Document:

Exhibit
10.31

 

CAPMARK FINANCIAL GROUP
INC.

DISCRETIONARY
BONUS PLAN

 

CAPMARK FINANCIAL
GROUP INC. (the “Company”) hereby establishes this DISCRETIONARY BONUS PLAN
(the “Bonus Plan”) in accordance with the terms provided herein.

 

Section 1.  Discretionary
Bonus Pool Purpose.  The Company’s
main purposes in providing the discretionary pool described within the Bonus
Plan (the “Discretionary Bonus Pool”) include: (i) linking employee
compensation to the Company’s annual and long-term goals and general success, (ii) aligning
individual and Business Unit performance with the Company’s business plans,
strategic initiatives and corporate policies (including but not limited to compliance
with the Company’s ethics policies and applicable laws), (iii) promoting cooperation
among and between the Company’s Business Units and (iv) providing an
incentive compensation program that is competitive with market practices and
opportunities with respect to the Company’s employees.

 

Section 2.  Effective
Date.  This Bonus Plan shall first be
effective for the Bonus Plan Year ending December 31, 2007.  The Bonus Plan will remain in effect from
year to year (each calendar year shall be referred to herein as a “Bonus Plan
Year”) until formally amended or terminated in accordance with Section 10.

 

Section 3.  Eligibility.  Each individual employed by the Company or
one of its subsidiaries (collectively, “Capmark”) on a full-time basis as of September 1
of the Bonus Plan Year, who is a Capmark employee in good standing as of December 31
of that Bonus Plan Year and is employed by Capmark at the time that
Discretionary Bonus Pool payments are made shall be eligible to participate in
the Bonus Plan.  In addition, the Company’s
Executive Vice President & Chief Administrative Officer (the “CAO”)
may qualify any other employee of Capmark to be eligible for participation in
the Bonus Plan.  Such qualified
eligibility, if any, shall be set forth in writing by the CAO.  Notwithstanding anything to the contrary, the
CEO and/or the CAO may in their sole discretion require any or all participants
in the Bonus Plan to enter into a written agreement as a condition to receiving
a Discretionary Bonus Pool payment, which agreement may include, inter alia, certain performance obligations, a deferred
payment or vesting schedule, reimbursement or so-called “claw-back” provisions
in favor of Capmark and such other terms and conditions as determined by the
CEO and/or the CAO in their sole discretion.

 

Section 4.  Administration,
Recommendations and Determinations.  Under
the direction of the Company’s Chief Executive Officer (the “CEO”), the CAO shall
administer the Discretionary Bonus Pool in accordance with guidance provided by
the Executive Development and Compensation Committee of the Board of Directors
(the “Committee”), including the process outlined in this Section 4 and Section 6
below and the calculations described in Section 5.  The Committee shall at all times retain the authority
and discretion to reduce, increase, or eliminate the Discretionary Bonus Pool, and/or
substitute any form of payment or award (e.g., common stock, restricted stock
units, or other securities) pursuant to the Bonus Plan without regard to any
particular factors specified herein.  The
CAO shall interpret the Bonus Plan and make all determinations required to be
made hereunder in his/her discretion; all such determinations shall be final,
binding and conclusive, subject to any determination by the Committee.  In the event of a conflict between a CAO
determination and a Committee determination, the latter shall be controlling.

 

(a)           As soon as
practicable in the beginning of each Bonus Plan Year, the Committee shall
review and approve (i) the Bonus Plan, (ii) the methodology for calculating
the aggregate dollar value of the Discretionary Bonus Pool, and (iii) the
projected aggregate 

 

 

payout under the Bonus Plan.  At
such time, the Committee shall establish for the Bonus Plan Year preliminary
targets for both the percentage of the projected Net Income (defined below) to
be used in calculating the Discretionary Bonus Pool (the “Committee-Approved
Percentage”) and the dollar value of the Discretionary Bonus Pool.

 

(b)           As soon as
practicable after the end of each Bonus Plan Year, the CEO and the CAO shall
present to the Committee their recommendations with respect to the applicable
Discretionary Bonus Pool, including their calculations and rationale for such
recommendations.  Taking into account the
joint recommendation of the CEO and the CAO, the Committee shall determine in
its sole discretion the final Committee-Approved Percentage and the actual
dollar value of the Discretionary Bonus Pool for such Bonus Plan Year.

 

Section 5.  Calculations
and Definitions.  The Discretionary
Bonus Pool shall equal (1) the product of (i) the Committee-Approved
Percentage multiplied by (ii) the sum of 
(A) Adjusted Pre-Tax Net Income plus (B) Total Compensation
Expense, minus (2) Fixed Compensation. 
Capitalized terms used in this Section 5 not previously defined
herein are defined below.  In algebraic terms:

 

(Committee-Approved
Percentage) x ((Adjusted Pre-Tax Net Income) + (Total Compensation Expense)) –

 

Fixed
Compensation = Discretionary Bonus Pool

 

For purposes of calculating the Discretionary Bonus
Pool, the following terms shall have the meanings as set forth herein.  For purposes of the defined terms used
herein, each reference to an item of revenue or expense shall be deemed to
refer to the consolidated amount of such revenue or expense, as the case may
be, of the Company and its subsidiaries for the applicable Bonus Plan Year.

 

Adjusted Pre-Tax Net Income shall mean an amount equal to Total
Revenue minus Total Expenses before income tax provisions.

 

Total Revenue shall mean an amount equal to the adjusted
revenue ; provided, however that revenue from extraordinary items, as
determined by the Company’s Chief Financial Officer (the “CFO”) and approved by
the CEO in their discretion will not be included in determining Total Revenue.

 

Total Expenses shall mean an amount equal to the adjusted
expenses, including expense accruals, for the Bonus Plan Year; provided,
however, that  the Company’s extraordinary
expenses as determined by the CFO and approved by the CEO in their discretion will
not be included in determining Total Expenses.

 

Total Compensation
Expense shall
mean an amount equal to the sum of (i) Fixed Compensation and (ii) the
Discretionary Accrual for the Bonus Plan Year.

 

Discretionary
Accrual shall
mean the projected discretionary bonus expense.

 

Fixed
Compensation
shall mean an amount equal to sum of the following expenses (i) the aggregate
base salary for all employees, (ii) all commission-related compensation
and (iii) the aggregate cost of all employee benefits plans and programs.

 

Section 6.  Allocation
of the Discretionary Bonus  Pool. 
The CEO will allocate a portion of the Discretionary Bonus Pool to each
member of the Executive Committee (the “Executive”), creating a sub-pool for
distribution by the Executive to eligible employees within his or her respective
business unit (the “Allocation”).  The
CEO will determine such Allocations taking 

 

2

 

into account in
his sole discretion the following considerations: (i) the portion of the
Company’s net income and return on equity attributable to each business unit, (ii) cost-saving,
performance-enhancing contributions to the Company attributable to business
units not expected to generate revenue, (iii) regulatory and risk-related
factors, (iv) comparative data and other information about the markets in
which the Company operates as applicable to each business unit and (v) such
other facts and circumstances as the CEO determines to be relevant in his sole
discretion.  It is understood that
precise, reliable and objective information with respect to all of the
foregoing considerations will not always be available for any given Bonus Plan
Year and that the relative significance and weight of such considerations can
and will vary from time to time and for each business unit.  In addition, the CEO will recommend to the
Committee that a portion of the Discretionary Bonus Pool be paid to each
Executive.  Taking into account such
recommendations, the Committee will determine in its sole discretion the
portion of the Discretionary Bonus Pool to be paid to each Executive.

