



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



     “Partnership” means HFF Securities L.P., a Delaware limited partnership.



     “Partnership Interest” of a Partner means a Partner’s entire interest in the Partnership,
including, without limitation, the right to vote on, consent to, or otherwise participate in, any
decision or action of or by the Partners granted pursuant to this Partnership Agreement.



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



     “Percentage Interest” shall mean as of the date of determination with respect to each Partner,
the percentage obtained by dividing the Units then held by such Partner by the Units then held by
all Partners. The Percentage Interest of each Partner as of the date hereof is as set forth in the
third column of Exhibit A attached hereto.



     “Person” means any individual, partnership, corporation, trust or other entity.



     “Profit Participation Plan” shall mean that certain Profit Participation Bonus Plan dated as
of the date hereof.



     “Profits” and “Losses” means, for each Fiscal Year or other period, the taxable income or loss
of the Partnership, or particular items thereof, determined in accordance with the accounting
method used by the Partnership for U.S. federal income tax purposes with the following adjustments:
(a) all items of income, gain, loss or deduction allocated pursuant to Section 7.3 shall
not be taken into account in computing such taxable income or loss; (b) any income of the
Partnership that is exempt from U.S. federal income taxation and not otherwise taken into account
in computing Profits and Losses shall be added to such taxable income or loss; (c) if the Carrying
Value of any asset differs from its adjusted tax basis for U.S. federal income tax purposes, any
gain or loss resulting from a disposition of such asset shall be calculated with reference to such
Carrying Value; (d) upon an adjustment to the Carrying Value (other than an adjustment in respect
of depreciation) of any asset, pursuant to the definition of Carrying Value, the amount of the
adjustment shall be included as gain or loss in computing such taxable income or loss; (e) if the
Carrying Value of any asset differs from its adjusted tax basis for U.S. federal



-7-









 







income tax purposes, the amount of depreciation, amortization or cost recovery deductions with
respect to such asset for purposes of determining Profits and Losses, if any, shall be an amount
which bears the same ratio to such Carrying Value as the U.S. federal income tax depreciation,
amortization or other cost recovery deductions bears to such adjusted tax basis (provided,
that if the U.S. federal income tax depreciation, amortization or other cost recovery deduction is
zero, the General Partner may use any reasonable method for purposes of determining depreciation,
amortization or other cost recovery deductions in calculating Profits and Losses); and (f) except
for items noted in (a) above, any expenditures of the Partnership not deductible in computing
taxable income or loss, not properly capitalizable and not otherwise taken into account in
computing Profits and Losses pursuant to this definition shall be treated as deductible items.



     “Properties” means all real and personal properties and assets acquired by the Partnership and
shall include both tangible and intangible property.



     “Regulations” shall include proposed, temporary and final regulations promulgated under the
Code.



     “Reserves” means the amounts used to pay or establish reserves for future Operating Expenses
and other expected and unexpected expenses of the Partnership, including reserves for taxes and
insurance, debt payments, repayment of loans to Partners, capital improvements, replacements and
contingencies, if any. The Officers may propose certain Reserves as a non-binding recommendation
for submission to the General Partner.



     “Securities Act” means the U.S. Securities Act of 1933, and the rules and regulations
promulgated thereunder, in each instance as amended and as the same may be further amended from
time to time.



     “Solicit(s)” shall have the meaning set forth in Section 7 of the Employment Agreement
executed by the applicable Member of Holdings. In the event an Employment Agreement with respect
to a Member of Holdings is not then in effect, the definitions of Solicit(s) as set forth in
Section 7 of the Employment Agreement attached hereto as Exhibit D shall be deemed to be
fully restated and incorporated herein as the definition of Solicit(s).



     “Subsidiary(ies)” means, with respect to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity, are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more intermediaries, by
such Person.



     “Super Majority Vote” shall have the meaning set forth in the Holdco Operating Agreement.



     “Supervisory Principals” means those Officers of the Partnership who have qualified with the
NASD Series 7 and 24 examinations and have been designated by the General Partner as the principals
responsible for the day to day management of the securities business of the Partnership.



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     “Tax Advance” shall have the meaning set forth in Section 7.5 hereof.



     “Tax Amount” shall have the meaning set forth in Section 6.2 hereof.



     “Tax Distributions” shall have the meaning set forth in Section 6.2 hereof.



     “Tax Matters Partner” shall have the meaning set forth in Section 7.6 hereof.



     “Transaction Agreement” shall have the meaning set forth in Recital C hereof.



     “Transaction Expenses” shall mean all expenses incurred by (or allocated to) the Partnership
(or any of its direct or indirect equity owners) from time to time under and in accordance with the
terms of the Transaction Agreement.



     “Transfer” means, in respect of any direct or indirect interest in any Unit, or any Property
or other asset of the Partnership, any sale, assignment, pledge, transfer or other disposition
thereof (specifically excluding any distributions made in accordance with the provisions of Article
VI hereof and/or the applicable provisions of the constituent documents of any Partner, HFF
Holdings and/or Publico), whether voluntarily or by operation of Law, including, without
limitation, the exchange of any direct or indirect interest in any Unit for any other security.



     “Unit” shall mean with respect to each Partner (or assignee) the Units assigned to such
Partner or Assignee, as set forth in the second column of Exhibit A, as the same may be
adjusted in accordance with the terms hereof.



     “Units in Holdings” shall mean all “Units” issued to the Members in Holdings pursuant to the
Holdings Operating Agreement. The Units in Holdings as of the date hereof are as set forth in the
second column of Exhibit B attached hereto and are subject to adjustment in accordance with
the Holdings Operating Agreement.



     “Voting Right Holder” shall have the meaning set forth in the Holdco Operating Agreement.



     “Voting Rights” shall have the meaning set forth in the Holdco Operating Agreement.



ARTICLE II.

FORMATION, NAME, PURPOSES AND OFFICES




     Section 2.1.     Organization. The Partners confirm and ratify the organization and
formation of the Partnership as a limited partnership pursuant to the provisions of the Act for the
limited purposes set forth in Section 2.3 below and upon the terms and conditions set forth in this
Agreement.



     Section 2.2.     Partnership Name. The name of the Partnership shall be HFF Securities
L.P., and all business of the Partnership shall be conducted in such name, or any another assumed
name(s) designated by the General Partner.



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     Section 2.3.     Purposes. The purposes and business of the Partnership shall be to act
as a registered broker dealer in connection with its efforts, on behalf of its clients, to (1)
raise equity capital for discretionary, commingled real estate funds marketed to institutional
investors, (2) raise equity capital for real estate projects, (3) raise equity capital from
institutional investors to fund future real estate acquisitions, recapitalizations, developments,
debt investments and other real estate-related strategies, and (4) execute private placements of
securities in real estate companies. In addition, the Partnership will provide advisory services
on various project or entity-level strategic assignments such as mergers and acquisitions, sales
and divestitures, recapitalizations and restructurings, privatizations, management buyouts, and
arranging joint ventures for specific real estate strategies and to engage in any and all purposes
and activities that are ancillary thereto as permitted under the Act and under all Applicable
Securities Laws.



     Section 2.4.     Registered Office. The registered office of the Partnership in the State
of Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware, and the name and address of
the registered agent for service of process on the Partnership in the State of Delaware is CT
Corporation, 1209 Orange Street, Wilmington, Delaware 19801. The name and business address of the
General Partner is Holliday GP Corp., 2000 Post Oak Boulevard, Suite 2000, One Post Oak Central,
Houston, Texas 77056. The General Partner may change the registered office of the Partnership to
any other place within the State of Delaware upon ten days’ written notice to the Limited Partners
and the preparation and filing of an amendment to the Certificate reflecting such change. The
Partnership may maintain other offices at such other locations as the General Partner shall
determine from time to time.



     Section 2.5.     Term. The term of the Partnership commenced upon the initial filing of
the Certificate and shall continue until the winding up and liquidation of the Partnership and its
business following an event of dissolution as described in Section 10.2 hereof.



