Document:

EX-10.5

 Exhibit 10.5 

SHARE TRANSFER AND LIQUIDATED DAMAGES AGREEMENT 

THIS SHARE TRANSFER AND LIQUIDATED DAMAGES AGREEMENT (this “Agreement”), dated as of December 23, 2014, to be
effective as of the Closing, is made by and among Colony Financial, Inc., a Maryland corporation (“CFI”), Colony Capital Holdings, LLC, a Delaware limited liability company (“CC Holdings”), Colony Capital, LLC, a
Delaware limited liability company (“CC”), and Richard B. Saltzman (“Saltzman”). Any capitalized term that is used but not otherwise defined in this Agreement shall have the meaning set forth in the Contribution
Agreement by and among CC Holdings, CFI, CC, Colony Capital OP Subsidiary LLC (“OP”), a Delaware limited liability company, FHB Holding LLC, a Delaware limited liability company, Richard B. Saltzman and CFI RE Masterco LLC, a
Delaware limited liability company, dated as of the date hereof (the “Contribution Agreement”). 
 WHEREAS, the
parties desire to enter into this Agreement, pursuant to which CC Holdings or one of its Subsidiaries will deliver to Saltzman shares of CFI Class A Common Stock equal to the CC Closing Share Consideration (as adjusted pursuant to
Section 1(b) below, the “Closing Saltzman Shares”) and (ii) additional shares of CFI Class A Common Stock equal to (A) the aggregate number of OP Common Units delivered by OP pursuant to
Section 3.5(h) of the Contribution Agreement, if any, multiplied by (B) 22.123% (the “Contingent Consideration Saltzman Shares” and together with the Closing Saltzman Shares, the “Saltzman
Shares”). 
 NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants, terms and conditions set
forth herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 

1. DELIVERY OF THE SALTZMAN SHARES. 
 (a)
Delivery. CC shall deliver to Saltzman the number of shares of CFI Class A Common Stock equal to (i) on or as soon as practicable following the Closing Date, the Estimated CC Closing Share Consideration received by CC pursuant to
Section 3.3(a)(ii) of the Contribution Agreement and (ii) on or as soon as practicable following the release of the applicable OP Common Units from the Contingent Consideration Account to CC and the subsequent exchange of such OP
Common Units into shares of CFI Class A Common Stock, the Contingent Consideration Saltzman Shares (together with any cash, property or securities received by CC in respect of such OP Common Units pursuant to Section 3.5(h) of the
Contribution Agreement) in each case subject to all of the terms and conditions of this Agreement (as applicable, the “Saltzman Share Delivery”). 

(b) Adjustments. Promptly following the determination of the Final CC Closing Share Consideration on the Final Closing Statement in
accordance with Section 3.4(f) of the Contribution Agreement, if (i) the Final CC Closing Share Consideration as shown on the Final Closing Statement is greater than the Estimated CC Closing Share Consideration shown on the
Estimated Closing Statement, then CC shall deliver to Saltzman the number of additional shares of CFI Class A Common Stock equal to such excess amount, or (ii) the Estimated CC Closing Share Consideration as shown on the Estimated Closing
Statement is greater than the Final CC Closing Share Consideration shown on the Final Closing Statement, then Saltzman shall transfer to CC such number of shares of CFI Class A Common Stock equal to such excess. Saltzman or CC, as
applicable, shall satisfy such obligation within, in the case of Saltzman, three Business 

 
Days of demand by CC, or in the case of CC, three Business Days of receipt of such additional shares of CFI Class A Common Stock pursuant to Section 3.4(f) of the Contribution
Agreement. Any agreement or arrangement by CC in connection with Section 3.4 of the Contribution Agreement shall be binding on Saltzman without any right of objection or modification. 

(c) Certain Tax Matters. 

(i) Each Saltzman Share Delivery shall constitute the payment of a bonus to Saltzman and shall be characterized as a “guaranteed
payment” within the meaning of Section 707(c) of the Code. 
 (ii) The parties acknowledge and agree that no withholding Taxes
shall apply in respect of a Saltzman Share Delivery, and that the obligation to make the payment of any Taxes to the applicable Authorities that apply to such Saltzman Share Delivery shall be solely the obligation of Saltzman. 

(iii) Saltzman, at his election, may request that CC Holdings or CC (x) sell or withhold such number of Saltzman Shares that would
otherwise be delivered to Saltzman in respect of the applicable Saltzman Share Delivery as is determined mutually by the parties to be sufficient to realize an amount of cash on an after-tax basis equal to the estimated Taxes that apply to such
Saltzman Shares (the “Tax Sale”), (y) timely remit the cash received by CC in respect of the Tax Sale on Saltzman’s behalf to the applicable Authorities and (z) deliver to Saltzman only the net number of such Saltzman
Shares remaining after the Tax Sale. 
 2. TERMS AND CONDITIONS OF THE SALTZMAN SHARES. 

(a) Fully Vested. The Saltzman Shares shall be fully vested as of the date of the applicable Saltzman Share Delivery. 

(b) Rights as Shareholder. Except as otherwise set forth in this Agreement in respect of the “Transfer Restrictions” and the
“Liquidated Damages Payment” (each as defined below), Saltzman shall have all the rights of a shareholder with respect to the Saltzman Shares, including the right to vote the Saltzman Shares and to receive any dividends or other
distributions paid to or made with respect to the Saltzman Shares. 
 (c) Legend on Certificates. Any certificates evidencing the
“Restricted Saltzman Shares” (as defined below) shall bear such legends reflecting the Transfer Restrictions as CFI may determine in its sole discretion to be necessary or appropriate; provided that in no event shall any such legend be
included on any Saltzman Shares once such Saltzman Shares cease to be Restricted Saltzman Shares. 
 3. RESTRICTIONS ON TRANSFER OF THE SALTZMAN
SHARES. 
 (a) Temporary Transfer Restrictions. Except as otherwise expressly permitted by this Agreement, Saltzman shall not
offer, pledge, encumber, hypothecate, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly (each, a “Transfer”) any of the Saltzman Shares (the “Transfer Restrictions”). The Saltzman Shares 

  
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subject to the Transfer Restrictions shall be referred to herein as the “Restricted Saltzman Shares” and shall no longer be Restricted Saltzman Shares from and after the
applicable Restriction Lapse Date. 
 (b) Exceptions to Transfer Restrictions. Notwithstanding anything set forth in
Section 3(a) to the contrary: 
 (i) On each of the first five anniversaries of the Closing Date (each a “Restriction Lapse
Date”), the Transfer Restrictions relating to the number of Restricted Saltzman Shares delivered to Saltzman (after reduction for any Tax Sale) set forth below shall lapse, such that all of the Restricted Saltzman Shares shall be free of
any and all Transfer Restrictions and shall no longer be Restricted Saltzman Shares as of the fifth anniversary of the Closing Date: 
 (A)
on the first anniversary of the Closing Date, 20% of the remaining Restricted Saltzman Shares; 
 (B) on the second anniversary of the
Closing Date, 25% of the remaining Restricted Saltzman Shares; 
 (C) on the third anniversary of the Closing Date, 33 1/3% of the
remaining Restricted Saltzman Shares; 
 (D) on the fourth anniversary of the Closing Date, 50% of the remaining Restricted Saltzman
Shares; and 
 (E) on the fifth anniversary of the Closing Date, 100% of the remaining Restricted Saltzman Shares. 