 

Section 7.  Individual
 Bonus Awards.  Each Executive will allocate his or her
Allocation among all employees in his or her business unit (other than the
Executive) who are eligible to participate in the Bonus Plan (each such amount,
hereinafter referred to as an “Individual Bonus Award”).  Individual Bonus Awards shall be subject to
review and approval by the CAO and the CEO.   
Unless otherwise authorized by the Committee and directed by the CEO,
once approved in accordance with the Bonus Plan, all Individual Bonus Awards
and discretionary bonuses for each of the Executives shall be paid in cash
within seventy five (75) days following the end of a Bonus Plan Year.  Notwithstanding anything to the contrary: (i) no
Individual Bonus Award or any other payment pursuant to the Bonus Plan shall be,
or deemed to be, earned by any individual prior to the time it is actually paid
to such individual, (ii) no Executive or other employee of Capmark shall
have any vested interest or entitlement to any payment or award of any portion
of the Discretionary Bonus Pool prior to actual payment thereof and (iii) no
Executive or other employee shall have any right to receive information
concerning the deliberations of Capmark, including but not limited to deliberations
involving the Committee, the CEO, the CAO or the CFO, with respect to Bonus
Plan and the Discretionary Bonus Pool (including but not limited to the
Allocations and the Individual Bonus Awards).

 

Section 8.  Impact
on Benefit Plans.  Payments under the
Bonus Plan shall not be considered as earnings for purposes of the Company’s
qualified retirement plans or any such retirement or benefit plan unless
specifically provided for and defined under such plans.

 

Section 9.  Termination.  No Individual Bonus Award or any other
payment pursuant to the Bonus Plan shall be paid to any Executive or other employee
who becomes separated from service with the Company prior to actual payment thereof.  Nothing in the Bonus Plan shall confer any
right to any Executive or other employee to receive any payment under the Bonus
Plan or otherwise, or to continue to be employed by the Company.

 

Section 10.  Amendment
or Termination of this Bonus Plan. 
The Company shall have the right to amend or terminate the Bonus Plan at
any time by written action approved by the Committee.

 

Section 11.  Governing Law.  This Bonus Plan shall be governed by and
interpreted in accordance with the internal laws of the State of Pennsylvania,
without regard to its conflicts of law provisions.

 

Each of the
undersigned has approved this Bonus Plan as of the 31st day of
December, 2007.

 

(Signature page follows)

 

3

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  William F.
  Aldinger

  	
   

  	
  Linda A. Pickles

  
	
  Chief Executive
  Officer

  	
   

  	
  Executive Vice President &

  
	
   

  	
   

  	
  Chief
  Administrative Officer

  

 

4Exhibit
10.32

 

EXECUTION
COPY

 

CAPMARK
UK REALTY INCENTIVE VEHICLE, LLC

 

LIMITED LIABILITY COMPANY AGREEMENT

 

THE MEMBERSHIP INTERESTS
ISSUED PURSUANT TO THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES OR “BLUE SKY” LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT
BE SOLD OR TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND ANY OTHER APPLICABLE SECURITIES OR “BLUE SKY” LAWS, OR UNLESS
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.  SUCH MEMBERSHIP INTERESTS ARE SUBJECT TO THE
RESTRICTIONS ON TRANSFER SET FORTH IN THIS AGREEMENT.

 

 

Capmark
UK Realty Incentive Vehicle, LLC

 

Limited
Liability Company Agreement

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Recitals and Definitions

  	
  1

  
	
   

  	
  1.1

  	
  Recitals

  	
  1

  
	
   

  	
  1.2

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Formation of Limited Liability Company

  	
  6

  
	
   

  	
  2.1

  	
  Organization

  	
  6

  
	
   

  	
  2.2

  	
  Limited Liability Company Name

  	
  7

  
	
   

  	
  2.3

  	
  Purposes and Business

  	
  7

  
	
   

  	
  2.4

  	
  Principal Business Office; Registered Office and
  Registered Agent

  	
  7

  
	
   

  	
  2.5

  	
  Qualification in Other Jurisdictions

  	
  8

  
	
   

  	
  2.6

  	
  Powers

  	
  8

  
	
   

  	
  2.7

  	
  Application of the Act

  	
  8

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Management of the Limited Liability Company

  	
  8

  
	
   

  	
  3.1

  	
  General Authority

  	
  8

  
	
   

  	
  3.2

  	
  Reliance by Third Parties

  	
  9

  
	
   

  	
  3.3

  	
  Partnership Classification

  	
  9

  
	
   

  	
  3.4

  	
  Exculpation

  	
  9

  
	
   

  	
  3.5

  	
  Indemnification

  	
  9

  
	
   

  	
  3.6

  	
  Payment of Indemnification Expenses

  	
  10

  
	
   

  	
  3.7

  	
  Insurance

  	
  10

  
	
   

  	
  3.8

  	
  Indemnification Agreements

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Capital Contributions; Defaulting members

  	
  10

  
	
   

  	
  4.1

  	
  Capital Calls

  	
  10

  
	
   

  	
  4.2

  	
  Reinvestment of Proceeds; Recall of Distributed
  Capital

  	
  11

  
	
   

  	
  4.3

  	
  Procedure for Capital Calls

  	
  11

  
	
   

  	
  4.4

  	
  Interest

  	
  11

  
	
   

  	
  4.5

  	
  Pledge of Capital Commitments

  	
  11

  
	
   

  	
  4.6

  	
  Defaulting Members

  	
  12

  
	
   

  	
  4.7

  	
  Further Actions

  	
  13

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Distributions; Capital Accounts; Allocations

  	
  14

  
	
   

  	
  5.1

  	
  Distributions

  	
  14

  
	
   

  	
  5.2

  	
  Capital Accounts

  	
  14

  
	
   

  	
  5.3

  	
  Allocation of Income and Loss

  	
  15

  
	
   

  	
  5.4

  	
  Special Allocations

  	
  15

  
	
   

  	
  5.5

  	
  Excess Nonrecourse Liabilities

  	
  16

  
	
   

  	
  5.6

  	
  Code Section 704(b) Compliance

  	
  16

  
	
   

  	
  5.7

  	
  Tax Elections and Decisions

  	
  16

  

 

i

 

	
   

  	
  5.8

  	
  Safe Harbor Election and Forfeiture Allocations

  	
  16

  
	
   

  	
  5.9

  	
  Allocations and Distributions on
  Transfer of Compensatory Interests from the Company Controlled Limited
  Partner

  	
  17

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Effect of Employment Termination and Member Withdrawal;
  Vesting; Forfeiture; Repurchase

  	
  19

  
	
   

  	
  6.1

  	
  Cessation of Employment; Member Withdrawal

  	
  19

  
	
   

  	
  6.2

  	
  Vesting

  	
  21

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Transfers of Member Interests; Withdrawal

  	
  22

  
	
   

  	
  7.1

  	
  Assignability of Interests

  	
  22

  
	
   

  	
  7.2

  	
  Substitute Members

  	
  23

  
	
   

  	
  7.3

  	
  Legal Representatives

  	
  23

  
	
   

  	
  7.4

  	
  Obligations of Assignee

  	
  24

  
	
   

  	
  7.5

  	
  Additional Requirements

  	
  24

  
	
   

  	
  7.6

  	
  Allocation of Distributions Between Assignor and
  Assignee

  	
  25

  
	
   

  	
  7.7

  	
  Death or Incapacity of a Member

  	
  25

  
	
   

  	
  7.8

  	
  Pledged Interest

  	
  25

  
	
   

  	
  7.9

  	
  Withdrawal of a Member

  	
  25

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Admission of Members

  	
  25

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Rights and Obligations of the Members

  	
  26

  
	
   

  	
  9.1

  	
  Limited Liability

  	
  26

  
	
   

  	
  9.2

  	
  Authority of Members

  	
  26

  
	
   

  	
  9.3

  	
  Voting Rights of Members

  	
  26

  
	
   

  	
  9.4

  	
  General Release

  	
  27

  
	
   

  	
  9.5

  	
  Confidentiality

  	
  27

  
	
   

  	
  9.6

  	
  Non-Disparagement

  	
  28

  
	
   

  	
  9.7

  	
  No Right to Continued Employment

  	
  28

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Duration and Termination of the Limited Liability Company

  	
  29

  
	
   

  	
  10.1

  	
  Duration and Dissolution

  	
  29

  
	
   

  	
  10.2

  	
  Bankruptcy of Member

  	
  29

  
	
   

  	
  10.3

  	
  Effect of Admission or Withdrawal of Member

  	
  29

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Liquidation of the Limited Liability Company

  	
  29

  
	
   

  	
  11.1

  	
  General

  	
  29

  
	
   

  	
  11.2

  	
  Priority on Liquidation; Distributions

  	
  30

  
	