ARTICLE III.

MANAGEMENT OF THE PARTNERSHIP




     Section 3.1.     Authority of General Partner. Subject to the terms hereof, the
management and control of the business and affairs of the Partnership and the Properties of the
Partnership shall be exclusively vested in the General Partner who shall (subject to the terms
hereof) have (a) the sole and exclusive right to manage the business of the Partnership and (b) all
of the rights and powers which may be possessed by general partners under the Act. Notwithstanding
the foregoing, the General Partner shall manage and control the business affairs of the Partnership
in accordance with (and not in violation of) Applicable Securities Laws. Without limiting the
generality of the foregoing, the Partners hereby authorize the General Partner to: (a) take such
actions as the General Partner may deem necessary or appropriate in connection with the furtherance
of the purposes of the Partnership; (b) incur indebtedness on behalf of the Partnership; (c)
prosecute and settle claims by or against the Partnership; and (d) exercise any right of the
Partnership under any agreement or instrument as the General Partner in its sole discretion shall
deem necessary or desirable. The General Partner agrees to carry out the purposes and business of
the Partnership in accordance with this Agreement and Applicable Securities Laws; to devote to the
Partnership’s business such time as the General Partner, in its sole discretion, shall determine to
be required for the efficient conduct of such business; and to



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perform, or cause and supervise the performance of all supervisory, management and operational
services and functions of the Partnership.



     Section 3.2.     Expenses. The Partnership shall bear and/or reimburse the General
Partner for any expenses incurred by the General Partner.



     Section 3.3.     Officers.



          (a)     The General Partner may, and does hereby, delegate its rights and authority hereunder with
respect to the management of the day to day business and operation of the Partnership to the
Officers of the Partnership having the title Supervisory Principal. Without limiting the
foregoing, the General Partner shall have the right to (i) confer individual titles and
designations to employees of the Partnership, (ii) remove such titles and designations from any
such employee with or without cause, (iii) determine compensation levels of all employees of the
Partnership, including, without limitation, all Officers and (iv) delegate levels of authority to
the holders of such titles and designations. The General Partner hereby ratifies and confirms all
titles and designations (and associated authority) granted employees of the Partnership, as such
titles and designations (and associated authority) existed immediately prior to the Effective
Time, including without limitation the titles: “Executive Managing Director” (Scott F. McMullin is
an Executive Managing Director), “Senior Managing Director” (each of Daniel M. Cashdan, W. Douglass
Bond, Thomas J. Mizo and Whitaker M. Johnson is a Senior Managing Director), “Managing Director”
(Michael White is a Managing Director); “Director” (each of Michael S. Joseph, Janet Krollman and
Larry Muller is a Director), “Supervisory Principal” (each of Scott F. McMullin and Daniel M.
Cashdan is a Supervisory Principal) and “Registered Representative” (Scott F. McMullin is a
Registered Representative).



          (b)     Any number of offices may be held by the same person. In its discretion, the General
Partner may choose not to fill any office for any period as it may deem advisable except that the
offices of President and Secretary shall be filled as expeditiously as possible.



          (c)     The Officers of the Partnership shall be so designated annually by the General Partner at
the first meeting held after each annual meeting of Partners or as soon thereafter as may be
convenient. Vacancies may be filled or new offices created and filled at any time by the General
Partner. Each Officer shall hold office until a successor is duly designated and qualified or
until his or her earlier death, resignation or removal as hereinafter provided.



          (d)     Any Officer or agent designated by the General Partner may be removed by the General
Partner whenever in its judgment the best interests of the Partnership would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the person so removed.



          (e)     Any vacancy occurring in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by designation from the General Partner for the
unexpired portion of such Officer’s term.



          (f)     Compensation of all Officers shall be fixed by the General Partner, subject to the terms
of any applicable employment agreements.



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          (g)     The Officers designated under this Agreement, or otherwise by the General Partner, as
having responsibility to manage the day to day business affairs and operations of the Partnership,
shall do so in accordance with the Annual Budget and Business Plan.



          (h)     The Executive Managing Director and at the written election (or in the absence of) the
Executive Managing Director one or more Senior Managing Directors shall in general supervise and
control all the day to day business affairs and operations of the Partnership, subject to the
powers of the General Partner set forth in this Agreement and the limitations set forth in this
Article III. The Executive Managing Director and any applicable Senior Managing Directors shall
oversee the other Officers, agents and employees of the Partnership; and shall see that all orders
and resolutions of the Partners are carried into effect. The Executive Managing Director and any
applicable Senior Managing Directors shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the Partnership, except where required or permitted by law to be otherwise
signed and executed and except where the signing and execution thereof shall be expressly delegated
by the General Partner to some other Officer or agent of the Partnership. The Executive Managing
Director and any applicable Senior Managing Directors shall have such other powers and perform such
other duties as may be prescribed by the General Partner or as may be provided in this Agreement.



          (i)     The Supervisory Principals shall have qualified with the NASD Series 7 and 24 examinations
and shall be responsible for the day to day management of the securities business of the
Partnership.



          (j)     The Managing Directors, Directors and Registered Representatives, in the order determined
by the General Partner, shall, in the absence or disability of the Executive Managing Director and
any Senior Managing Directors, act with all of the powers and be subject to all the restrictions of
the Senior Managing Directors. The Managing Directors, Directors and Registered Representatives
shall also perform such other duties and have such other powers as the General Partner, the
Executive Managing Director and any applicable Senior Managing Directors or this Agreement may,
from time to time, prescribe.



          (k)     Officers, assistant Officers and agents, if any, other than those whose duties are
provided for in this Agreement, shall have such authority and perform such duties as may from time
to time be prescribed by resolution of the General Partner.



          (l)     In the case of the absence or disability of any Officer of the Partnership and of any
person hereby authorized to act in such Officer’s place during such Officer’s absence or
disability, the General Partner may by resolution delegate the powers of such Officer to any other
Officer or to any other person whom it may select.



          (m)     Notwithstanding anything to the contrary contained in this Agreement, the Officers shall
not be authorized to cause the Partnership to take any of the following actions without the
specific written consent of the General Partner:



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          (i)     Execute any contract or become a party to any agreement relating to the business of the
Partnership that is not provided for in the Annual Budget or that provides for payments thereunder
in excess of Five Thousand Dollars ($5,000.00);




          (ii)     Make any payment (x) in excess of Five Thousand Dollars ($5,000), or which in the
aggregate are in excess of Twenty-Five Thousand Dollars ($25,000.00) which are not provided for in
the Annual Budget, or (y) which deviates by more than three percent (3%) from the amount of such
payment provided for in the Annual Budget;




          (iii)     Pay, settle or compromise, in any respect, or enter into any agreement with respect to,
any legal action or threat thereof in connection with the Partnership, except for matters covered
by insurance in the normal course of business, provided such matters do not involve an amount
greater than Five Thousand Dollars ($5,000.00) and further provided that the total amount of such
matters settled or compromised do not exceed the sum of Fifteen Thousand Dollars ($15,000.00) in
any twelve (12) month period;




          (iv)     Commence any federal, state or foreign bankruptcy, insolvency, reorganization,
arrangement or liquidation proceeding, or consent to the appointment of a receiver, liquidator,
assignee, trustee, conservator or sequester (or other similar official) of the Partnership or of
all or a substantial part of its assets;




          (v)     Obtain financing or otherwise incur indebtedness of any kind or nature in excess of Five
Thousand Dollars ($5,000.00), other than specified items set forth in an approved Annual Budget;




          (vi)     Waive or compromise any claim or right the Partnership may have against any person or
party; and




          (vii)     Establish Reserves except as provided in the Annual Budget.




     (n)     Partner Rights. The Partners shall be entitled to the rights provided by the laws
of the State of Delaware and as are set forth elsewhere in this Agreement and shall not in any way
be prohibited from or restricted from engaging or owning an interest in any other business venture
of any nature, including any venture which might be or is competitive with the business of the
Partnership.