In addition, the Transfer Restrictions shall be removed from all Restricted Saltzman Shares upon Saltzman’s death. No Transfer
Restrictions shall be applicable to any Restricted Saltzman Shares from and after the applicable Restriction Lapse Date. For purposes of computing the remaining Restricted Saltzman Shares as of any particular date, (x) Restricted Saltzman
Shares subject to Transfers described in clause (1) of Section 3(b)(ii) below shall be deemed to be remaining Restricted Saltzman Shares so long as record ownership remains with Saltzman, and (y) Restricted Saltzman Shares subject to
Transfers described in clause (3) and (7) of Section 3(b)(ii) shall be deemed to be remaining Restricted Saltzman Shares until such time (if any) they are the subject of a subsequent Transfer other than as described in clause
(3) and (7) of Section 3(b)(ii). 
 (ii) Saltzman and any vehicle through which Saltzman then indirectly holds Restricted
Saltzman Shares may effectuate any or all of the following Transfers of Restricted Saltzman Shares; provided, that, in the case of Transfers described in clauses (1) through (3), (A) the applicable transferee agrees in
writing to be bound by the restrictions set forth herein and (B) the Transfer Restrictions with respect to the applicable Restricted Saltzman Shares Transferred thereby shall continue to lapse on a ratable basis on each Restriction Lapse Date
as if still held by Saltzman; and provided, further, that no Restricted Saltzman Shares may be Transferred pursuant to clauses (1) through (3), or (6) through (8) of this Section 3(b)(ii) if following such Transfer,

  
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Saltzman would have beneficial ownership of a number of Saltzman Shares less than that number of Eligible Saltzman Shares that would be included in a Liquidated Damages Payment that became
payable as of the date of such Transfer: 
 (1) the Transfer of Restricted Saltzman Shares in an aggregate amount up to that number which
is equal to 50% of the total number of Saltzman Shares delivered to Saltzman as collateral for any loan; provided, that, such Transfer is a bona fide pledge of the Restricted Saltzman Shares to a Person that is not an Affiliate of the
transferor; 
 (2) the Transfer of Restricted Saltzman Shares in an aggregate amount up to that number which is equal to 20% of the total
number of Saltzman Shares issued to Saltzman as a bona fide gift or gifts; 
 (3) the Transfer of some or all of the Restricted
Saltzman Shares to any trust, partnership, corporation or limited liability company established and held for the direct or indirect benefit of Saltzman or his family, provided that any such Transfer shall not involve a disposition for value other
than equity interests in any such trust, partnership, corporation or limited liability company; 
 (4) the Transfer of some or all of the
Restricted Saltzman Shares to CFI to satisfy any indemnification obligations of Saltzman as contemplated by this Agreement or the Contribution Agreement; 

(5) the Transfer of some or all of the Restricted Saltzman Shares as required by applicable Law or order; 

(6) the Transfer of some of the Restricted Saltzman Shares to a nominee or custodian of a person or entity to whom a disposition or Transfer
would be permitted under this Agreement; 
 (7) the Transfer of some or all of the Restricted Saltzman Shares as provided for in
Section 4 below; and 
 (8) the Transfer of a number of Restricted Saltzman Shares as is reasonably determined by the parties in good
faith to be sufficient to realize an amount of cash on an after-tax basis equal to any and all taxes that apply to such Restricted Saltzman Shares. 

(c) Ownership of Restricted Saltzman Shares. Saltzman represents and warrants that, effective as of the Saltzman Share Delivery and
except for any Transfers permitted by Section 3(b)(ii), he will hold the Restricted Saltzman Shares, free and clear of all liens, encumbrances, and claims created or caused by him during the period that the Transfer Restrictions apply. Without
limiting the foregoing, effective as of the Saltzman Share Delivery and except for any Transfers permitted by Section 2(b)(ii), Saltzman shall maintain sole direct or indirect beneficial ownership of all Restricted Saltzman Shares, free and
clear of all liens, encumbrances, and claims created or caused by Saltzman or CC, at all times during the period that the Transfer Restrictions apply to such Restricted Saltzman Shares (it being understood that “beneficial ownership”
refers to ownership of all pecuniary and non-pecuniary rights, privileges, liabilities and obligations, and in particular shall not be limited to the meaning of “beneficial ownership” 

  
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for purposes of Section 13(d) of the Securities Exchange Act of 1934). Without limiting the foregoing, until the fifth anniversary of the Closing Date, Saltzman shall maintain sole direct or
indirect beneficial ownership, free and clear of all liens, encumbrances, and claims created or caused by Saltzman or CC, of a number of Saltzman Shares equal to or greater than that number of Eligible Saltzman Shares that would be included in a
Liquidated Damages Payment that became payable as of the date of determination. 
 4. LIQUIDATED DAMAGES. 