   

  	
  11.3

  	
  Orderly Liquidation

  	
  30

  
	
   

  	
  11.4

  	
  Source of Distributions

  	
  30

  
	
   

  	
  11.5

  	
  Statements on Termination

  	
  30

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Books and Records; Tax Matters

  	
  30

  
	
   

  	
  12.1

  	
  Books and Accounts

  	
  30

  
	
   

  	
  12.2

  	
  Records Available

  	
  31

  
	
   

  	
  12.3

  	
  Tax Matters Partner; Filing of Returns

  	
  31

  

 

ii

 

	
   

  	
  12.4

  	
  Fiscal Year

  	
  31

  
	
   

  	
  12.5

  	
  Tax Consequences to U.S. Taxpayers

  	
  31

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Power of Attorney

  	
  32

  
	
   

  	
  13.1

  	
  General

  	
  32

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Compensation of the Managing Member and Limited Liability
  Company Expenses

  	
  33

  
	
   

  	
  14.1

  	
  No Compensation

  	
  33

  
	
   

  	
  14.2

  	
  Limited Liability Company Expenses

  	
  33

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Miscellaneous

  	
  33

  
	
   

  	
  15.1

  	
  Further Assurances

  	
  33

  
	
   

  	
  15.2

  	
  Successors and Assigns

  	
  33

  
	
   

  	
  15.3

  	
  Applicable Law

  	
  33

  
	
   

  	
  15.4

  	
  Severability

  	
  33

  
	
   

  	
  15.5

  	
  Counterparts

  	
  34

  
	
   

  	
  15.6

  	
  Entire Agreement

  	
  34

  
	
   

  	
  15.7

  	
  Amendment

  	
  34

  
	
   

  	
  15.8

  	
  Construction

  	
  34

  
	
   

  	
  15.9

  	
  Force Majeure

  	
  34

  
	
   

  	
  15.10

  	
  Notices

  	
  34

  
	
   

  	
  15.11

  	
  No Right of Partition for Redemption

  	
  35

  
	
   

  	
  15.12

  	
  Third-Party Beneficiaries

  	
  35

  
	
   

  	
  15.13

  	
  General Partner as Limited Partner

  	
  35

  
	
   

  	
  15.14

  	
  Survival

  	
  35

  

 

Schedules:

 

Schedule A                                  List of Members,
Capital Commitments, Capital Commitment Percentages, Carried Interest
Percentages and Commencement Dates

 

iii

 

Capmark
UK Realty Incentive Vehicle, LLC

Limited
Liability Company Agreement

 

1.                                      Recitals
and Definitions

 

1.1           Recitals.  This Limited Liability Company Agreement
(this “Agreement”) has been entered into
as of September           ,
2007 (the “Effective Date”) by and among Capmark Carried Interest, L.L.C., a
Delaware limited liability company, as the managing member (the “Managing
Member”), and the persons listed from time to time in Schedule A of
this Agreement as Class A Members (the “Class A
Members”) and Class B Members (the “Class B
Members” which, together with the Class A Members, are
collectively referred to as the “Members”).

 

The Class A Members are the members that are required to make
capital contributions to the LLC in accordance with the terms hereof.

 

The Class B Members are the members that will be entitled to the
Carried Interest Revenue in accordance with the terms hereof.

 

1.2           Definitions.  Capitalized terms used in this Agreement
shall have the meanings set forth or referred to below.

 

“Act” shall have the meaning set
forth in Section 2.1.

 

“Adjusted Capital Account” means,
with respect to any Member, such Member’s Capital Account balance as increased
by such Member’s obligation to restore a deficit in its Capital Account,
including any deemed obligation pursuant to the penultimate sentences of
Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and
decreased by the amounts described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),
(5), or (6).  The foregoing definition of
Adjusted Capital Account and the provisions of Sections 5.4(a) and 5.4(e) are
intended to comply with the provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted and applied consistently therewith.

 

“Affiliate” of any Person means
any Person that directly or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, the Person
specified.  For the purposes of this
definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”) means the possession, directly or
indirectly, of the power, alone or together with others, to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract, or otherwise.

 

“Agreement” shall have the
meaning set forth in Section 1.1.

 

“Assign” or “Assignment” means any direct or indirect sale,
transfer, assignment, hypothecation, pledge or other disposition or encumbrance
of all or any part of a Member’s interest in the LLC.

 

 

“Business
Day” means any day on
which commercial banks located in the City of New York are open for business,
other than a Saturday, Sunday or other day on which they are permitted to be
closed for a federal or state declared holiday.

 

“Capital
Account” shall have
the meaning set forth in Section 5.2.

 

“Capital
Call” shall have the
meaning set forth on Section 4.1.

 

“Capital
Commitment Percentage”
means, for each Class A Member, the ratio that the Capital Commitment of
such Class A Member bears to the aggregate Capital Commitments of all Class A
Members, as set forth on Schedule A on the page applicable to
such Class A Member, subject to modification as set forth herein.

 

“Capital
Commitment” means,
for each Class A Member, the aggregate contribution which such Class A
Member has agreed to make to the LLC, whether or not contributed, which is
shown on Schedule A on the page applicable to such Class A
Member, subject to modification as set forth herein.

 

“Capital
Contribution” means,
as to each Class A Member, the amount of its Capital Commitment actually
contributed in cash or deemed to have been contributed under the terms of this
Agreement to the LLC by such Class A Member as of the time the
determination is made.

 

“Carried Interest Distributions”
means any distributions which are paid to the Class B Members pursuant to
this Agreement.

 

“Carried
Interest Percentage”
means, for each Class B Member, the percentage set forth on Schedule A
on the page applicable to such Class B Member, subject to
modification as set forth herein.

 

“Carried
Interest Revenue”
means the Incentive Distributions received by the Fund GP from the Fund
and distributed by the Fund GP to the LLC pursuant to the Fund GP Agreement,
which shall be 100% of the Incentive Distributions received by the Fund
GP.  The Carried Interest Revenue shall
also include all additional revenue attributable to Carried Interest Revenue.

 

“Cause” shall exist if the Capmark Financial Group
Inc. or its Affiliates reasonably determine that any one or more of the
following events has occurred while the Employee Member has been employed by
the Capmark Financial Group Inc. or one of its Affiliates: (i) the  Employee Member’s willful and continued
failure (except where due to a physical or mental incapacity) to substantially
perform his material duties with respect to the Capmark Financial Group Inc. or
one of its Affiliates which continues beyond ten (10) days after a written
demand for substantial performance is delivered to the Employee Member by
Capmark Financial Group Inc. or one of its Affiliates  (such ten-day period, the “Cure Period”); (ii) any gross misconduct of the Employee Member that causes
material and demonstrable injury, monetarily or otherwise, to Capmark Financial
Group Inc. or any of its Affiliates or any conduct that causes the Fund GP to
be removed for “cause” as defined in the Fund GP Agreement; (iii) conviction
of, or plea of guilty or nolo contendere to, the commission of (x) a
felony by the Employee Member or (y) any misdemeanor involving theft,
fraud, misappropriation or moral turpitude (other than in 

 

2

 

connection with any traffic
violations); (iv) the Employee Member’s disqualification or bar by any
governmental or self-regulatory authority from serving in his position with the
applicable Capmark Financial Group Inc. Affiliate or Capmark Financial Group
Inc.’s (including any of its Affiliates) loss of any governmental or
self-regulatory license that is reasonably necessary for the Employee Member to
perform his material duties with respect to the Capmark Financial Group Inc. or
any of its Affiliates in any such case, as a result of misconduct by the
Employee Member; (v) the Employee Member’s willful obstruction of, or
willful failure to cooperate with (except where due to a physical or mental
incapacity), any investigation authorized by Capmark Financial Group Inc. or
any of its Affiliates; provided that exercise by the Employee Member of his constitutional
rights under the Fifth Amendment of the United States Constitution in the event
of any criminal investigation of the Employee Member shall not be treated as
obstruction of or failure to cooperate with any such investigation; (vi) the
Employee Member’s material breach, if any, of Capmark Financial Group Inc.’s or
any of its Affiliates’ written code of conduct and business ethics, which
breach is customarily punishable by termination of employment by Capmark
Financial Group Inc. or any of its Affiliates; or (vii) a material breach
or a default by the Employee Member of this Agreement or any documents or
agreements entered into or delivered in connection with the Fund.