     (o)     Annual Budget. The Executive Managing Director (or his designee) and the
Supervisory Principal(s) (and such other Officers as may be designated from time to time by the
General Partner) (collectively, the “Budget Officers”) shall prepare and submit the Annual Budget
and Business Plan no later than December 1 of each Fiscal Year for the next Fiscal Year (or such
other date as may be designated by the General Partner) to the Holdco Operating Committee for
approval prior to submission to the General Partner in accordance with the terms hereof. The
Annual Budget and Business Plan shall be submitted by the Budget Officers to the General Partner
both in hard copy and in an electronic format, that conforms with the General Partner’s reasonable
internal requirements. The Annual Budget shall set forth, in addition to any other information
deemed relevant by the General Partner, the projected income, expenses, capital expenditures and
financing needs for the Partnership for the next Fiscal Year, together with any other information
reasonably requested by the General Partner (including, without



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limitation, estimated bonus payments). Upon approval by the Holdco Operating Committee the
Business Plan shall be submitted to the Voting Right Holders for approval by a Super Majority Vote.
If the Voting Right Holders fail to approve the Annual Budget and Business Plan, the same will be
revised and resubmitted for approval as set forth above; this process will be followed until an
Annual Budget and Business Plan is approved by the Voting Right Holders as set forth above. Upon
such approval, the Annual Budget and Business Plan will then be submitted as a non-binding
recommendation to the General Partner. The General Partner may revise in any and all respects the
process by which the Annual Budget and Business Plan is prepared at any time and from time to time
in its discretion. As discussed above, the duly authorized Officers shall have the right to incur
expenses and make expenditures in accordance with the terms of the Approved Budget. As used in
this Agreement the term “Business Plan” shall mean a narrative business/operating plan for the
Partnership for the coming Fiscal Year and being in such detail and covering such matters as the
General Partner may from time to time request.



     Section 3.4.     Intentionally Omitted.



     Section 3.5.     Authority of Limited Partners. Subject to the terms hereof, no Limited
Partner, in its capacity as such, shall participate in or have any control over the business of the
Partnership. Except as expressly provided herein, the Units (and associated Partnership Interests)
do not confer any rights upon the Limited Partners to participate in the conduct, control or
management of the business of the Partnership described in this Agreement, which as described
above shall be vested exclusively in the General Partner. Subject to the rights delegated to the
Officers hereunder, in all matters relating to or arising out of the conduct of the operation of
the Partnership, the decision of the General Partner shall be the decision of the Partnership.
Except as required or permitted by applicable Law, or expressly provided herein or by separate
agreement with the Partnership, no Partner (other than the General Partner, acting in such
capacity) shall take any part in the management or control of the operation or business of the
Partnership in its capacity as a Partner, nor shall any Partner (other than the General Partner,
acting in such capacity) have any right, authority or power to act for or on behalf of or bind the
Partnership in his or its capacity as a Partner in any respect or assume any obligation or
responsibility of the Partnership or of any other Partner.



ARTICLE IV.

PARTNERS’ CAPITAL CONTRIBUTIONS




     Section 4.1.     Capital Contributions To Date. The Capital Contributions of the Partners
as in effect immediately following the Effective Time are reflected in the books and records of the
Partnership as provided to and approved by each Partner.



     Section 4.2.     Intentionally Omitted.



     Section 4.3.     Capital Accounts. A separate capital account has been established for
each Partner (each a “Capital Account”) on the books of the Partnership (a) in connection with the
Capital Contributions made by the Partners hereto (and/or their predecessors in interest) and (b)
in accordance with the provisions of Section 1.704-1(b)(2)(iv) of the Regulations. The Capital
Account of each Partner shall be credited with such Partner’s Capital Contributions, if



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any, all Profits allocated to such Partner pursuant to Section 7.1 and any items of income or
gain which are specially allocated pursuant to Section 7.3; and shall be debited with all Losses
allocated to such Partner pursuant to Section 7.2, and any items of loss or deduction of the
Partnership specially allocated to such Partner pursuant to Section 7.3, and all cash and the
Carrying Value of any property (net of liabilities assumed by such Partner and the liabilities to
which such property is subject) distributed by the Partnership to such Partner. Any references in
any section of this Agreement to the Capital Account of a Partner shall be deemed to refer to such
Capital Account as the same may be credited or debited from time to time as set forth above. In the
event of any Transfer in accordance with the terms of this Agreement, the Assignee shall succeed to
the Capital Account of the transferor to the extent the same relates to the Units transferred. In
connection with Holdco’s acquisition of Units in the Partnership from Acquisition, which the
Partners shall treat as a purchase of a partnership interest from an existing Partner for which an
election under Code Section 754 shall be made by the Partnership, the Partners acknowledge and
agree that any adjustment to the basis of Partnership property arising under Code Sections 754 and
743 and any subsequent depreciation, depletion, amortization and gain or loss adjustments resulting
from such basis adjustments shall not be reflected in the Capital Accounts of the Partners, in
accordance with Section 1.704-1(b)(2)(iv)(m)(2) of the Regulations. As a consequence of Holdco’s
acquisition of Units in the Partnership from Acquisition, Holdco will succeed to a portion of the
Capital Account of Acquisition, with such portion equal to the Capital Account of Holdco prior to
such acquisition multiplied by the Percentage Interest of Holdco.



ARTICLE V.

UNITS; CLASS A COMMON STOCK




     Section 5.1.     Units. Interests in the Partnership shall be represented by the Units.



     Section 5.2.     Splits; Distributions and Reclassifications. The Partnership shall not
in any manner subdivide (by any Unit split, Unit distribution, reclassification or recapitalization
or otherwise) or combine (by reverse Unit split, reclassification, recapitalization or otherwise)
the outstanding Units unless an identical event simultaneously occurs with respect to the Class A
Common Stock, in which event the Units shall be subdivided or combined concurrently with and in the
same manner as the Class A Common Stock as and to the extent necessary to ensure that the ratio of
(a) Class A Common Stock then outstanding to (b) the aggregate Units held by Holdco and the General
Partner immediately prior to any such event shall remain the same immediately following any such
event.



     Section 5.3.     Cancellation of Class A Common Stock and Units. At any time a share of
Class A Common Stock is redeemed, repurchased, acquired, cancelled or terminated by Publico, one
Unit registered in the name of Holdco (or in the event Holdco no longer holds Units, the General
Partner) will automatically be cancelled for no consideration by the Partnership, in order that the
ratio of (a) Class A Common Stock then outstanding to (b) the aggregate Units held by Holdco and
the General Partner immediately prior to any such event shall remain the same immediately following
any such event.



     Section 5.4.     Incentive Plans. At any time Publico issues a share of Class A Common
Stock to an employee of the Partnership or HFF pursuant to an Incentive Plan (whether pursuant



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to the exercise of a stock option or the grant of a restricted share award or otherwise), the
following shall occur: (a) Publico shall be deemed to contribute to the capital of Holdco an amount
of cash equal to the current per share Market Price of a share of Class A Common Stock on the date
such share is issued (or, if earlier, the date the related option is exercised), and Holdco shall
in turn be deemed to contribute to the capital of (i) the Partnership an amount equal to one-half
of such amount and (ii) HFF an amount equal to one-half of such amount, and the Capital Account of
Holdco in the Partnership and HFF shall be adjusted accordingly; (b) the Partnership and HFFS shall
together be deemed to purchase from Holdco a share of Class A Common Stock for an amount of cash
equal to the amount of cash deemed contributed by Holdco to the Partnership in clause (a) above
(and such share of Class A Common Stock shall be deemed delivered to its owner under the Incentive
Plan); (c) the net proceeds (including the amount of any payments made on a loan with respect to a
stock purchase award) received by Holdco with respect to any such share, if any, shall be
concurrently transferred and paid to the Partnership (and such net proceeds so transferred shall
not constitute a Capital Contribution), in such amount as the General Partner shall determine and
the balance of any such net proceeds shall be concurrently transferred and paid to HFF (and such
net proceeds shall not constitute a capital contribution to HFF); and (d) the Partnership shall
issue to Holdco a Unit registered in the name of Holdco. The Partnership shall retain any net
proceeds that are paid directly to the Partnership.