(a) If Saltzman (i) violates or fails to perform his obligations under the Non-Competition Covenant contained in Section 1(i) or
1(ii) of Exhibit A hereto, as modified by the proviso in Section 1 of Exhibit A, or (ii) otherwise violates or fails to perform his obligations under the Non-Competition Covenant in any manner that results in material economic harm to CFI
and its Affiliates (taken as a whole), in each case during the “Restricted Period” (as defined in Exhibit A hereto), and fails to cure and cease such violation within 60 days (which shall be extended to 90 days in the case of a violation
that is susceptible to cure and such cure is being pursued in good faith by Saltzman) after the date on which CFI gives written notice to him of such violation (a “Non-Competition Violation”, and the date of such notice of
violation, the “Date of the Non-Competition Violation”), then Saltzman shall promptly remit to CFI a number of Closing Saltzman Shares (the “Liquidated Damages Payment”), as liquidated damages in respect of such
violation and without respect to the damages actually incurred by CFI or its Affiliates as a result of such violation, determined as follows: 

(i) If the Date of the Non-Competition Violation occurs on or prior to the first anniversary of the Closing Date, the Eligible Saltzman
Shares; 
 (ii) If the Date of the Non-Competition Violation occurs after the first anniversary of the Closing Date but on or prior to the
second anniversary of the Closing Date, 80% of the Eligible Saltzman Shares (rounded to the nearest whole number); 
 (iii) If the Date of
the Non-Competition Violation occurs after the second anniversary of the Closing Date but on or prior to the third anniversary of the Closing Date, 60% of the Eligible Saltzman Shares (rounded to the nearest whole number); 

(iv) If the Date of the Non-Competition Violation occurs after the third anniversary of the Closing Date but on or prior to the fourth
anniversary of the Closing Date, 40% of the Eligible Saltzman Shares (rounded to the nearest whole number); 
 (v) If the Date of the
Non-Competition Violation occurs after the fourth anniversary of the Closing Date but on or prior to the fifth anniversary of the Closing Date, 20% of the Eligible Saltzman Shares (rounded to the nearest whole number); and 

(vi) If the Date of the Non-Competition Violation occurs after the fifth anniversary of the Closing Date, zero Eligible Saltzman Shares. 

For purposes of this Agreement, the term “Eligible Saltzman Shares” shall equal a number of shares of CFI Class A Common Stock
equal to (i) a fraction, the numerator of which is (A) the Saltzman Consideration and the denominator of which is (B) the sum of the CC 

  
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Consideration and the Saltzman Consideration, multiplied by (ii) $250,000,000 divided by (ii) the Reference CFI Stock Price. “CC Consideration” means (A) the number of
New Units received by CC under the Contribution Agreement plus (B) the difference between (x) the number of OP Common Units received by CC pursuant to Section 3.5(h) minus (y) the Contingent Consideration Saltzman Shares (as
defined in the Saltzman Share Transfer Agreement), in each case (A) and (B) multiplied by the Reference CFI Common Stock Price. “Saltzman Consideration” means the sum of (i) (A) the number of New Shares received by
Saltzman under the Saltzman Share Transfer Agreement plus (B) the number of Contingent Consideration Saltzman Shares received by Saltzman under the Saltzman Share Transfer Agreement plus (C) the number of New Shares retained or sold by CC
under the Saltzman Share Transfer Agreement or CFI under the Contribution Agreement, as applicable, in respect of payment of tax obligations of Saltzman plus (D) the number of New Units received by Saltzman under the Contribution Agreement, in
each of case (A), (B), (C) and (D), multiplied by the Reference CFI Common Stock Price plus (ii) any amounts (if any) actually distributed to Saltzman with respect to Class C Units in CCH. 

(b) Applicability. Once the Liquidated Damages Payments as provided for in Section 4(a) above have been paid in full, no further
Liquidated Damages Payment shall be payable pursuant to this Agreement. 
 (c) Sole Remedy. The Liquidated Damages Payment provided
for in Section 3(a) above, shall be CFI’s sole remedy (other than specific performance as provided for in the Restrictive Covenant Agreement by and between Saltzman and CFI, effective as of the Effective Date (the “Restrictive
Covenant Agreement”)) for breach of the Non-Competition Covenant and Section 3 of the Restrictive Covenant Agreement and the entire economic obligation of Saltzman for any such breach. 

5 INDEMNIFICATION OBLIGATIONS. In the event that CC is obligated for any Losses pursuant to Section 10 of the Contribution Agreement (or otherwise
thereunder), Saltzman shall be responsible for his pro rata percentage of any such Losses (and payments) by CC thereunder. Saltzman’s pro rata percentage shall be determined by dividing (i) the value of the Saltzman Shares delivered
to Saltzman by CC pursuant to Section 1 of this Agreement, which value shall be determined using the Reference CFI Common Stock Price by (ii) the Consideration. Saltzman shall satisfy any such obligations in shares of CFI Class A
Common Stock valued for such purposes at the Reference CFI Common Stock Price. Saltzman shall satisfy such obligation within three Business Days of demand and any agreement or arrangement by CC in connection with the Contribution Agreement
shall be binding on Saltzman without any right of objection or modification; provided, that if Saltzman fails to satisfy such obligation within such time period, the applicable number of Saltzman Shares delivered to Saltzman by CC pursuant to
Section 1 of this Agreement shall be automatically cancelled without further action by Saltzman, which value shall be determined using the Reference CFI Common Stock Price, and CC shall not be obligated for such Losses pursuant to
Section 10 of the Contribution Agreement. Saltzman shall have no right of participation (or objection) with respect to any indemnification matter under the Contribution Agreement and CC shall have the sole right to control any matter with
respect thereto. 

  
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 6. MISCELLANEOUS PROVISIONS. 

(a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable
to agreements entered into and to be performed entirely within such state. 
 (b) Entire Agreement. This Agreement, together with
Exhibit A hereto and the documents referred to herein, constitutes and expresses the whole agreement of the parties hereto with reference to any of the matters or things herein provided for or herein before discussed or mentioned with reference to
the terms and conditions of the Saltzman Shares, and it cancels and replaces any and all prior understandings, agreements and term sheets between the parties with respect thereto. All promises, representations, collateral agreements and
understandings not expressly incorporated in this Agreement are hereby superseded by this Agreement. 
 (c) Notices. All notices,
requests, demands and other communications required or permitted hereunder must be made in writing and will be deemed to have been duly given and effective: (a) on the date of delivery, if delivered personally; (b) on the earlier of the
fourth day after mailing or the date of the return receipt acknowledgment, if mailed, postage prepaid, by certified or registered mail, return receipt requested; (c) on the date of transmission, if sent by facsimile; or (d) on the date of
requested delivery if sent by a recognized overnight courier: 
  

			
	If to CFI:	  	Colony Financial, Inc.
		  	2450 Broadway, 6th Floor
		  	 Santa Monica, CA 90404
 Attention: General
Counsel

		
	If to CC:	  	Colony Capital, LLC
		  	2450 Broadway, 6th Floor
		  	 Santa Monica, CA 90404
 Attention: Director -
Legal

		
	If to Saltzman:	  	to the last address of the Executive in the records of CFI and CC specifically identified for notices under this Agreement

 or to such other address as is provided by a party to the others from time to time. 

(d) Survival. Except as otherwise expressly set forth in this Agreement, the representations, warranties and covenants of Saltzman
contained in this Agreement will survive any termination of Saltzman’s employment with CFI and its Affiliates through and until the expiration of the Restricted Period. 