 

“Cessation
Event” shall have the
meaning set forth in Section 6.1(a).

 

“Class A
Capital Contribution Revenue” means all distributions that (a) are received by the Fund GP
from the Fund with respect to the Fund GP’s capital commitments or capital
contributions made to the Fund, and (b) are distributed by the Fund GP to
the LLC pursuant to the Fund GP Agreement.

 

“Change in
Control” shall have
the meaning set forth in the Stockholder’s Agreement.

 

“Class A
Members” has the
meaning set forth in Section 1.1.

 

“Class B
Members” has the
meaning set forth in Section 1.1.

 

“Code” shall mean the United
States Internal Revenue Code of 1986, as from time to time amended, and any
successor thereto.

 

“Commitment Period” has the meaning set
forth in the Fund Agreement.

 

“Company
Controlled Member”
means Capmark Structured Fund Carried Interest, L.P., a Delaware limited
partnership.

 

“Confidential
Information” shall
have the meaning set forth in Section 9.5(a).

 

“Defaulting Member” shall have
the meaning set forth in Section 4.6.

 

“Disabled Member” has the meaning
set forth in Section 7.3.

 

“Distributable
Proceeds” means all
cash of the LLC derived directly or indirectly from the Fund or in connection
with the Fund’s operations, Investments (as defined in the Fund 

 

3

 

Agreement), refinancings or other sources, which the
Member determines is available for distribution to the Members pursuant to and
in accordance with this Agreement.

 

“Effective Date” has the meaning
set forth in Section 1.1.

 

“Employee Members” mean the
Members other than the Company Controlled Member.

 

“Equity Interest” with respect to
any Member shall mean the entire right, title and interest of such Member in
the LLC and any appurtenant rights, including, without limitation, any right or
obligation to contribute capital to the LLC.

 

“Estimated Value Capital Account”
means, with respect to any Member, the amount such Member would receive in a
hypothetical liquidation of the LLC, the Fund GP and the Fund following a
hypothetical sale of all of the assets of the Fund (and any assets of the Fund
GP and the LLC, other than their direct or indirect interests in the Fund) at
prices equal to their most recent Fair Market Value (subject to adjustment by
the Managing Member, in its discretion, for significant events occurring
subsequent to such valuations made in accordance with the Investment Manager’s
investment policies), and the distribution of the proceeds thereof to the
partners of the Fund, the Fund GP and the Members pursuant to the Fund
Agreement, the Fund GP Agreement and this Agreement, respectively (after the
hypothetical payment of all actual indebtedness of the Fund, Fund GP and LLC,
assumed closing costs (as estimated by the Managing Member) and any other
liabilities related to the Fund’s, the Fund GP’s and the LLC’s assets, limited,
in the case of nonrecourse liabilities, to the collateral securing or otherwise
available to satisfy such liabilities).

 

“Fair
Market Value” means
the marked-to-market value of the investments in the Fund (on a fair value
basis) as determined by Capmark Investments LP in accordance with the Fund documents and Capmark Investments
LP’s valuation policy.

 

“Final Closing” has the meaning set forth in the Fund
Agreement.

 

“Fiscal Year” shall have the
meaning set forth in Section 12.4.

 

“Former Member” shall have the meaning
set forth in Section 6.1(a)(i)

 

“Fund
Agreement” mean the
Limited Partnership Agreement of the Fund, as amended, restated, supplemented
or otherwise modified from time to time.

 

“Fund GP Agreement” means the
Limited Liability Company Agreement of Fund GP, as amended, restated,
supplemented or otherwise modified from time to time.

 

“Fund GP” means UK Realty
Investors GP, LLC, a Delaware limited liability company.

 

“Fund” means Capmark UK Realty
Partners, L.P., a Delaware limited partnership.

 

“Good Reason” has the meaning set
forth in the Stockholder’s Agreement.

 

4

 

“Incentive Distributions” means
all distributions made to the Fund GP solely in its capacity as the general partner of the Fund in accordance
with Section 6.3 of the Fund Agreement; excluding any distributions
attributable to the Fund GP’s capital contributions to the Fund.

 

“Indemnified Party” shall have
the meaning set forth in Section 3.4.

 

“Initial Allocations” shall have
the meaning set forth in Section 2.3(a).

 

“Investment Company Act” means
the Investment Company Act of 1940, as amended from time to time.

 

“Investment
Manager” shall mean
Capmark Institutional Advisors LLC.

 

“Investment
Team Members”  shall have the meaning set forth in Section 2.3(a) hereof.

 

“Liquidating Agent” shall have
the meaning set forth in Section 11.1.

 

“Managing Member” means Capmark
Carried Interest, L.L.C., a Delaware limited liability company, or any Person
substituted for or who succeeds Capmark Carried Interest, L.L.C. as such
Managing Member pursuant to this Agreement.

 

“Members” shall have the meaning
set forth in Section 1.1.

 

“Non-Affiliated
Fund Partners” means
those limited partners of the Fund who are not Affiliates of Capmark Financial
Group Inc. (without limiting the foregoing, Affiliates of Capmark Financial
Group Inc. shall include Capmark Finance Inc., a California corporation, its
subsidiaries and officers and employees of Capmark Finance Inc., a California
corporation, the Investment Manager and their Affiliates) (which defined terms
shall have the meaning set forth in the Fund Agreement).

 

“Non-Affiliated
Carried Interest Revenue”
shall have the meaning set forth in Section 2.3(a) hereof.

 

“Non-Defaulting
Member” means any
Member that is not a Defaulting Member.

 

“Partner
Nonrecourse Debt Minimum Gain” shall have the meaning set forth in Section 5.4(d).

 

“Partner
Nonrecourse Debt”
shall have the meaning set forth in Section 5.4(d).

 

“Partnership Minimum Gain” shall
have the meaning set forth in Section 5.4(c).

 

“Partnership” shall mean Capmark
UK Realty Incentive Vehicle, LLC, a Delaware limited liability company.

 

“Permitted Purpose” shall have
the meaning set forth in Section 9.5(b).

 

5

 

“Person” shall mean a
corporation, association, retirement system, international organization, joint
venture, partnership, limited liability company, trust or individual.

 

“Pledged Interest” shall have the
meaning in Section 7.8.

 

“Predecessor In Interest,” as to
the Equity Interest of any Member, shall mean any Member which was the prior
holder of all or any portion of such Equity Interest.

 

“President” shall mean the
President, Capmark Investments, LP who shall initially be Brian DiDonato.

 

“Reference
Employee” means a
Person that is an employee of Capmark Financial Group Inc., the LLC, the Fund,
the Fund GP, the Managing Member or one of their Affiliates and that either (i) is
a Member or (ii) was a Member, and, in the case of either (i) or
(ii) has assigned all or part of his or her rights, benefits and
obligations as a Member to a family trust or other tax or estate planning
vehicle in accordance with Sections 7 and 8 hereof.

 

“Stockholder’s Agreement” shall
mean that certain Management Stockholder’s Agreement between GMAC Commercial
Holding Corp., a Nevada corporation, and such person listed as undersigned to
such agreement.

 

“Securities
Act” means the
Securities Act of 1933, as amended from time to time.

 

“Subscription
Agreement” means the
form of subscription agreement used by the LLC pursuant to which Members shall
subscribe for interests in the LLC and shall make Capital Commitments proposed
by the LLC or the Fund to be secured by the Class A Member’s Capital
Commitments.

 

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

 

“Uncontributed
Capital Commitment”
means (a) any portion of an Class A Member’s Capital Commitment that
has not been contributed to the LLC plus (b) any portion of an Class A
Member’s Capital Commitment that has been contributed to the LLC and has been
subsequently returned to such Class A Member and may be recalled pursuant
to Section 4.2.