     Section 5.5.     Offerings of Class A Common Stock. At any time Publico issues a share of
Class A Common Stock other than in connection with an Incentive Plan or the IPO (it being agreed
that Holdco will acquire the Units noted in Exhibit A in connection with the IPO pursuant to the
terms of the Transaction Agreement), net proceeds received by Publico with respect to such share
shall be concurrently transferred to Holdco for transfer to the Partnership and HFF in such manner
as the General Partner shall determine and the Partnership shall in return issue to Holdco one Unit
registered in the name of Holdco, and the Capital Account of Holdco shall be adjusted accordingly.



     Section 5.6.     Forfeiture. Upon the occurrence of any event resulting in Forfeited
Units in Holdings, (a) pursuant to the Holdings Operating Agreement, the affected Member of
Holdings shall cease to have any rights with respect to the Forfeited Units in Holdings, and (b)
simultaneous with the occurrence of such forfeiture, Acquisition shall forfeit a portion of the
Units it then holds (such forfeited Units, the “Forfeited Units”) as determined based on the
product of (i) the total Units then held by Acquisition (prior to giving effect to the forfeiture
of such Forfeited Units) multiplied by (ii) the fraction obtained by dividing the Forfeited Units
in Holdings at issue by the total Units in Holdings then outstanding (prior to giving effect to the
forfeiture of such Forfeited Units in Holdings).



     Section 5.7.     Class A Common Stock. Notwithstanding anything herein to the contrary,
the Partnership shall not at any time permit the Transfer of any Units that would allow Acquisition
and Holdings to become the beneficial owner in the aggregate of greater than 9.99% of the then
outstanding shares of Class A Common Stock of Publico (determined in accordance with Rule 13d-3
promulgated under the Securities Act).



     Section 5.8.     Register. The register of the Partnership shall be the definitive record
of ownership of each Unit and all relevant information with respect to each Partner. Unless the



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General Partner shall determine otherwise, Units shall not be certificated and recorded in the
books and records of the Partnership.



ARTICLE VI.

DISTRIBUTIONS




     Section 6.1.     Distributions of Net Cash Flow. The General Partner, in its discretion,
may authorize distributions by the Partnership to the Partners, it being agreed that all
distributions shall be made pro rata in accordance with the Partners’ respective Percentage
Interests.



     Section 6.2.     Tax Distributions. Without limiting the foregoing, except to the extent
otherwise provided under Section 7.5, if the General Partner reasonably determines that the taxable
income of the Partnership for any Fiscal Year will give rise to taxable income for the Partners
(“Net Taxable Income”), the General Partner shall to the extent of Net Cash Flow, first cause the
Partnership to distribute Net Cash Flow for purposes of allowing Partners (and their constituents)
to fund their (or their members’) respective income tax liabilities deemed to be attributable for
purposes of this Agreement to their (or their members’) respective shares of Net Taxable Income
(the “Tax Distributions”). The Tax Distributions payable to each such Partner with respect to any
Fiscal Year shall be computed based upon the General Partner’s estimate of the Net Taxable Income
allocable to such Partner in accordance with the terms hereof, multiplied by the Assumed Tax Rate
(the “Tax Amount”). For purposes of computing the Tax Amount, the effect of any benefit to a
Partner under Section 743(b) of the Code or other special allocations of income or deductions shall
be ignored. Tax Distributions shall only be effected through distributions with respect to
Partnership Interests, and shall only be made to Partners. Tax Distributions shall be calculated
and paid no later than one day prior to each quarterly due date (without giving effect to any
extensions) for the payment by corporations of estimated taxes under the Code in the following
manner (A) for the first quarterly period, 25% of the Tax Amount, (B) for the second quarterly
period, 50% of the Tax Amount, less the prior Tax Distributions for such Fiscal Year, (C) for the
third quarterly period, 75% of the Tax Amount, less the prior Tax Distributions for such Fiscal
Year and (D) for the fourth quarterly period, 100% of the Tax Amount, less the prior Tax
Distributions for such Fiscal Year. Following each Fiscal Year, and no later than one day prior to
the due date (without giving effect to any extensions) for the payment by corporations of income
taxes for such Fiscal Year, the General Partner shall make an amended calculation of the Tax Amount
for such Fiscal Year (the “Amended Tax Amount”), and shall cause the Partnership to distribute a
Tax Distribution, out of Net Cash Flow, to the extent that the Amended Tax Amount so calculated
exceeds the cumulative Tax Distributions previously made by the Partnership in respect of such
Fiscal Year. If the Amended Tax Amount is less than the cumulative Tax Distributions previously
made by the Partnership in respect of the relevant Fiscal Year, then the difference (the “Credit
Amount”) shall be applied against, and shall reduce, the amount of Tax Distributions made to the
Partners for subsequent Fiscal Years. Within thirty (30) days following the date on which the
Partnership files its U.S. federal income tax return for a Fiscal Year, the General Partner shall
make a final calculation of the Tax Amount for such Fiscal Year (the “Final Tax Amount”) and shall
cause the Partnership to distribute a Tax Distribution, out of Net Cash Flow, to the extent that
the Final Tax Amount so calculated exceeds the Amended Tax Amount. If the Final Tax Amount is less
than the Amended Tax Amount in respect of the relevant Fiscal Year, then the difference



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(“Additional Credit Amount”) shall be applied against, and shall reduce, the amount of Tax
Distributions made to the Partners for subsequent Fiscal Years. Any Credit Amount and Additional
Credit Amount applied against future Tax Distributions shall be treated as an amount actually
distributed pursuant to this Section 6.2 for purposes of the computations described herein.



     Section 6.3.     Liquidation Distributions. Distributions upon liquidation shall be made
as provided in Section 11.1.



     Section 6.4.     Limitation on Distributions. Notwithstanding any provision to the
contrary contained in this Agreement, the General Partner shall not make a Partnership distribution
to any Partner if such distribution would violate Section 6.07 of the Act or other applicable Law.



ARTICLE VII.

ALLOCATIONS




     Section 7.1.     Allocations of Profits. Profits for any Fiscal Year shall be allocated
to the Partners:



          (a)     first, in an amount equal to the aggregate excess of the Losses allocated to each Partner
pursuant to Section 7.2(a) hereof over the aggregate amount of Profits allocated to such Partner
under this Section 7.1(a) in proportion to such excesses until such excesses equal zero; and




          (b)     thereafter to the Partners, in proportion to their Percentage Interests which shall be
determined based on the daily weighted average Percentage Interest held by each Partner during the
applicable Fiscal Year.




     Section 7.2.     Allocation of Losses. Losses for any Fiscal Year shall be allocated as
set forth in Section 7.2(a) below, subject to the limitations of Section 7.2(b) below.



          (a)     Losses for any Fiscal Year shall be allocated to the Partners in accordance with their
Percentage Interests which shall be determined based on the daily weighted average Percentage
Interest held by each Partner during the applicable Fiscal Year.




          (b)     The Losses allocated pursuant to Section 7.2(a) hereof shall not exceed the maximum amount
of Losses that can be so allocated without causing any Limited Partner to have an adjusted capital
account deficit at the end of any Fiscal Year. All Losses in excess of the limitations set forth
in this Section 7.2(b) shall be allocated to the General Partner.




     Section 7.3.     Special Allocations.



          (a)     If there is a net decrease in Partnership Minimum Gain or Partner Nonrecourse Debt Minimum
Gain (determined in accordance with the principles of Regulations Sections 1.704-2(d) and
1.704-2(i)) during any Partnership taxable year, the Partners shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal
to their respective shares of such net decrease during such year, determined pursuant to
Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be


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so allocated shall be determined in accordance with Regulations Section 1.704-2(f). This
Section 7.3(a) is intended to comply with the minimum gain chargeback requirements in such Sections
of the Regulations and shall be interpreted consistently therewith; including that no chargeback
shall be required to the extent of the exceptions provided in Regulations Sections 1.704-2(f) and
1.704-2(i)(4).