(e) Amendment; Waiver; Termination. No provision of this Agreement may be amended, modified, waived or discharged unless such
amendment, modification, waiver or discharge is agreed to in writing and signed by all of the parties hereto. No waiver by any party hereto at any time of any breach by any other party hereto of compliance with any condition or provision of this
Agreement to be performed by any such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement and the transactions contemplated herein shall terminate
automatically without any further action by any party upon the termination of the Contribution Agreement. 

  
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 (f) Severability. If any term of provision hereof is determined to be invalid or
unenforceable in a final court or arbitration proceeding, (i) the remaining terms and provisions hereof shall be unimpaired and (ii) to the extent permitted by applicable Law, the invalid or unenforceable term or provision shall be deemed
replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision. 

(g) Arbitration. Except as otherwise set forth in the Restrictive Covenant Agreement, any dispute or controversy arising under or in
connection with this Agreement that cannot be mutually resolved by the parties hereto shall be settled exclusively by arbitration in New York, New York before a panel of three neutral arbitrators, each of whom shall be selected jointly by the
parties, or, if the parties cannot agree on the selection of the arbitrators, as selected by the American Arbitration Association. The commercial arbitration rules of the American Arbitration Association (the “AAA Rules”) shall govern any
arbitration between the parties, except that the following provisions are included in the parties’ agreement to arbitrate and override any contrary provisions in the AAA Rules: 

(i) The agreement to arbitrate and the rights of the parties hereunder shall be governed by and construed in accordance with
the laws of the State of California, without regard to conflict or choice of law rules; 
 (ii) The California Arbitration
Act shall govern the arbitration, the agreement to arbitrate, and any proceedings to enforce, confirm, modify or vacate the award; 

(iii) The arbitrators shall apply California law; 

(iv) Any petition or motion to modify or vacate the award shall be filed in a Superior Court in California (the
“Court”); 
 (v) The award shall be written, reasoned, and shall include findings of fact as to all factual
issues and conclusions of law as to all legal issues; 
 (vi) Either party may seek a de novo review by the Court of the
conclusions of law included in the award and any petition or motion to enforce, confirm, modify or vacate the award; and 

(vii) The arbitration shall be confidential. Judgment may be entered on the arbitrators’ award in any court having
jurisdiction. 
 The parties hereby agree that the arbitrators shall be empowered to enter an equitable decree mandating specific
enforcement of the terms of this Agreement. Each party shall bear its own legal fees and out-of-pocket expenses incurred in any arbitration hereunder and the parties shall share equally all expenses of the arbitrators. 

(h) Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement. 

  
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 (i) Construction. The parties acknowledge that this Agreement is the result of
arm’s-length negotiations between sophisticated parties, each afforded representation by legal counsel. Each and every provision of this Agreement shall be construed as though both parties participated equally in the drafting of the same, and
any rule of construction that a document shall be construed against the drafting party shall not be applicable to this Agreement. 
 (j)
Counterparts. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same document. 

(k) Taxes. Notwithstanding any other provision of this Agreement, CFI, CC Holdings and CC shall not be obligated to guarantee any
particular Tax result for Saltzman with respect to any payment provided to Saltzman hereunder, and Saltzman shall be responsible for any Taxes imposed on him with respect to any such payment. 

(l) Section 409A. The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of
the Code (including the provisions of Treasury Regulation Section 1.409A-3(i)(5)(iv)), to the extent subject thereto, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance
therewith. In the event that any provision of Agreement is mutually agreed by the parties to be in violation of Section 409A of the Code, the parties shall cooperate reasonably to attempt to amend or modify this Agreement in order to avoid a
violation of Section 409A of the Code while attempting to preserve the economic intent of the applicable provision. Neither CFI, CC Holdings or CC make any representation that any or all of the payments described in this Agreement will be
exempt from or comply with Section 409A of the Code and make no undertaking to preclude Section 409A of the Code from applying to any such payment. For purposes of this Section 6(l), Section 409A of the Code shall include all
regulations and guidance promulgated thereunder. 
 [remainder of page intentionally left blank] 

  
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 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written. 
  

			
	COLONY FINANCIAL, INC.
		
	By:	 	 /s/ John L. Steffins

	Name:	 	John L. Steffins
	Title:	 	Chairman of the Special Committee
	
	COLONY CAPITAL HOLDINGS, LLC
		
	By:	 	 /s/ Mark M. Hedstrom

	Name:	 	Mark M. Hedstrom
	Title:	 	Vice President
	
	COLONY CAPITAL, LLC
		
	By:	 	 /s/ Mark M. Hedstrom

	Name:	 	Mark M. Hedstrom
	Title:	 	Vice President
	
	RICHARD B. SALTZMAN
		
	By:	 	 /s/ Richard B. Saltzman

		 	Richard B. Saltzman

 [Signature Page to Share Transfer and Liquidated Damages Agreement] 

 Exhibit A 

Non-Competition Covenant 

WHEREAS, Saltzman (i) is a substantial beneficial holder of equity interests in CC and its Affiliates, (ii) has been actively
involved in the management of the business of CC and has thereby acquired significant experience, skill, and confidential and proprietary information relating to the business and operation of CC and (iii) in the course of his participation in
the business of CC, has also developed on behalf of CC significant goodwill that is now a significant part of the value of CC; 

WHEREAS, CFI, on behalf of itself and its Subsidiaries (which, for the avoidance of doubt, on and after the Effective Date include
NewCo and its Subsidiaries) (collectively, the “Company”) desires to protect its investment in the assets, businesses and goodwill of CC to be acquired as part of the Contribution and, accordingly, as a material condition to its
willingness to enter into the Contribution Agreement and consummate the Contribution, has required that Saltzman agree to limit certain activities by Saltzman (as contemplated hereby) that would compete with or otherwise harm such assets, businesses
or goodwill; 
 WHEREAS, as part of the consideration and inducement to CFI to enter into the Contribution Agreement and acquire such
assets, businesses and goodwill, Saltzman is willing to agree to enter into this Non-Competition Covenant and abide by such restrictions; and 

WHEREAS, the parties intend this Non-Competition Covenant to be in compliance with California Business and Professions Code
Section 16601 (“BPC Section 16601”) to the extent that it is applicable, and further intend for it to be fully enforceable under any applicable Law. 