 

2.                                      Formation of Limited Liability Company

 

2.1           Organization.  The LLC has been formed by the filing of the
certificate of formation (as it may be amended or restated from time to time,
the “Certificate”) for the LLC required
under the Delaware Limited Liability Company Act (as in effect from time to
time, the “Act”), with the Delaware
Secretary of State pursuant to the Act. 
Without the consent or approval of any Member, the Certificate may be
restated by the Managing Member as provided in the Act or amended by the Managing
Member to change the address of the office of the LLC in Delaware or the name
and address of its resident agent in Delaware or to make corrections 

 

6

 

required
by the Act.  The Managing Member shall
deliver a copy of the Certificate and any amendment thereto to any LLC who so
requests.

 

2.2           Limited
Liability Company Name.  The name of
the LLC shall be “Capmark UK Realty Incentive Vehicle, LLC”  The business of the LLC may be conducted,
upon compliance with all applicable laws, under the LLC name or any other name
or names designated by the Managing Member. 
The Managing Member in its sole discretion may change the name of the
LLC.  The Managing Member shall execute,
file, record and publish as appropriate any such amendments to the Certificate
of Limited LLC and other documents in connection therewith as are or become
necessary or advisable as determined by the Managing Member in its sole
discretion.  The Managing Member shall
promptly notify the Members of any such change in the name of the LLC.

 

2.3           Purposes
and Business.

 

(a)           The purpose and
principal business activity of the LLC is to serve as a member of Fund GP and
to serve as the vehicle through which the Fund GP’s Carried Interest Revenue
will be shared with the Company Controlled Member and certain individuals
providing services to or on behalf of the Fund and the Fund GP.  The Managing Member will cause the Company
Controlled Member to allocate to certain members of the Investment Manager’s
(as defined in the Fund Agreement) portfolio team (the “Investment Team Members”)
twenty-five (25%) initially (the “Initial Allocations”) of the Carried Interest
Revenue attributable to Non-Affiliated Fund Members (“Non-Affiliated Carried
Interest Revenue”) and subsequently to transfer Carried Interest Percentages
representing an additional (i) ten percent (10%) of the Non-Affiliated
Carried Interest Revenue to Investment Team Members during the Investment
Period (as defined in the Fund Agreement) and (ii) a minimum of five
percent (5%) up to a maximum of fifteen percent (15%) (such percentage to be
determined in accordance with Section 7.1(c), of the Non-Affiliated
Carried Interest Revenue to Investment Team Members and/or others employees of
Capmark Financial (as defined in the Fund Agreement) and its Affiliates who the
Managing Member determines have added value to the Fund.  The Managing Member shall revise Schedule
A attached hereto to reflect such transfers.  Notwithstanding anything to the contrary
herein, once the Initial Allocations have been transferred by the Company
Controlled Member in accordance with Section 7.1(c) and if any Class B
Member forfeits or otherwise transfers such Carried Interest percentage to the
Company Controlled Member, regardless of the reason, neither the Managing
Member nor the Company Controlled Member shall be under any obligation to
reissue or reallocate such Carried Interest Percentages to achieve the
percentage allocations noted above.

 

(b)           The LLC shall make
and perform all contracts and engage in all activities and transactions
necessary or advisable in connection therewith, subject to and in accordance
with the Fund Agreement and the Fund GP Agreement.  In addition, the LLC shall have the authority
to and may exercise all of the powers that can be conferred upon and exercised
by a limited partnership formed pursuant to the Act, including, without
limitation, the authority to borrow money and incur debt.

 

2.4           Principal
Business Office; Registered Office and Registered Agent.  The principal business office of the LLC
shall be located at c/o Capmark Carried Interest, L.L.C., 200 Witmer 

 

7

 

Road,
Horsham, PA 19044.  The principal
business office of the LLC may be changed from time to time by the Managing
Member.  The Managing Member shall notify
the Members of any change in such principal business office.  The registered office of the LLC in the State
of Delaware shall be c/o The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, Delaware 19801.  The agent for service of process on the LLC
pursuant to the Act shall be The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, Delaware 19801.  The registered agent and registered office of
the LLC may be changed by the Managing Member from time to time.  The Managing Member shall promptly notify the
Members of any such change.

 

2.5           Qualification
in Other Jurisdictions.  The Managing
Member may cause the LLC to be qualified or registered under applicable laws in
such states as the Managing Member determines appropriate to avoid any material
adverse effect on the business of the LLC and shall be authorized to execute,
deliver and file any certificates and documents necessary to effect such
qualification or registration, including, without limitation, the appointment
of agents for service of process in such jurisdictions.

 

2.6           Powers.  Subject to all of the provisions of this
Agreement, the LLC shall have the power to do any and all acts necessary,
appropriate, advisable, incidental or convenient to or in furtherance of the
purposes and business described herein, and shall have and may exercise all of
the powers and rights that can be conferred upon limited liability companies
formed pursuant to the Act.

 

2.7           Application
of the Act.  Except as expressly
provided in this Agreement, the rights and liabilities of the Members shall be
as provided in the Act.  In the event of
any inconsistency between any terms and conditions contained in this Agreement
and any non-mandatory provisions of the Act, the terms of this Agreement shall
govern.

 

3.                                      Management of the LLC

 

3.1           General
Authority.  The management and
operation of the LLC and its business and affairs shall be, and hereby are,
vested solely in the Managing Member. 
The Managing Member shall have full, complete and exclusive control of
the management and conduct of the business of the LLC and the authority to do
all things necessary or appropriate to carry out the purposes, business and powers
of the LLC as described herein, with full discretion and without any further
act, vote or approval of any Member (except as specifically provided in this
Agreement).  Except as expressly limited
in this Agreement, the Managing Member shall possess and enjoy with respect to
the LLC all of the rights and powers of a member of a limited liability company
without limited partners to the extent permitted by Delaware law.  Except as otherwise set forth herein, the LLC
hereby irrevocably delegates to the Managing Member, without limitation, the
power and authority to act on behalf of and in the name of the LLC, without
obtaining the consent of or consulting with any other Person to take any and
all actions on behalf of the LLC set forth in this Agreement.  The Managing Member, to the extent of its
powers set forth herein, is an agent of the LLC for the purpose of the LLC’s
business and the actions of the Managing Member taken in accordance with such
powers shall bind the LLC.

 

8

 

3.2                    Reliance by Third Parties. 
Any contract, instrument or act of the Managing Member on behalf of the
LLC shall be conclusive evidence in favor of any third party dealing with the
LLC that the Managing Member has the authority, power, and right to execute and
deliver such contract or instrument and to take such action on behalf of the
LLC.  This Section 3.2 shall not be
deemed to limit the liabilities and obligations of the Managing Member as set
forth in this Agreement.

 

3.3                    LLC Classification. 
The Managing Member shall use its best efforts to cause the LLC to be
treated for federal income tax purposes as a partnership and not as an
association or publicly traded partnership taxable as a corporation.  The LLC shall not elect to be treated other
than as a partnership for federal income tax purposes.

 

3.4                    Exculpation. 
Neither the Managing Member nor its Affiliates nor any of their
respective principals, heirs, executors, administrators, partners, members,
stockholders, employees, employers, officers, directors, managers, agents,
advisors, successors or assigns (each an “Indemnified
Party”) shall have any liability to the LLC or any Member for any
loss suffered by the LLC or any Member which arises out of any action or
inaction of an Indemnified Party, unless such action or inaction (a) is
undertaken or omitted in connection with providing services to the LLC or the
performance of the Managing Member’s duties under this Agreement and (b) is
finally adjudicated by a court of competent jurisdiction to  constitute
fraud, gross negligence or willful misconduct of such Indemnified Party.  Notwithstanding anything to
the contrary in this Agreement, to the extent that, at law or in equity, a
Member has duties (including fiduciary duties) and liabilities relating thereto
to the LLC, any Member or any other Person, such Member acting under this
Agreement shall not be liable to the LLC, any Member or any other Person for
breach of fiduciary duty for its good faith reliance on the provisions of this
Agreement, and the provisions of this Agreement, to the extent that they
explicitly restrict or eliminate the duties (including fiduciary duties) and
liability of a Member otherwise existing at law or in equity, are agreed by
each Member to replace such other duties and liabilities of such Member.  In addition, an Indemnified Party shall not
be liable to the LLC, any Member or any other Person for its good faith
reliance on the advice of any counsel, accountant or other advisor retained by
the LLC.