          (b)     If any Partner unexpectedly receives any adjustments, allocations, or distributions
described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income
and gain shall be specially allocated to such Partner in an amount and manner sufficient to
eliminate the deficit balance in such Partner’s Adjusted Capital Account Balance created by such
adjustments, allocations or distributions as promptly as possible; provided, that an allocation
pursuant to this Section 7.3(b) shall be made only to the extent that a Partner would have a
deficit Adjusted Capital Account Balance in excess of such sum after all other allocations provided
for in this Article VII have been tentatively made as if this Section 7.3(b) were not in this
Agreement. This Section 7.3(b) is intended to comply with the “qualified income offset” requirement
of the Code and shall be interpreted consistently therewith.




          (c)     If any Partner has a deficit Capital Account at the end of any Fiscal Year which is in
excess of the sum of (i) the amount such Partner is obligated to restore, if any, pursuant to any
provision of this Agreement, and (ii) the amount such Partner is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Section 1.704-2(g)(1) and 1.704-2(i)(5), each
such Partner shall be specially allocated items of Partnership income and gain in the amount of
such excess as quickly as possible; provided, that an allocation pursuant to this Section 7.3(c)
shall be made only if and to the extent that a Partner would have a deficit Capital Account in
excess of such sum after all other allocations provided for in this Article VII have been
tentatively made as if Section 7.3(b) and this Section 7.3(c) were not in this Agreement.




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




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




          (f)     Any special allocations of income or gain pursuant to Sections 7.3(b) or 7.3(c) hereof
shall be taken into account in computing subsequent allocations pursuant to Section 7.1 and 7.2 and
this Section 7.3(f), so that the net amount of any items so allocated and all other items allocated
to each Partner shall, to the extent possible, be equal to the net amount that would have been
allocated to each Partner if such allocations pursuant to Sections 7.3(b) or 7.3(c) had not
occurred.




     Section 7.4.     Tax Allocations. For income tax purposes, each item of income, gain,
loss and deduction of the Partnership shall be allocated among the Partners in the same manner as
the corresponding items of Profits and Losses and specially allocated items are allocated for
Capital Account purposes; provided, that in the case of any asset the Carrying Value of which
differs



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from its adjusted tax basis for U.S. federal income tax purposes, income, gain, loss and
deduction with respect to such asset shall be allocated solely for income tax purposes in
accordance with the principles of Sections 704(b) and (c) of the Code (in any manner determined by
the General Partner and permitted by the Code and the Regulations) so as to take account of the
difference between Carrying Value and adjusted basis of such asset; provided, further, that the
Partnership shall use the traditional method (as such term is defined in Regulations Section
1.704-3(b)(1)) for all Section 704(c) allocations and “reverse Section 704(c) allocations”. As a
consequence of the election that the Partnership is to make under Code Section 754, Holdco will
timely furnish the Partnership with the notice required under Section 1.743-1(k)(2) of the
Regulations that relates to its purchase of Units in the Partnership from Acquisition and following
that, the Partnership will timely make any resulting adjustments to income, gain, loss or deduction
as well as to basis of Partnership property under Section 743(b) in accordance with Section
1.743-1(k) and duly inform Holdco of those adjustments.



     Section 7.5.     Tax Advances. To the extent the Partnership reasonably believes that it
is required by Law to withhold or to make tax payments on behalf of or with respect to any Partner
or the Partnership is subjected to tax itself by reason of the status of any Partner (“Tax
Advances”), the General Partner may withhold such amounts and make such tax payments as so
required. All Tax Advances made on behalf of a Partner shall be repaid by reducing the amount of
the current or next succeeding distribution or distributions which would otherwise have been made
to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the
proceeds of liquidation otherwise payable to such Partner. For all purposes of this Agreement such
Partner shall be treated as having received the amount of the distribution that is equal to the Tax
Advance. Each Partner hereby agrees to indemnify and hold harmless the Partnership and the other
Partners from and against any liability (including, without limitation, any liability for taxes,
penalties, additions to tax or interest other than any penalties, additions to tax or interest
imposed as a result of the Partnership’s failure to withhold or make a tax payment on behalf of
such Partner which withholding or payment is required pursuant to applicable Law but only to the
extent amounts sufficient to pay such taxes were not timely distributed to the Partner pursuant to
Section 6.2) with respect to income attributable to or distributions or other payments to such
Partner.



     Section 7.6.     Tax Matters. The General Partner shall be the initial “tax matters
partner” within the meaning of Section 6231(a)(7) of the Code (the “Tax Matters Partner”). The
Partnership shall file as a partnership for federal, state and local income tax purposes, except
where otherwise required by Law. All elections required or permitted to be made by the Partnership,
and all other tax decisions and determinations relating to federal, state or local tax matters of
the Partnership, shall be made by the Tax Matters Partner, in consultation with the Partnership’s
attorneys and/or accountants. Tax audits, controversies and litigations shall be conducted under
the direction of the Tax Matters Partner. The Tax Matters Partner shall keep the other Partners
reasonably informed as to any tax actions, examinations or proceedings relating to the Partnership
and shall submit to the other Partners, for their review and comment, any settlement or compromise
offer with respect to any disputed item of income, gain, loss, deduction or credit of the
Partnership. As soon as reasonably practicable after the end of each Fiscal Year, the Partnership
shall send to each Partner a copy of U.S. Internal Revenue Service Schedule K-1, and any comparable
statements required by applicable state or local income tax Law, with respect to such Fiscal Year.
The Partnership also shall provide the Partners with such



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other information as may be reasonably requested for purposes of allowing the Partners to
prepare and file their own tax returns. The General Partner shall maintain and not revoke the
election pursuant to Section 754 for the Partnership which is currently in effect.



     Section 7.7.     Other Allocation Provisions. Certain of the foregoing provisions and the
other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to
comply with Regulations Section 1.704-1(b) and shall be interpreted and applied in a manner
consistent with such regulations. Sections 4.3, 7.1, 7.2 and 7.3 may be amended at
any time by the General Partner if necessary, in the opinion of tax counsel to the Partnership, to
comply with such regulations, so long as any such amendment does not materially change the relative
economic interests of the Partners.



ARTICLE VIII.

BOOKS AND RECORDS




     Section 8.1.     Books and Records; Periodic Reporting.



          (a)     The Partnership shall keep accurate and complete books of account and records on an
accrual basis prepared in accordance with generally accepted accounting principles. All financial
statements shall be accurate in all material respects and shall present fairly the financial
position and results of operations of the Partnership. The books of account and records of the
Partnership shall at all times be maintained at the principal office of the Partnership.




          (b)     No later than 90 days after the end of each Fiscal Year, the General Partner shall furnish
the Limited Partners with financial statements prepared in accordance with generally accepted
accounting principles.




          (c)     No later than 60 days after the end of each fiscal quarter (other than the last fiscal
quarter) in each Fiscal Year, the General Partner shall furnish the Limited Partners with financial
statements for such fiscal quarter and for the period from the beginning of the then current Fiscal
Year to the end of such fiscal quarter prepared in accordance with generally accepted accounting
principles, subject to normal year end adjustments.




          (d)     The Partnership’s federal, state and local income and other tax returns shall be prepared
at the expense of the Partnership by a firm of certified public accountants selected by the General
Partner. All tax returns shall be signed on behalf of the Partnership and filed by the General
Partner.




     Section 8.2.     Right to Inspection. Each Limited Partner shall have the right at all
reasonable times upon reasonable notice to examine and copy at its expense the books and records of
the Partnership.



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ARTICLE IX.