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants, terms and conditions set forth herein, and other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to the Non-Competition Covenant hereby agree as follows: 

1. Non-Competition. Saltzman shall not, during the Restricted Period, directly or indirectly, in any manner within the Restricted Territory:
(i) engage in the Business (other than through CFI and its Affiliates); (ii) render any services as an employee, officer, director or consultant to any Person (other than CFI and its Subsidiaries) engaged in the Business; or
(iii) make an investment in a Person engaged in the Business as a partner, shareholder, principal, member or other owner of equity interests (or securities convertible into or exercisable for, equity interests); provided, however, nothing
contained in this Agreement shall restrict Saltzman from (x) engaging in any activity that he determines in good faith is in furtherance of the interests of CFI and its Subsidiaries in the performance of his duties for, and for the benefit of,
CFI and its Subsidiaries and/or (y) engaging in any Permitted Activity in accordance with Section 2. 
 2. Permitted Activities.
Notwithstanding anything set forth herein to the contrary, nothing contained herein shall prohibit Saltzman from: 
 (a) engaging in the
Personal Activities (as defined in the Employment Agreement); 

 (b) owning, directly or indirectly, solely as an investment, securities of any such Person which
are traded on any national securities exchange or NASDAQ if Saltzman (A) is not a controlling person of, or a member of a group which controls, such Person; and (B) does not, directly or indirectly, own five percent (5%) or more of
any class of securities of such Person; 
 (c) managing any capital accounts, or exercising any of the rights and obligations of the general
partner, of the upper-tier general partners with respect to the Subject Funds, or any CC Retained Assets or CC Retained Liabilities of CC Parties following the Effective Date; 

(d) taking any actions with respect to (x) investments made (or legally committed to be made) on or prior to the date hereof (including
investments in Colony AH Member LLC and its subsidiaries, SONIFI Solutions, Inc. and Miramax Films) or (y) follow-on investments to the investments described in clause (x) that are not real estate-related or the sourcing of investments for
the investments described in clause (x) that are not real estate-related or (z) investments made to refinance or restructure the investments described in clauses (x) and (y) that are not real estate-related; 

(e) making passive investments in private equity funds, mutual funds, hedge funds and other managed accounts (provided that such funds or
accounts do not have a primary investment strategy, as set forth in the applicable fund’s or account’s published statement of its primary investment strategy, of investments in real estate-related debt and equity investments); 

(f) making any passive investment (or group of related passive investments) of less than $20 million in private equity funds, mutual funds,
hedge funds and other managed accounts that have a primary investment strategy, as set forth in the applicable fund’s or account’s published statement of its primary investment strategy, of investments in real estate-related debt and
equity investments; 
 (g) making investments in private companies that are (x) not engaged in the real estate or hospitality
industries, (y) do not predominantly make investments in real estate-related debt and equity instruments and (z) do not make investments similar to those made by CFI and the OP equal to the lesser of (x) 5% of the outstanding equity
securities of such private company and (y) $30 million per company or group of affiliated companies operating as part of one business; or 

(h) providing services to an entity engaged in the Business if Saltzman’s services are limited to a unit, division, or subsidiary of such
entity which does not engage in the Business and Saltzman does not provide services directly or indirectly to, or with respect to, the Business. 
 3.
Defined Terms. For purposes of this Exhibit A, the following terms have the respective meanings set forth below: 
 (a)
“Business” means (x) the business of acquiring, originating and managing real estate-related debt and equity investments; provided, that, for purposes of clarification, the Business shall not include debt or equity investments
in operating companies primarily engaged in businesses outside of the real estate or hospitality industries even though such businesses may own or lease real property and (y) any alternative asset management business (other than CC) in

 
which more than 25% of the total capital committed is third party capital from passive investors (which term shall exclude natural persons who are partners or employees of the business and are
actively engaged in the management of the business) that advises, manages or invests the assets of funds or related investment vehicles or separate accounts. 

(b) “Employment Agreement” means the Employment Agreement by and between Saltzman and CFI, dated as of December 23,
2014. 
 (c) “Person” means any individual, company, limited liability company, limited or general partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. 

(d) “Restricted Period” means the period commencing on the Effective Date and ending on the first anniversary of the
termination of Saltzman’s employment with the Company; provided that the Restricted Period shall immediately cease if such termination of employment is either by the Company without Cause (including due to Non-Renewal by the Company) or by
Saltzman for Good Reason (in each case, such capitalized term used herein as defined in the Employment Agreement). 
 (e)
“Restricted Territory” means (i) any of Austria, Belgium, China, Czech Republic, Denmark, England, Finland, France, Germany, Hungary, Ireland, Italy, Japan, Monaco, Netherlands, Norway, Poland, Portugal, Scotland, South Korea,
Spain, Sweden, Switzerland, the United States, (ii) any state in the United States and/or other country listed in clause (i), and (iii) any other jurisdiction in which the Company or its subsidiaries engages in Business in any material
respect. 
 4. Reasonableness and Enforceability of Covenants. 

(a) The recitals to this Non-Competition Covenant are incorporated herein by this reference. The parties hereto acknowledge and agree with
such recitals, and further agree that the value of the consideration paid by CFI in connection with the Contribution is substantial and that preservation of the confidential and proprietary information, goodwill, stable workforce, and client and
customer relations of the Company is a material part of the consideration being provided in connection with the Contribution. 
 (b) The
parties expressly agree that the character, duration and geographical scope of this Non-Competition Covenant are reasonable in light of the circumstances as they exist on the date upon which this Agreement has been executed, including, but not
limited to, Saltzman’s material economic interest in the Contribution, Saltzman’s importance within the business to be contributed in the Contribution, and Saltzman’s position of confidence and trust as a stockholder of CFI. 

(c) Saltzman acknowledges that, (i) in connection with the Contribution, the Company will be vested with the goodwill of, and will
directly or indirectly carry on, the business of CC; (ii) the restrictive covenants and the other agreements referenced herein (collectively, the “Restrictive Covenants”) are an essential part of this Non-Competition

 
Covenant and the Agreement, and the contemplated Contribution; (iii) the contemplated Contribution is designed and intended to qualify as a sale (or other disposition) by Saltzman within the
meaning of BPC Section 16601 and (iv) the covenants contained in this Non-Competition Covenant and the Agreement are intended to be and would be enforceable under BPC Section 16601. Saltzman and the Company agree not to challenge the
enforceability of the covenants (and the limitations and qualifications included as part thereof) contained in this Non-Competition Covenant and the Agreement. 