 

3.5                    Indemnification.

 

(a)                                 Subject to the limitations contained in
this Section 3.5, the LLC shall  indemnify each
Indemnified Party against all losses, liabilities, damages and expenses
incurred by such Indemnified Party as a result of any actions or omissions
taken or omitted in connection with providing services to the LLC or the
performance of the Managing Member’s duties under this Agreement or by reason
of any action or omission taken or omitted on behalf of the LLC.  Such indemnity shall cover, without implied
limitation, judgments, settlements, fines, penalties and counsel fees incurred
in connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before or threatened to be brought
before any court or administrative body, in which an Indemnified Party may be
or may have been involved as a party or otherwise, or with which it may have
been threatened, by reason of being or having been an Indemnified Party, or by
reason of any act or omission on behalf of the LLC or otherwise taken or
omitted in connection with providing services to the LLC or the performance of
the Managing Member’s duties under this Agreement; provided, however, that an
Indemnified Party 

 

9

 

shall not be entitled to indemnification pursuant to
this Section 3.5 with respect to any matter as to which such Indemnified
Party shall have been finally adjudicated by a court of competent jurisdiction
in any such action, suit or other proceeding to have committed an act or omission
that (i) was undertaken or omitted in connection with providing services
to the LLC or the performance of the Managing Member’s duties under this
Agreement and (ii) constituted fraud, gross
negligence or willful misconduct.  The
right of indemnification provided hereby shall not be exclusive of, and shall
not affect, any other rights to which any Indemnified Party may be entitled and
nothing contained in this Section 3.5 shall limit any lawful rights to
indemnification existing independently of this Section 3.5.

 

(b)                                In the event that for any reason the
indemnification called for by this Section 3.5 is unavailable or
insufficient to hold harmless an Indemnified Party in accordance with the terms
hereof (other than as a result of a failure to satisfy the conditions to such
indemnification as set forth in Section 3.5(a)), then the LLC shall
contribute to the amount paid or payable by such Indemnified Party (which
contribution may equal up to 100% of such amount) as a result of any losses,
judgments, liabilities, fines, penalties,
expenses and amounts paid in settlement referred to in Section 3.5(a) such
that the Indemnified Party would be in the same financial position it
would have been in if the indemnification called for by this Section 3.5
were available and sufficient.

 

3.6                    Payment of Indemnification Expenses. 
Prior to the final disposition of any claim or proceeding with respect
to which any Indemnified Party may be entitled to indemnification hereunder, in
the Managing Member’s sole and absolute discretion the LLC may pay to the
Indemnified Party, in advance of such final disposition, an amount equal to all
expenses of such Indemnified Party reasonably incurred in the defense of such
claim or proceeding so long as the LLC has received a written undertaking of
such Indemnified Party to repay to the LLC the amount so advanced if it shall
be finally determined that such Indemnified Party was not entitled to
indemnification hereunder.

 

3.7                    Insurance.  The Managing
Member, in its sole and absolute discretion, may cause the LLC to purchase and
maintain insurance on behalf of any Indemnified Party against any liability or
cost incurred by such Indemnified Party in any such capacity or arising out of
its status as such, whether or not the LLC would have the power to indemnify
against such liability or cost.

 

3.8                    Indemnification Agreements. 
The Managing Member, in its sole and absolute discretion, may cause the
LLC to enter into agreements with any Indemnified Party setting forth
procedures consistent with applicable law for implementing the indemnities
provided in this Article 3.

 

4.                                      Capital
Contributions; Defaulting Members

 

4.1                    Capital Calls. 
Each Class A Member agrees to pay to the LLC an aggregate amount in
cash equal to its Capital Commitment set forth opposite such Class A
Member’s name on Schedule A hereto on the page applicable to
such Class A Member, subject to modification as set forth herein.  All or any portion of each Class A
Member’s Capital Commitment shall be 

 

10

 

payable upon not less than nine (9) Business Days’
prior written notice (a “Capital Call”)
from the Managing Member in accordance with Section 4.3 below.  Each Class A Member shall be required to
contribute such Member’s Capital Commitment Percentage of the Capital Call on
the due date specified in the Capital Call. 
All Capital Contributions from Class A Members, as applicable,
shall be contributed to the Fund GP promptly upon receipt by the LLC in
accordance with the Fund GP Agreement. 
Except as otherwise provided below in this Section 4.1, no Capital
Calls may be made after Investment Period. 
Capital Calls may be made to the extent permitted or required under the
Fund GP Agreement.  No Member shall have
any right to make any Capital Contribution that has not been called by the
Managing Member pursuant to this Section 4.1.  The Managing Member shall not have any
Capital Commitment in its capacity as Managing Member, but the Managing Member
shall make such contributions as may be needed to timely pay LLC expenses in
accordance with Section 14.2. 
Notwithstanding anything to the contrary in this Agreement, in no event
shall any Class A Member be required to make Capital Contributions to the
LLC in respect of its Capital Commitment in excess of its Capital Commitment.

 

4.2                    Reinvestment of Proceeds; Recall of
Distributed Capital.  The Managing Member may recall from the Class A
Members such Distributable Proceeds which have been distributed pursuant to Section 5.1
as may be required to satisfy the Fund GP’s obligations pursuant to Section 5.3
of the Fund Agreements.

 

4.3                    Procedure for Capital Calls. 
A Capital Call shall be in the form of a written notice to all Class A
Members specifying the general purpose of such Capital Call and an aggregate
dollar amount and a date on which payment shall be due, which date shall be no
less than nine (9) Business Days after the date of receipt of such
notice.  Each Class A Member shall
be required to contribute an amount equal to the product of its Capital
Commitment Percentage multiplied by the aggregate amount of such Capital
Call.  The Managing Member may, subject
to compliance with the above advance notice requirements, amend, delay or
rescind Capital Calls at any time prior to the payment due date thereof.  The amendment, delay or rescission of a
Capital Call shall not affect or abridge the right of the Managing Member to
make any subsequent Capital Call.

 

4.4                    Interest.  No Class A
Member shall be entitled to receive any interest on any Capital Contributions
to the LLC.

 

4.5                    Pledge of Capital Commitments. 
In connection with any borrowings by the Fund or any Affiliates which
are to be secured (directly or indirectly) by the Capital Commitments to the
Fund, the Managing Member or the Fund GP shall be authorized to transfer and
grant security interests in the right to initiate Capital Calls and collect the
Capital Commitments of the Class A Members.  Each Class A Member shall promptly
execute and deliver reasonable estoppel certificates and reasonable investor
consent/subscriber letters (to the extent required by lenders to the Fund or
any Affiliate of any of the foregoing) and deliver required opinions of counsel
regarding the due formation, valid existence and good standing, to the extent
applicable given the type of Class A Member, of such Class A Member
and the due authorization, valid execution and delivery of its Subscription
Agreement and this Agreement and any documents executed in connection with any
such borrowing and shall execute such other instruments and take such other
action as the Managing Member, Fund GP or such lender may reasonably require 

 

11

 

in order to effectuate any such borrowings by the Fund
or Affiliate(s) of the foregoing. 
To the extent that the Fund or any Affiliates have outstanding
obligations under a credit facility secured (directly or indirectly) by the
Capital Commitments of the Class A Members, each Class A Member shall
be obligated to fund any remaining portion of its Capital Commitment without
defense, counterclaim or offset of any kind, including any defense arising
under Section 365(c) of the U.S. Bankruptcy Code, if applicable,
provided that such agreement to fund shall not act as a waiver by such Class A
Member of its right to assert independently any claim that the Class A
Member may have against any other Member, the LLC, the Fund or any Affiliate of
the foregoing.  Each Class A Member
shall also use best efforts to provide to the LLC, the Fund, any applicable
Affiliate of the foregoing and to the lender, if necessary, information and
representations necessary to ensure that the lending arrangement will not
constitute a non-exempt “prohibited transaction” under ERISA.  Nothing in this Section 4.5 shall
require any Class A Member to take any action that would cause such Class A
Member to assume personal liability to the LLC or any Affiliate of the
foregoing or any third party in an amount which exceeds such Class A
Member’s uncontributed Capital Commitment. 
In the event that, as a result of any such transfer or grant of a
security interest, a Class A Member makes a payment directly to a lender
as required pursuant thereto, such payment shall be deemed to be a Capital
Contribution of such Class A Member to the LLC.