ADMISSION AND WITHDRAWAL OF PARTNERS; ASSIGNMENT; REMOVAL OF

GENERAL PARTNER




     Section 9.1.     Transfer by Limited Partner. No Limited Partner, owner of any beneficial
ownership interest in any Limited Partner, nor any Assignee (as hereinafter defined) may, absent
the prior written consent of the General Partner, which consent may be withheld for any reason or
no reason, cause or permit a Transfer. Without such written consent of the General Partner, any
transferee of a Limited Partner (an “Assignee”) shall not be entitled to become a substitute
Limited Partner and upon any transfer to, or foreclosure or other realization of, any Partnership
Interest by an Assignee, such Assignee shall only be entitled to receive any distributions payable
with respect to the Units which were the subject of such Transfer and shall not be entitled to
consent or vote on any matter requiring the consent or approval of the Partners (or any of them).
The transferring Limited Partner will remain a Partner even if it has transferred all of its Units
to one or more Assignee(s) until such time as the Assignee(s) is admitted to the Partnership as a
Limited Partner in accordance with the terms of Section 9.2 below.



     Section 9.2.     Admission of Substituting Partners. An Assignee will become a substitute
Limited Partner only if and when each of the following conditions is satisfied:



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




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




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




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




          (e)     General Partner’s determination that such Transfer is not prohibited under the provisions
of Section 9.4 hereof.




     Section 9.3.     Additional and Substitute General Partners; Transfer by General Partner.
No Person may be admitted to the Partnership as an additional or substitute general partner (and
the General Partner or any additional or substitute general partner shall not cause or permit a
Transfer of all or any portion of its interests hereunder or admit any additional or substitute
general partner) without the prior written consent or ratification of all the Limited Partners. The
consent of all the Limited Partners shall be deemed to have been given in the event (and each
Limited Partner agrees to provide a written consent or ratification to such admission, substitution
or other Transfer as requested by the General Partner) such additional general partner, substitute



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general partner or other transferee has been approved of by a Majority in Interest of the
Limited Partners. Without limiting any other provisions contained herein, no general partner
(including, without limitation, the General Partner) shall be entitled to Transfer all of its Units
or to withdraw from being a general partner of the Partnership unless following such Transfer or
withdrawal at least one general partner of the Partnership having the authority granted to the
General Partner hereunder (and subject to the requirements of Section 3.4 hereof) shall remain in
place. To the fullest extent permitted by Law, any purported admission, withdrawal or removal of
the General Partner that is not in accordance with this Agreement shall be null and void.



     Section 9.4.     Further Restrictions on Transfer. In no event may a Partner, any owner
of any beneficial ownership interest in any Partner or any Assignee, Transfer all or any portion of
its Partnership Interest if the effect of such action would cause the Partnership to breach or be
in default under any agreement, document, contract or instrument to which the Partnership is a
party, or by which the Partnership or the assets of the Partnership are bound. Additionally, in no
event may a Transfer be made by any Partner or Assignee if:



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




          (b)     such Transfer would require the registration of the applicable transferred Unit pursuant
to any applicable United States federal or state securities laws (including, without limitation,
any Applicable Securities Laws) or other foreign securities laws or would constitute a non-exempt
distribution pursuant to applicable state securities laws;




          (c)     such Transfer would cause any portion of the assets of the Partnership to constitute
assets of any employee benefit plan pursuant to the regulations issued by the U.S. Department of
Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of Federal
Regulations, or any successor regulations;




          (d)     such Transfer would cause any portion of the assets of the Partnership to become “plan
assets” of any benefit plan investor within the meaning of regulations issued by the U.S.
Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of
Federal Regulations, or any successor regulations, or to be regulated under the Employee Retirement
Income Security Act of 1974, as amended from time to time; or




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




     Section 9.5.     Exchange Rights. Notwithstanding anything to the contrary contained
herein, any Transfer of Units by Acquisition to Holdco in accordance with the provisions of Article
V of that certain Amended and Restated Certificate of Incorporation of HFF, Inc. shall not be
subject to the prior written consent of any of the Partners.



     Section 9.6.     Permitted Transfers. Further notwithstanding anything to the contrary
contained herein (but subject to the provisions of Section 9.4), (i) Holdings or any Member of



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Holdings (or its representatives) may Transfer all or a portion of any Units in Holdings (A)
to (x) such transferor’s immediate family members or trusts established for the benefit of such
family members for estate planning purposes, (y) a Charity for gratuitous purposes or (z) Holdings
or any other Member of Holdings, or (B) by devise or descent or by operation of law upon the death
or disability of such Member of Holdings, (ii) without limiting any of the foregoing, a Member of
Holdings may withdraw or be involuntarily withdrawn as a Member of Holdings but continue to
exercise rights as an interest holder and/or a member thereof, in all events to the extent provided
in the Holdings Operating Agreement, (iii) Units in Holdings and/or related rights may be directly
or indirectly sold, assigned, pledged, transferred or otherwise disposed of pursuant to the terms
of the Holdings Operating Agreement, (iv) “TRA Units” in Holdings (as defined in the Holdings
Operating Agreement) and/or related rights may be directly or indirectly sold, assigned, pledged,
transferred or otherwise disposed of in accordance with the Holdings Operating Agreement, (v) any
interests of Holdings in Acquisition may be sold, assigned, pledged, transferred, or otherwise
disposed of in accordance with the terms of the Holdings Operating Agreement and any interests of
Publico in Holdco may be sold, assigned, pledged, transferred or otherwise disposed of in
accordance with the terms of the organizational documents of Publico, and (vi) any Transfer of
shares of Class A Common Stock or Class B Common Stock in accordance with applicable Law, the
Transaction Agreement and the organizational documents of Publico shall not be deemed to be a
prohibited Transfer hereunder. Additionally, the Partners hereby agree (absent a determination
that the same will result in the Partnership being obligated (or being deemed to be obligated) for
the repayment of all or any portion of the Loan Facility under Applicable Securities Laws or
otherwise) to pledge their Units as and to the extent required under the Loan Facility.



     Section 9.7.     Withdrawal. If a Partner ceases to hold any Units, then such Partner
shall withdraw from the Partnership and cease to be a Partner and to have the power to exercise any
rights or powers of a Partner when all of such Partner’s Assignees have been admitted as Partners
in accordance with the provisions hereof.



ARTICLE X.

DISSOLUTION OF PARTNERSHIP




     Section 10.1.     No Dissolution. The Partnership shall not be dissolved by the admission
of additional Partners in accordance with the terms of this Agreement. The Partnership may be
dissolved, liquidated and terminated only pursuant to the provisions of this Article X, and the
Partners hereby irrevocably waive any and all other rights they may have to cause a dissolution of
the Partnership or a sale or partition of any or all of the Partnership assets.



     Section 10.2.     Events of Dissolution. The Partnership shall be dissolved upon the
occurrence of any of the following events:



          (a)     the voluntary agreement of the General Partner and the Limited Partners to dissolve the
Partnership;




          (b)     the Incapacity or removal of the General Partner or the occurrence of a Disabling Event
with respect to the General Partner; provided, that the Partnership will not be dissolved or
required to be wound up in connection with any of the events specified in this


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Section 10.2(b) if: (i) at the time of the occurrence of such event there is at least one
other general partner of the Partnership who is hereby authorized to, and elects to, carry on the
business of the Partnership; or (ii) all remaining Limited Partners consent in writing to (or
otherwise ratify) the continuation of the business of the Partnership and the appointment of
another general partner of the Partnership within 90 days following the occurrence of any such
Incapacity or removal; or




          (c)     any other act constituting a dissolution under applicable Law.




ARTICLE XI.

LIQUIDATION OF THE PARTNERSHIP




     Section 11.1.     Liquidation. In the event of a dissolution of the Partnership where the
business of the Partnership shall not be continued, liquidation shall occur. The General Partner
shall supervise the liquidation of the Partnership. In the event of any liquidation of the
Partnership under this Agreement or the Act, the proceeds of liquidating the Partnership shall be
applied and distributed in the following order of priority (each item to be satisfied in full in
the order listed below before any of such proceeds are allocated to the subsequent item):



          (a)     first, to creditors, including Partners who are creditors (to the extent not otherwise
prohibited by Law), in satisfaction of liabilities of the Partnership (whether by payment or the
making of reasonable provision for payment therefor), other than liabilities for which reasonable
provision for payment has been made and liabilities for interim distributions to Partners and
distributions to Partners on withdrawal; then




          (b)     second, to the setting up of any Reserves which the General Partner (or, if applicable,
the liquidating trustee) determines to be reasonably necessary for any contingent liabilities of
the Partnership arising out of, or in connection with, a Partnership liability; then




          (c)     third, to the Partners in proportion to their Percentage Interests.