(d) Saltzman agrees to be bound by the Restrictive Covenants and the other agreements referenced in the Agreement to the maximum extent
permitted by Law, it being the intent and spirit of the parties that the Restrictive Covenants and the other agreements referenced herein shall be valid and enforceable in all respects, and, subject to the terms and conditions of, and limitations
and qualifications included in, this Non-Competition Covenant and the Agreement. 
 5. Acknowledgements. Saltzman acknowledges that
(i) his work for the Company will continue to give him access to the confidential affairs and proprietary information of the Company; (ii) the agreements and covenants of Saltzman contained in this Non-Competition Agreement are essential
to the business and goodwill of the Company; and (iii) CFI would not have entered into the Contribution Agreement or the Employment Agreement but for the covenants and agreements set forth herein. 

[End of Exhibit A]8-K Exhibit 101 Notional Units

		
			Exhibit 10.1
		

			
					
						

					
					
						 

				

		
			 
		

		
			                                       
		

		
			Sanchez Production Partners LLC
2009 Omnibus Incentive Compensation Plan 

Award Agreement Relating to 
Notional Units with DERs - Executives
		

		
			Grantee: [●]  
		

		
			Grant Date:  December 18, 2014
		

		
			Grant of Notional Units.
		

		
			Grant.  Sanchez Production Partners LLC, a Delaware limited liability company (f/k/a Constellation Energy Partners LLC) (including its successors and assigns, the “Company”), hereby grants to you [●] Notional Units (each, a “Notional Unit”) under the Constellation Energy Partners LLC 2009 Omnibus Incentive Compensation Plan (the “Plan”) on the terms and conditions set forth herein and in the Plan, which is incorporated herein by reference as a part of this agreement (collectively, the “Award Agreement”).  The Plan is proposed to be amended and restated and renamed the Sanchez Production Partners LP Long-Term Incentive Plan (the “Amended Plan”) effective as of such time that (collectively, the “Conversion Conditions”) (i) the Amended Plan is approved by the unitholders of the Company and (ii) the conversion of the Company from a limited liability company into a limited partnership (the “Company Conversion”) becomes effective.
		

		
			General.  Except where explicitly noted herein, in the event of any conflict between the terms of this Award Agreement and the Plan, the Plan shall control.  Capitalized terms used in this Award Agreement but not defined herein shall have the meanings ascribed to such terms in the Plan, unless the context requires otherwise.
		

		
			Conversion to Restricted Units.
		

		
			Conversion Upon Satisfaction of Conversion Conditions.  Subject to Article 3, upon satisfaction of both Conversion Conditions, each outstanding Notional Unit and related DER shall be automatically converted into one restricted common unit (“Restricted Unit”) and a tandem DER.  All Notional Units and related DERs granted hereby shall immediately become null, void and without further effect upon such conversion; provided,  however, that any amounts credited to any bookkeeping account with respect to such DERs shall remain outstanding.  
		

		 

 

		Subject to Section 3.1, the Company shall promptly cause the issuance of such Restricted Units upon satisfaction of both Conversion Conditions.
		

		
			Vesting of Restricted Units.  Except as otherwise provided in Article 3, each tranche of Restricted Units identified below (a “Tranche”) shall fully vest in Grantee and the restrictions set forth in this in this Award Agreement shall lapse according to the following schedule of vesting dates:
		

			
					
						    Tranche

					
					
						Percent Vesting

					
					
						Vesting Date

				
	
					
						First

					
					
						33.3%

					
					
						December 15, 2015

				
	
					
						Second

					
					
						33.3%

					
					
						December 15, 2016

				
	
					
						Third

					
					
						33.4%

					
					
						December 15, 2017

				

			
					
						 

					
					
						 

				

		
			Forfeiture; Acceleration.
		

		
			Forfeiture.  Subject to Section 3.2, all Notional Units that have not then converted pursuant to Section 2.1, all unvested Restricted Units and all DERs (and all amounts credited to any bookkeeping account with respect to such DERs) shall become forfeited, null and void on the date on which Grantee is no longer employed by any Employer.    
		

		
			Acceleration.  Notwithstanding Section 3.1, in the event of (i) Grantee’s  Disability prior to termination of his employment, (ii) Grantee’s death prior to termination of his employment or (iii) an Involuntary Termination, then all outstanding Notional Units that have not then converted pursuant to Section 2.1, all outstanding unvested Restricted Units and all  outstanding DERs shall become immediately fully vested and earned.  Upon the date that such Disability, death or Involuntary Termination occurs, (y) if the Conversion Conditions have occurred, all outstanding Restricted Units shall fully vest and the outstanding DERs shall become earned and payable in accordance with Section 4.3 and (z) if the Conversion Conditions have not occurred, all outstanding Notional Units and related DERs shall be settled in cash in the manner set forth in Section 5.2.
		

		
			Committee Discretion.  The Committee may, in its discretion, waive in whole or in part any forfeiture pursuant to this Article 3.
		

		
			Distribution Equivalent Rights.    
		

		
			Grant.  Each Notional Unit and Restricted Unit shall be accompanied by a tandem DER.
		

		
			Accumulation.  Until the earliest of (i) the Notional Units being settled pursuant to Section 3.2 or Section 5.1, (ii) a Tranche of Restricted Units vesting pursuant to Section 2.2, or (iii) the vesting of the Restricted Units accelerating pursuant to Section 3.2, the Company shall, upon payment of a cash distribution in respect of Units, credit to a bookkeeping account, with respect to DERs, an amount equal to the number of Notional Units or Restricted Units, as applicable, outstanding multiplied by the per-Unit distribution amount so paid; provided,  however, that no amounts credited to any bookkeeping account with respect to a DER related to a converted Notional Unit shall result in any duplication of benefits with respect to a DER related to a Restricted Unit.
		

		 

 

		
			Earning and Settlement.  The DERs accumulated with respect to Notional Units or to Restricted Units shall be vested and earned as of the earlier of (i) as applicable, (a) the related Tranche of Restricted Units vesting in accordance with Section 2.2 or (b) the applicable vesting date of Notional Units in accordance with Section 5.1, or (ii) the accelerated vesting of the Notional Units or Restricted Units in accordance with Section 3.2.  Except as provided in Section 5.2 and subject to the tax withholding requirements of Article 6, upon vesting of (a) the related Tranche of Restricted Units vesting in accordance with Section 2.2 or (b) the applicable vesting date of Notional Units in accordance with Section 5.1, or the accelerated vesting of the Notional Units or Restricted Units in accordance with Section 3.2, any DERs related thereto shall be settled in cash within five (5) business days of such vesting date.    
		

		
			Cash Settlement of Notional Units and Related DERs Prior to Conversion.    
		