 

4.6                                 Defaulting Members.  In
the event that a Member fails to contribute, in a timely manner, any portion of
the Capital Commitment required to be contributed by such Member, the Managing
Member shall send a notice of such default to such member in accordance with Section 14.10
of this Agreement.  If such Member fails
or refuses to pay in full such Defaulted Portion of the Capital Commitment
within five Business Days after receipt of such notice (the “Default Date”),
then such Member (a “Defaulting
Member”) shall be in default and shall be subject to the
provisions of this Section 4.6.

 

(b)                     The Managing member shall charge to the Defaulting
member interest in an amount on all or any part of such portion at a rate equal
to the lesser of (i) eighteen percent (18%) per annum and (ii) the
maximum permitted by law, commencing on the date such obligation was due the to
the LLC.  In addition, any such
Defaulting Member shall reimburse the LLC for all costs incurred by the LLC in
connection with its pursuit of collection or other remedies described in this Section 4.6.

 

(c)                      Except as expressly provided in the Act,
whenever the vote, consent or decision of the Members is required or permitted
pursuant to this Agreement, a Defaulting Member shall not be entitled to
participate in such vote or consent, or to make such decision, and such vote,
consent or decision shall be tabulated or made as if such Defaulting Member
were not a Member.  Notwithstanding
anything in this Agreement to the contrary, a Defaulting Member shall not be entitled
to any distributions pursuant to Article 5 of this Agreement.

 

(d)                     Upon any such default, the Defaulting Member’s Capital
Account and Capital Contributions shall be reduced (but not below zero) by an
amount equal to 25% of their amounts as of the Default Date, and each such
amount shall be allocated to non-defaulting Members as of the Default Date, in
proportion to the respective Capital Contributions of the non-defaulting
Members as of such date, and all of such Defaulting Member’s transferred Capital
Contributions, as applicable, previously made shall be deemed to be Capital
Contributions by such

 

12

 

non-defaulting Members,
as applicable, as of such date (provided that the Uncontributed Capital Commitment,
as applicable, of such Member shall not be reduced by reason of such deemed
transfer).  The non-defaulting Members
will be required to contribute additional amounts pro rata in proportion to
their respective Capital Contributions to cover defaulted amounts, but in no
event shall any non-defaulting Member be required to make any additional
Capital Contribution in an amount greater than such Member’s Uncontributed
Capital Commitment of such Member.  A
Defaulting Member shall remain obligated from and after such default to make
Capital Contributions in accordance with Section 4.1 of this Agreement,
and a Defaulting Member’s Capital Account shall be reduced, as set forth in Section 4.1
of this Agreement, in the event of each and every default committed by it.

 

(e)                      In the event of a default by a Member,
the Managing Member shall deliver to each non-defaulting Member a Capital Call
(as defined in Section 4.1) requiring such non-defaulting Member to make
an additional Capital Contribution, as applicable (up to the amount, but not in
excess of, its Uncontributed Capital Commitment), to the LLC that is in the
same proportion to the Defaulting Member’s defaulted Capital Contribution, as
such non-defaulting Member’s Uncontributed Capital Commitment bears to the aggregate
Uncontributed Capital Commitments and of all non-defaulting Members, and
provided that such restriction shall not be applicable to the extent a Capital
Contribution is required to repay amounts outstanding under any Credit
Facility.

 

(f)                        No portion of any income, gain or loss
realized by the LLC shall be allocated to the Defaulting Member from and after
the Default Date, and from and after the Default Date such Defaulting Member
shall not be entitled to any distributions from the LLC other than the
distribution of its Capital Account in liquidation of the LLC as provided in Article 10
of this Agreement.

 

(g)                     No right, power or remedy conferred upon the LLC
against a Defaulting Member in this Section 4.6 shall be exclusive, and
each such right, power or remedy shall be cumulative and in addition to every
other right, power or remedy whether conferred in this Section 4.6 or now
or hereafter available at law or in equity or by statute or otherwise.  No course of dealing between the Managing
Member and any Defaulting Member and no delay in exercising any such right,
power or remedy shall operate as a waiver or otherwise prejudice any such
right, power or remedy.

 

(h)                     Each Member agrees that the aforesaid liquidated
damages provisions constitute reasonable compensation to the LLC and its
non-defaulting Members for the additional risks and damages sustained by them
when and if any Member shall default on an obligation to pay any capital
contribution when due.

 

4.7                    Further Actions. 
To the extent necessary in the sole discretion of the Managing Member,
the Managing Member shall cause this Agreement (and, if required, the
Certificate) to be amended to reflect as appropriate the occurrence of any of
the transactions referred to in this Section 4 as promptly as is
practicable after such occurrence.

 

13

 

5.                         Distributions; Capital
Accounts; Allocations

 

5.1                                 Distributions.

 

(a)                                  Subject to Sections 4.6, and 5.1(b), the Managing Member shall cause
the LLC to make distributions as follows:

 

(i)                                     all Carried
Interest Revenue shall be distributed among the Class B Members in
proportion to their respective Carried Interest Percentages promptly following
receipt by the LLC;

 

(ii)                                  all Class A
Capital Contribution Revenue shall be distributed among the Class A
Members in proportion to their respective Capital Commitment Percentages
promptly following receipt by the LLC;

 

(iii)                               all other
revenue of the LLC not described in Sections 5.1(a)(i) or 5.1(a)(ii) shall
be distributed to the Class A Members in proportion to their respective
Capital Commitment Percentages promptly following receipt by the LLC.

 

(b)                                 Notwithstanding any other provision of this Agreement, no distribution
shall be made if such distribution would violate any contract or agreement to
which the LLC is then a party or any law, rule, regulation, order or directive
of any governmental authority then applicable to the LLC.

 

(c)                                  Any amount paid by the LLC to any
federal, state, local or foreign tax authority, or withheld from amounts
otherwise payable to the LLC, that is in the nature of a withholding tax with
respect to the interest of any Member in the LLC shall be treated as a
distribution to such Member.

 

5.2                    Capital Accounts. 
A separate capital account (each, a “Capital
Account”) shall be maintained for each Member in accordance with the
rules of Treasury Regulations Section 1.704-1(b)(2)(iv), and this Section 5.2
shall be interpreted and applied in a manner consistent therewith.  The LLC may adjust the Capital Accounts of
its Members to reflect revaluations of the LLC property whenever the adjustment
would be permitted under Treasury Regulations Section 1.704-1(b)(2)(iv)(f). 
In the event that the Capital Accounts of the Members are so adjusted, (i) the
Capital Accounts of the Members shall be adjusted in accordance with Treasury
Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of
depreciation, depletion, amortization and gain or loss, as computed for book
purposes, with respect to such property, (ii) the Members’ distributive
shares of depreciation, depletion, amortization and gain or loss, as computed
for tax purposes, with respect to such property shall be determined so as to
take account of the variation between the adjusted tax basis and book value of
such property in the same manner as under Section 704(c) of the Code,
and (iii) the amount of upward and/or downward adjustments to the book
value of the LLC property shall be treated as income, gain, deduction and/or
loss for purposes of applying the allocation provisions of this Article 5.  In the event that Code Section 704(c) applies
to LLC property, the Capital Accounts of the Members shall be adjusted in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for
allocations of depreciation, depletion, amortization and gain and loss, as
computed for book purposes, with respect to such property.

 

14

 

5.3                    Allocation of Income and Loss. 
Subject to the special allocations, if any, required by Section 5.4
below, and except as otherwise required to comply with the requirements of Code
Section 704 (as determined by the Managing Member in good faith),
allocations shall be made among the Members as follows:

 

(a)                                  All items of LLC income, gain, loss
and deduction allocated to the LLC by the Fund GP and attributable to Class A
Capital Contribution Revenue shall be allocated among the Class A Members
in proportion to their respective Capital Commitment Percentages.