     Notwithstanding anything to the contrary in this Agreement, upon a liquidation within the
meaning of Section 1.704-l(b)(2)(ii)(g) of the Regulations, if any Partner has a deficit Capital
Account (after giving effect to all contributions, distributions, allocations and other Capital
Account adjustments for all taxable years, including the year during which such liquidation
occurs), such Partner shall have no obligation to make any Capital Contribution, and the negative
balance of such Partner’s Capital Account shall not be considered a debt owed by such Partner to
the Partnership or to any other Person for any purpose whatsoever.



     Upon completion of the winding up, liquidation and distribution of the assets, the Partnership
shall be deemed terminated. The General Partner shall not receive any additional compensation for
any services performed pursuant to this Article XI.



     Section 11.2.     Deemed Distribution and Reconstitution. Notwithstanding any other
provision of this Article XI, in the event the Partnership is liquidated within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g) but the Partnership is not liquidated under this Article
XI, the assets and liabilities shall be deemed to be distributed and recontributed in a manner
consistent with Regulations Section 1.704-1(b).



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     Section 11.3.     Rights of Limited Partners. Except as otherwise provided in this
Agreement, each Limited Partner shall look solely to the assets of the Partnership for the return
of his Capital Contribution and shall have no right or power to demand or receive property other
than cash from the Partnership. No Limited Partner shall have priority over any other Limited
Partner as to the return of its Capital Contributions, distributions or allocations.



ARTICLE XII.

LIABILITY AND INDEMNIFICATION




     Section 12.1.     Liability of Partners.



          (a)     No Limited Partner shall be liable for any debt obligation or liability of the Partnership
or of any other Partner or have any obligation to restore any deficit balance in its Capital
Account solely by reason of being a Partner of the Partnership.




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




          (c)     To the extent that, at law or in equity, any Partner (including without limitation, the
General Partner) has duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or to another Partner, the Partners (including without limitation, the General Partner)
acting under this Agreement will not be liable to the Partnership or to any such other Partner for
their 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 any Partner (including
without limitation, the General Partner) otherwise existing at Law or in equity, are agreed by the
Partners to modify to that extent such other duties and liabilities of the Partners (including
without limitation, the General Partner).




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




     Section 12.2.     Indemnification.



          (a)     To the fullest extent permitted by law, the Partnership shall indemnify any person (and
such person’s heirs, executors or administrators) who was or is made or is threatened to be made a
party to or is otherwise involved in any threatened, pending or completed action, suit or
proceeding (brought in the right of the Partnership or otherwise), whether civil, criminal,
administrative or investigative, and whether formal or informal, including appeals, by reason of
the fact that such person, or a person for whom such person was the legal representative, is or


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was a Partner (including without limitation, the General Partner) or a director, officer or
agent of a Partner (including without limitation, the General Partner) or the Partnership or, while
a director, officer or agent of a Partner (including without limitation, the General Partner) or
the Partnership, is or was serving at the request of the Partnership as a director, officer,
partner, trustee, employee or agent of another corporation, partnership, joint venture, trust,
limited liability company, nonprofit entity or other enterprise, for and against all loss and
liability suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement reasonably incurred by such person or such heirs, executors or administrators in
connection with such action, suit or proceeding, including appeals; provided that such person shall
not be entitled to indemnification hereunder only to the extent such person’s conduct constituted
fraud, bad faith or willful misconduct. Notwithstanding the preceding sentence, except as otherwise
provided in Section 12.2(c), the Partnership shall be required to indemnify a person described in
such sentence in connection with any action, suit or proceeding (or part thereof) commenced by such
person only if the commencement of such action, suit or proceeding (or part thereof) by such person
was authorized by the General Partner.




          (b)     To the fullest extent permitted by Law, the Partnership shall promptly pay expenses
(including attorneys’ fees) incurred by any Person described in Section 12.2(a) in appearing at,
participating in or defending any action, suit or proceeding in advance of the final disposition of
such action, suit or proceeding, including appeals, upon presentation of an undertaking on behalf
of such person to repay such amount if it shall ultimately be determined that such person is not
entitled to be indemnified under this Section 12.2 or otherwise. Notwithstanding the preceding
sentence, except as otherwise provided in Section 12.2(c), the Partnership shall be required to pay
expenses of a person described in such sentence in connection with any action, suit or proceeding
(or part thereof) commenced by such person only if the commencement of such action, suit or
proceeding (or part thereof) by such person was authorized by the General Partner.




          (c)     If a claim for indemnification (following the final disposition of such action, suit or
proceeding) or advancement of expenses under this Section 12.2 is not paid in full within thirty
(30) days after a written claim therefor by any person described in Section 12.2(a) has been
received by the Partnership, such person may file suit to recover the unpaid amount of such claim
and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting
such claim. In any such action the Partnership shall have the burden of proving that such person is
not entitled to the requested indemnification or advancement of expenses under applicable law.




          (d)     To the fullest extent permitted by law, the Partnership may purchase and maintain
insurance on behalf of any Person described in Section 12.2(a) against any liability asserted
against such Person, whether or not the Partnership would have the power to indemnify such person
against such liability under the provisions of this Section 12.2 or otherwise.




          (e)     The provisions of this Section 12.2 shall be applicable to all actions, claims, suits or
proceedings made or commenced after the date of this Agreement, whether arising from acts or
omissions to act occurring before or after its adoption. The provisions of this Section 12.2 shall
be deemed to be a contract between the Partnership and each person entitled to indemnification
under this Section 12.2 (or legal representative thereof) who serves in such


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capacity at any time while this Section 12.2 and the relevant provisions of applicable law, if
any, are in effect, and any amendment, modification or repeal hereof shall not affect any rights or
obligations then existing with respect to any state of facts or any action, suit or proceeding then
or theretofore existing, or any action, suit or proceeding thereafter brought or threatened based
in whole or in part on any such state of facts. If any provision of this Section 12.2 shall be
found to be invalid or limited in application by reason of any law or regulation, it shall not
affect the validity of the remaining provisions hereof. The rights of indemnification provided in
this Section 12.2 shall neither be exclusive of, nor be deemed in limitation of, any rights to
which any person may otherwise be or become entitled or permitted by contract, this Partnership
Agreement or as a matter of law, both as to actions in such person’s official capacity and actions
in any other capacity, it being the policy of the Partnership that indemnification of any person
whom the Partnership is obligated to indemnify pursuant to Section 12.2(a) shall be made to the
fullest extent permitted by law.




     For purposes of this Section 12.2, references to “other enterprises” shall include
employee benefit plans; references to “fines” shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to “serving at the request of the
Partnership” shall include any service as a director, officer, employee or agent of the Partnership
which imposes duties on, or involves services by, such director, officer, employee, or agent with
respect to an employee benefit plan, its participants, or beneficiaries.



     This Section 12.2 shall not limit the right of the Partnership, to the extent and in
the manner permitted by law, to indemnify and to advance expenses to, and purchase and maintain
insurance on behalf of, persons other than persons described in Section 12.2(a).



ARTICLE XIII.

MISCELLANEOUS




     Section 13.1.     Additional Documents and Acts. In connection with this Agreement, as
well as all transactions contemplated by this Agreement, each Partner agrees to execute and deliver
such additional documents and instruments, and to perform such additional acts as may be necessary
or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of
this Agreement, and all such transactions. All approvals of a Partner hereunder shall be in
writing.



     Section 13.2.     Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, INCLUDING BOTH MATTERS OF INTERNAL
LAW AND CONFLICT OF LAWS.