		
			Vesting of Notional Units.  Notwithstanding anything to the contrary in this Award Agreement or the Plan, 
		

		
			if, as of December 15, 2015, either (i) the Amended Plan is not approved by the unitholders of the Company or (ii) both Conversion Conditions have not been satisfied (the occurrence of either (i) or (ii) as of December 15, 2015, an “Approval Failure”), Grantee (A) shall have no right pursuant to this Award Agreement or otherwise to receive 33.3% of the Notional Units and related DERs in respect of the Notional Units and (B) shall be entitled to settlement of such Notional Units and related DERs only pursuant to Section 5.2; and
		

		
			if, as of December 15, 2016, an Approval Failure continues to exist, Grantee (A) shall have no right pursuant to this Award Agreement or otherwise to receive 33.3% of the Notional Units and related DERs in respect of the Notional Units and (B) shall be entitled to settlement of such Notional Units and related DERs only pursuant to Section 5.2; and
		

		
			if, as of December 15, 2017, an Approval Failure continues to exist, Grantee (A) shall have no right pursuant to this Award Agreement or otherwise to receive 33.4% of the Notional Units and related DERs in respect of the Notional Units and (B) shall be entitled to settlement of such Notional Units and related DERs only pursuant to Section 5.2.
		

		
			No Approval Failure shall affect the validity of this Award Agreement and shall have no effect on this Award Agreement other than as explicitly provided for in this Section 5.1(a).    
		

		
			Manner of Settlement.  Subject to the tax withholding requirements of Article 6, the Notional Units and any DERs that have accumulated pursuant to Section 4.2 shall be paid to Grantee (i) if earned pursuant to Section 3.2, in full within five (5) business days after the later of (y) December 15, 2015 and (z) the date of Grantee’s death, Disability or Involuntary Termination  and (ii) if otherwise earned pursuant to Section 5.1, within five (5) business days after the applicable December 15th specified therein; provided,  however, that, notwithstanding the foregoing, if an event specified in Section 3.2 occurs on or before December 31, 2014, all of the Notional Units and related DERs in respect of the Notional Units shall be settled on March 15, 2015.  The aggregate amount so paid shall be equal to (A) the number of Notional Units to be so 
		

		 

 

		settled multiplied by the Fair Market Value on the date of Grantee’s death, Disability or Involuntary Termination (if earned pursuant to Section 3.2), or December 15, 2015, December 15, 2016 or December 15, 2017, as applicable, plus (B) an amount as determined pursuant to Section 4.2 that has accumulated with respect to the DERs related to such Notional Units.
		

		
			Withholding of Tax.
		

		
			General.  The Company or any Affiliate thereof is authorized to withhold from any payment due or transfer made pursuant to this Award Agreement or from any compensation or other amount owing to Grantee the amount (in cash, Units, other securities, Units that would otherwise be issued pursuant to this Award Agreement or other property) of any applicable taxes payable at the minimum statutory rate in respect of this Award Agreement, the vesting or any payment or transfer under the Award Agreement and to take such other action as may be necessary in the opinion of the Company to satisfy its withholding obligations for the payment of such taxes, and in this regard, such withholding obligation may be satisfied by Grantee timely remitting (in cash, check or wire transfer) to the Company or the Internal Revenue Service, at the Company’s election, the amount of any such applicable taxes (as determined by the Company).  
		

		
			Net Units.  Unless Grantee satisfies the tax withholding obligation set forth above by timely remitting such amounts to the Company or the Internal Revenue Service (at the Company’s election) by cash, check or wire transfer, all Units to be issued pursuant to this Award Agreement shall be net of tax withholding, such that the tax withholding obligation of Grantee in respect of this Award Agreement and such Units is satisfied through the retention by the Company of a number of Units equal to Grantee’s aggregate tax withholding obligation divided by the per-Unit Fair Market Value for the date immediately prior to the date of such issuance of Units.
		

		
			Section 83(b) Election.  Grantee agrees that, if he makes an election under Section 83(b) of the Code with regard to the transfer of the Restricted Units, Grantee will so notify the Company in writing within two (2) days after make such election.  None of the Company or its Affiliates shall file such an election for or on behalf of Grantee.
		

		
			Ownership Rights.  Subject to the vesting restrictions provided in Section 2.2 and the risk of forfeiture pursuant to Article 3, Grantee shall have full ownership rights in respect of the Restricted Units, including the right to vote along with the other common unitholders; provided,  however, that other than in respect of Article 4, the Restricted Units shall not have the right, prior to vesting pursuant to Section 2.2 or Section 3.2, to receive distributions when paid by the Company on the Units.  
		

		
			Limitations on Transfer.  All rights under this Award Agreement shall belong to Grantee alone and may not be transferred, assigned, pledged or hypothecated by Grantee in any way (whether by operation of law or otherwise), other than by will or the laws of descent and distribution and shall not be subject to execution, attachment or similar process.  Upon any attempt by Grantee to transfer, assign, pledge, hypothecate or otherwise dispose of such rights contrary to the provisions in this Award Agreement or the Plan, or upon the levy of any attachment or similar process upon such rights, such rights shall immediately become null and void.
		

		
			Binding Effect.  This Award Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and upon any person lawfully claiming under Grantee. 
		

		

		

		 

 

		Rights of Grantee.  Any benefits payable under this Award Agreement shall be provided from the general assets of the Company.  Grantee’s rights arising under this Award Agreement shall not rise above those of a general creditor of the Company.
		

		
			Entire Agreement and Amendment.  
		

		
			This Award Agreement (including Annex A attached hereto) constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all of the covenants, promises, representations, warranties and agreements between the parties with respect to the Notional Units granted hereby.  Without limiting the scope of the preceding sentence, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby made null and void and of no further force and effect.
		

		
			To the extent of any inconsistency between the terms of this Award Agreement and any employment agreement between an Employer and Grantee, whether heretofore entered into (including Grantee’s Amended and Restated Employment Agreement, dated as of April 5, 2012, with CEP Services Company, Inc., a wholly-owned subsidiary of the Company) or hereafter entered into, the terms of this Award Agreement shall govern and control.
		

		
			Notices.  Any notices given in connection with this Award Agreement shall, if issued to Grantee, be delivered to Grantee’s current address on file with the Company, or if issued to the Company, be delivered to the Company’s principal offices.  
		

		
			Execution of Receipts and Releases.  Payment of cash or issuance or transfer of Units or other property to Grantee, or to Grantee’s legal representatives, heirs, legatees or distributees, in accordance with the provisions hereof, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder.  The Company may require Grantee or Grantee’s legal representatives, heirs, legatees or distributees, as a condition precedent to such payment or issuance, to execute a release and receipt therefor in such form as it shall reasonably determine.
		

		
			Reorganization of the Company.  The existence of this Award Agreement shall not affect in any way the right or power of the Company and its Affiliates or their respective  unitholders, stockholders or other equity holders to make or authorize (a) any or all adjustments, recapitalizations, reorganizations or other changes in the respective capital structures or businesses of any of the Company and its Affiliates; (b) any merger or consolidation of any of the Company and its Affiliates; (c) the conversion of the Company from a limited liability company to a limited partnership; (d) any issue of bonds, debentures, preferred or prior preference units or securities ahead of or affecting the Notional Units, Restricted Units or DERs or the rights thereof; (e) the dissolution or liquidation of any of the Company and its Affiliates, or any sale or transfer of all or any part of their assets or business; or (f) or any other company act or proceeding, whether of a similar character or otherwise.
		

		
			Recapitalization Events.  In the event that the Committee determines that any distribution (whether in the form of cash, common units, other securities or other property), recapitalization, split, reverse split, reorganization, conversion, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of common units or other securities of the Company, issuance of warrants or other rights to purchase common units or other securities of the Company, or other similar transaction or event affects the common units such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under this Award Agreement, then the Committee shall, in such manner as it may deem equitable, adjust the number and type of common units (or other securities or property) subject to the Award Agreement hereunder or, if deemed appropriate by the Committee, make provision for a cash payment to Grantee; provided,  however, that the number of common units subject to the Award Agreement shall always be a whole number. 
		

		

		

		 

 

		Certain Restrictions.  By executing this Award Agreement, Grantee acknowledges that he has received a copy of the Plan and agrees that Grantee will enter into such written representations, warranties and agreements and execute such documents as the Company may reasonably request in order to comply with the securities laws or any other applicable laws, rules or regulations or with this document or the terms of the Plan.
		

		
			No Guarantee of Tax Consequences.  None of the Board, the Committee or the Company (a) makes any commitment or guarantee that any federal, state, local or other tax treatment will (or will not) apply or be available to any person participating or eligible to participate hereunder or to any person claiming through or on behalf of any such person or (b) assumes any liability or responsibility whatsoever for the tax consequences to Grantee or any person claiming through or on behalf of such individual.  This Award Agreement is intended to either comply with or be exempt from the Section 409A of the Code, and ambiguous provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent.
		

		
			Amendment and Termination.  No amendment or termination of this Award Agreement that adversely affects the rights of the Grantee shall be made by the Company at any time without the prior written consent of Grantee.
		

		
			Governing Law.  This Award Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of laws principles thereof. 
		

		
			No Guarantee of Employment.  This Award Agreement does not guarantee Grantee any term of employment with any Employer. 
		

		
			 
		

		
			[Signature page follows]
		

		

		

		 

 

		IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement to be effective as of  December ___, 2014.
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Sanchez Production Partners LLC

					
					
						 

					
					
						Grantee

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						 

					
					
						 

					
					
						By:

					
					
						 

				
	
					
						Name:

					
					
						 

					
					
						 

					
					
						Name:

					
					
						 

				
	
					
						Title:

					
					
						 

					
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			 
		

		
			 
		

		

		

		 

 

		Annex A
		

		
			Definitions
		

		
			As used in this Award Agreement, the following capitalized terms have the meanings set forth below:
		

		
			“Board” means the board of managers, board of directors or managing member, as applicable, of the Employer.
		

		
			“Cause” means Grantee: 
		

		
			has engaged in gross negligence, gross incompetence or willful misconduct in the performance of his duties; 
		

		
			has failed to substantially perform the duties and services reasonably required by the Employer; provided, that such failure continues for at least 30 days after Grantee’s receipt of written notice of such failure from the Employer;
		

		
			has willfully engaged in conduct that is materially injurious to the Employer or its subsidiaries (monetarily or otherwise);
		

		
			has committed an act of fraud, embezzlement or willful breach of a fiduciary duty to the Employer (including the unauthorized disclosure of confidential or proprietary material information of the Employer); or 
		

		
			has been convicted of, pled guilty to, or pleaded no contest to, a crime involving fraud, dishonesty or moral turpitude.    
		

		
			“Disability” means (i) the inability of Grantee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months or (ii) the receipt of income replacements by Grantee, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, for a period of not less than three (3) months under the applicable Employer’s accident and health plan.
		

		
			“Employer” means any of the Company, CEP Services Company, Inc., Sanchez Production Partners LP, Sanchez Production Partners GP LLC and any subsidiary or Affiliate of any of the foregoing.
		

		
			“Event of Good Reason” means the occurrence of any one or more of the following:
		

		
			a material reduction in the nature or scope of Grantee’s authority or duties from those previously applicable to him as of the date of this Award Agreement; provided,  however, that, if Grantee holds more than one office, the removal from any offices other than the most senior shall not constitute an Event of Good Reason;
		

		
			a material reduction in Grantee’s base compensation in effect as of the date of this Award Agreement, except with Grantee’s prior written consent;
		

		
			a change in the location of Grantee’s principal place of employment by the Employer by more than 60 miles from the location where he was principally employed as of the date of this Award Agreement; provided,  however, that such change in the location of Grantee’s principal place of employment shall not constitute an Event of Good Reason if Grantee consents to such decision to relocate prior to such change in location; or
		

		 

 

		
			any action or inaction by the Employer that constitutes a material breach of this Award Agreement.
		

		
			Grantee cannot terminate his employment for an Event of Good Reason unless he has provided written notice to the applicable Employer of the existence of the circumstances providing grounds for termination for an Event of Good Reason within 30 days of the initial existence of such grounds and the Employer has had at least 30 days from the date on which such notice is provided to cure such circumstances (such period during which the Employer may cure, the “Cure Period”) and does not cure such grounds.  If Grantee does not terminate his employment for an Event of Good Reason within 30 days after the end of the Cure Period, then Grantee will be deemed to have waived his right to terminate for an Event of Good Reason with respect to such grounds.
		

		
			“Involuntary Termination” means any termination of Grantee’s employment with the Employer that results from:
		

		
			(i)a termination of Grantee’s employment by the Employer without Cause at a time when Grantee is otherwise willing and able to continue providing services; or
		

		
			(ii)a resignation by Grantee as a result of an Event of Good Reason.
		

		
			The term “Involuntary Termination” shall not include a termination for Cause or any termination as a result of Grantee’s death or Disability.  An “Involuntary Termination” is intended to constitute an “involuntary separation from service” pursuant to Treasury Regulation 1.409A-1(n).

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