     Section 13.3.     Severability. If this Agreement or any portion thereof is, or the
operations contemplated hereby are, found to be inconsistent with or contrary to any valid
applicable laws or official orders, rules and regulations, the inconsistent or contrary provisions
of this Agreement shall be null and void and such laws, orders, rules and regulations shall control
and, as so modified, shall continue in full force and effect; provided, however, that nothing
herein contained shall be construed as a waiver of any right to question or contest any such Law,
order, rule or regulation in any forum having jurisdiction.



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     Section 13.4.     Entire Agreement. This instrument contains all of the understandings
and agreements of whatsoever kind and nature existing between the parties hereto with respect to
this Agreement and the rights, interests, understandings, agreements and obligations of the
respective parties pertaining to the subject matter set forth herein.



     Section 13.5.     Binding Effect. Except as herein otherwise expressly stipulated to the
contrary, this Agreement shall be binding upon and inure to the benefit of the parties signatory
hereto, and their respective successors and permitted assigns.



     Section 13.6.     Agreement Restricted to Partners. This Agreement is solely for the
parties hereto and no covenant or other provision herein, including, but not limited to, any
obligation to make any Capital Contribution, shall create any rights in, or give rise to any
obligation to or any cause of action by, any person not a party hereto.



     Section 13.7.     Counterparts. This Agreement may be executed in a number of
counterparts, each of which shall be deemed an original and all of which shall constitute one and
the same Agreement.



     Section 13.8.     Power of Attorney; Amendments. This Agreement (including any exhibits
hereto) may be amended, supplemented, waived or modified by the written consent of the General
Partner; provided that no such amendment, supplement, waiver or modification shall adversely affect
the Partnership Interests held by any Limited Partner in any material respect without the prior
written consent of each Limited Partner so affected (it being agreed, without limitation, that any
amendment, supplement, waiver or modification with respect to the management of the Partnership as
contemplated in this Agreement, the determination of each Partner’s Percentage Interest, the rights
of each Partner to distributions hereunder (including, without limitation, Tax Distributions), the
allocation provisions, the transfer provisions and this Section 13.8, which in any such instance is
any way adverse to any Limited Partner (or its constituent members) shall be deemed to adversely
affect the Partnership Interests held by such Limited Partner in a material respect and shall thus
be subject to such Partner’s prior written consent); provided further, that Exhibit A to this
Agreement shall be deemed amended from time to time to reflect the admission or substitution of a
new Partner, the withdrawal or resignation of a Partner, and the adjustment of the Units resulting
from any Transfer, forfeiture or other disposition of a Unit, in each case as and to the extent the
same is performed in accordance with (or otherwise expressly permitted under) the provisions
hereof; and Exhibit B shall be deemed amended from time to time upon notice to the Partnership by
Acquisition of any transfer, exchange or redemption of Units in Holdings in accordance with the
terms of the Holdings Operating Agreement. Notwithstanding anything to the contrary contained
herein, the General Partner shall not in any way amend the Profit Participation Plan absent the
written consent of each Partner hereto.



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



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



     Section 13.9.     Notices. Any notices and other communications required or permitted in
this Agreement shall be in writing, and delivered personally or sent (a) by overnight courier, (b)
by facsimile or (c) by registered or certified mail, postage prepaid in each instance, addressed to
each Limited Partner and the General Partner at the applicable address set forth below:



	 	 	 	 	 
	If to Acquisition:	 	c/o HFF Holdings LLC
	 

	 	 	 	2000 Post Oak Boulevard, Suite 2000
	 

	 	 	 	One Post Oak Central
	 

	 	 	 	Houston, TX 77056
	 

	 	 	 	Facsimile: 713.527.8725
	 

	 	 	 	Attn: Nancy Goodson, Chief Operating Officer
	 
	 	 	 	 
	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	c/o HFF Holdings LLC
	 

	 	 	 	429 Fourth Avenue, Suite 200
	 

	 	 	 	Pittsburgh, PA 15219
	 

	 	 	 	Facsimile: 412.281.2792
	 

	 	 	 	Attn: John H. Pelusi, Jr., Managing Member
	 
	 	 	 	 
	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	Dechert LLP
	 

	 	 	 	90 State House Square, 12th Floor
	 

	 	 	 	Hartford, CT 06103-3702
	 

	 	 	 	Facsimile: 860.524.3930
	 

	 	 	 	Attn: John J. Gillies, Esq.
	 
	 	 	 	 
	If to Holdco:	 	 
	 
	 	 	 	 
	 

	 	 	 	_______________________________
	 

	 	 	 	_______________________________
	 

	 	 	 	_______________________________
	 

	 	 	 	Facsimile: _____________________
	 

	 	 	 	Attn: _________________________






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	If to General Partner:	 	 
	 
	 	 	 	 
	 

	 	 	 	_______________________________
	 

	 	 	 	_______________________________
	 

	 	 	 	_______________________________
	 

	 	 	 	Facsimile: ______________________
	 

	 	 	 	Attn: __________________________





Unless otherwise specified herein, such notices or other communications shall be deemed effective
(a) on the date received, if personally delivered, (b) two business days after been sent by
overnight courier, (c) one business day after receipt of confirmation of deliver if sent by
facsimile and (d) three business days after being sent by registered or certified mail. Each of
the parties hereto shall be entitled to specify a different address or facsimile number by giving
notice as aforesaid to each of the other parties hereto.




     Section 13.10.     Authorized Representative. Each Partner may from time to time
designate in writing to the other Partners one or more duly authorized representatives of such
Partner having the authority to act on behalf of such Partner (and such representative(s) may
thereafter act on behalf such Partner absent further notice in writing from such Partner to the
other Partners).



     Section 13.11.     Amended and Restated Agreement. This Agreement amends and restates the
Existing Agreement in its entirety, as such upon the occurrence of the Effective Time, the Existing
Agreement and the provisions thereof (including, without limitation, those relating to any election
to “opt-in” to Article 8 of the Delaware Uniform Commercial Code and any and all certificates
issued in connection herewith) shall cease to be of any force and effect, and the Partnership shall
thereafter be governed in accordance with the terms hereof.



[SIGNATURE PAGE FOLLOWS]





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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered as of the day and year first above written.



	 	 	 	 	 
	 	GENERAL PARTNER:


HOLLIDAY GP CORP., a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	John H. Pelusi, Jr. 	 
	 	 	Title:  	President 	 
	 



	 	 	 	 	 
	 	LIMITED PARTNERS:


HFF LP ACQUISITION LLC, a Delaware limited liability company

 	 
	 	By:  	HFF Holdings LLC, a Delaware limited liability company, its Member
 	 
	 	 	 	 
	 	 	By:  	 	 
	 	 	  	Name: John H. Pelusi, Jr.	 
	 	 	  	Title: Managing Member	 
	 




	 	 	 	 	 
	 	HFF PARTNERSHIP HOLDINGS LLC, a Delaware limited liability company 	 
	 	 	 	 
	 	 	 	 
	 	By:  	HFF Inc., a Delaware corporation, its sole Member 	 
	 	 	 	 
	 	 	By:  	 	 
	 	 	  	Name: 	 
	 	 	  	Title: 	 
	 





 








 








EXHIBIT A




PARTNERSHIP INTERESTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	INITIAL	 
	PARTNER	 	INITIAL UNITS	 	 	PARTNERSHIP INTEREST	 
	Holliday GP Corp.
	 	 	—	 	 	 	      1%	 
	HFF LP Acquisition LLC
	 	 	—	 	 	 	    —%	 
	HFF Partnership Holdings LLC
	 	 	—	 	 	 	    —%	 
	Total
	 	 	—	 	 	 	100%	 







 









 








EXHIBIT B




	 	 	 	 	 
	MEMBERS	 	UNITS	 
	 
	 	 	 	 






 









 








EXHIBIT C




FORM OF CERTIFICATE





 









 








EXHIBIT D




FORM OF EMPLOYMENT AGREEMENT