 

(b)                                 All items of LLC income, gain, loss
and deduction allocated to the LLC by the Fund GP and attributable to Carried
Interest Revenue shall be allocated among the Class B Members in
proportion to their respective Carried Interest Percentages.

 

(c)                                  All LLC expenses shall be allocated
to the Managing Member.

 

(d)                                 All other items of LLC income,
gain, loss and deduction not described in Section 5.3(a), 5.3(b) or
5.3(c) shall be allocated among the Class A Members in proportion to
their respective Capital Commitment Percentages.

 

5.4                    Special Allocations.

 

(a)                                  Any Member who unexpectedly
receives an adjustment, allocation or distribution described in Treasury
Regulations Section l.704-l(b)(2)(ii)(d)(4), (5) or (6) that causes or
increases a deficit balance in its Adjusted Capital Account shall be allocated
items of income and gain in an amount and a manner sufficient to eliminate, to
the extent required by Treasury Regulations Section 1.704-1(b)(2)(ii)(d), such excess deficit balance as quickly
as possible.

 

(b)           Nonrecourse
Deductions shall be allocated to the Members in accordance with their Capital
Commitment Percentages.  For purposes of
this Section 5.4(b), the term “Nonrecourse Deductions” shall have
the meaning set forth in Treasury Regulations Section 1.704-2(b)(1).

 

(c)           Notwithstanding
any other provisions of this Agreement, in the event there is a net decrease in
Partnership Minimum Gain during a taxable year, the Members shall be allocated
items of income and gain in accordance with Treasury Regulations Section 1.704-2(f).  For purposes of this Agreement, the term “Partnership
Minimum Gain” shall have the meaning for “partnership minimum gain” set
forth in Treasury Regulations Section 1.704-2(b)(2), and any Member’s
share of Partnership Minimum Gain shall be determined in accordance with
Treasury Regulations Section 1.704-2(g)(1).  This Section 5.4(c) is intended to
comply with the minimum gain chargeback requirement of Treasury Regulations Section 1.704-2(f) and
shall be interpreted and applied in a manner consistent therewith.

 

(d)           Notwithstanding
any other provisions of this Agreement, to the extent required by Treasury
Regulations Section 1.704-2(i), any items of income, gain, deduction and
loss of the LLC that are attributable to a nonrecourse debt of the LLC that
constitutes Partner Nonrecourse Debt (including chargebacks of Partner
Nonrecourse Debt Minimum Gain) shall be allocated in accordance with the
provisions of Treasury Regulations Section 1.704-2(i).  For 

 

15

 

purposes
of this Agreement, the term “Partner Nonrecourse Debt” shall have the
meaning for “partner nonrecourse debt” set forth in Treasury Regulations Section 1.704-2(b)(4),
and the term “Partner Nonrecourse Debt Minimum Gain” shall have the meaning for
“partner nonrecourse debt minimum gain” set forth in Treasury
Regulations Section 1.704-2(i)(2). 
This Section 5.4(d) is intended to satisfy the requirements of
Treasury Regulations Section 1.704-2(i) (including the partner
nonrecourse debt chargeback requirements) and shall be interpreted and applied
in a manner consistent therewith.

 

(e)                                  The items of deduction or loss
allocated to a Member pursuant to Section 5.3(a) shall not exceed the
maximum amount of such items that can be allocated without causing or
increasing a deficit balance in any Member’s Adjusted Capital Account.

 

(f)                                    Notwithstanding anything to the
contrary in this Agreement, the Managing Member may make adjustments to the
Capital Accounts of the Members as necessary to give effect to the provisions
of Article 6 and the economic arrangements set forth therein.

 

5.5       Excess Nonrecourse Liabilities. 
For purposes of allocating excess non-recourse liabilities under
Treasury Regulations Section 1.752-3(a)(3), the “partners’ interests in
partnership profits” shall be the Members’ respective shares of items
attributable to Carried Interest Revenue under Section 5.3(b), and such
nonrecourse liabilities shall be allocated among the Members in accordance with
Carried Interest Percentages.

 

5.6       Code Section 704(b) Compliance. 
The allocation provisions contained in this Article 5 are intended
to comply with Code Section 704(b) and the Treasury Regulations
promulgated thereunder and shall be interpreted and applied in a manner
consistent therewith.

 

5.7       Tax Elections and Decisions. 
Any elections or other decisions relating to the allocations of LLC
items of income, gain, loss, deduction, credit or other tax matters shall be
made by the Managing Member in any manner that reasonably reflects the purpose
and intention of this Agreement.  The LLC
shall make such elections pursuant to the provisions of the Code (including Section 754
of the Code) as the Managing Member, in its sole and absolute discretion,
determines to be appropriate.

 

5.8       Safe Harbor Election and Forfeiture
Allocations.

 

(a)           The Managing Member is
hereby authorized and directed to cause the LLC to make an election to value
the interests in the LLC issued or transferred as compensation for services to
the LLC, the Managing Member, the Fund or the Fund GP (“Compensatory Interests”) at liquidation value
(the “Safe Harbor Election”), as the same
may be permitted pursuant to or in accordance with the finally promulgated
successor rules to Proposed Treasury Regulations Section 1.83-3(l) and
IRS Notice 2005-43 whether promulgated in the form of Treasury Regulations,
revenue rulings, revenue procedure notices and/or other IRS guidance
(collectively, the “Proposed Rules”).

 

(b)           Any such Safe Harbor
Election shall be binding on the LLC and on all of its Members with respect to
all transfers of Compensatory Interests thereafter made while a Safe Harbor
Election is in effect.  A Safe Harbor
Election once made may be revoked by the Managing Member as permitted by the
Proposed Rules or any applicable rule.

 

16

 

(c)           Each
Member, by signing this Agreement or by accepting such transfer, hereby agrees
to comply with all requirements of the Safe Harbor Election with respect to
Compensatory Interests while the Safe Harbor Election remains effective.

 

(d)           The Managing
Member shall file or cause the LLC to file all returns, reports and other
documentation as may be required to perfect and maintain the Safe Harbor
Election with respect to transfers of Compensatory Interests.

 

(e)           The
Managing Member is hereby authorized and empowered, without further vote or
action of the Members, to amend the Agreement as necessary to comply with the
Proposed Rules or any rule, including the allocation provisions of the
Agreement, in order to provide for a Safe Harbor Election and the ability to
maintain or revoke the same, and shall have the authority to execute any such
amendment by and on behalf of each Member.

 

(f)            Each
Member agrees to cooperate with the Managing Member to perfect and maintain any
Safe Harbor Election, and to timely execute and deliver any documentation with
respect thereto reasonably requested by the Managing Member.

 

(g)           No
transfer, assignment or other disposition of any interest in the LLC by a
Member shall be effective unless prior to such transfer, assignment or
disposition the transferee, assignee or intended recipient of such interest
shall have agreed in writing to be bound by the provisions of this Section 5.9,
in form satisfactory to the Managing Member.

 

(h)           Notwithstanding
anything to the contrary in this Article 5, upon a forfeiture of any
Compensatory Interest by any Member, gross items of income, gain, loss or
deduction shall be allocated to such Member if and to the extent required by
final Treasury Regulations promulgated after the date hereof to ensure that
allocations made with respect to all unvested LLC interests are recognized
under Code Section 704(b).

 

5.9                    Allocations and Distributions on Transfer
of Compensatory Interests from the Company Controlled Member.

 

In the event that
the Company Controlled Member transfers any Compensatory Interests, the
following adjustments shall be made:

 

(i)                        The allocations of net income (or items
thereof) and distributions that would otherwise be made or paid under Section 5.3(b) and
5.1(a)(i) with respect to such transferred Compensatory Interests after
such transfer date shall be reduced, and the resulting amounts that would have
been allocated or distributed with respect to such Compensatory Interests shall
instead be allocated or distributed, as the case may be, to the Company
Controlled Member, as necessary so that the Company Controlled Member receives
sufficient allocations and distributions to provide the Company Controlled
Member with the economic benefit of any “built-in gain” associated with such Compensatory
Interests immediately prior to such transfer based on the Fair Market Value and
the principles that would apply if the LLC revalued its assets in the manner
contemplated by Treasury Regulations Section 1.704-1(b)(2)(iv)(f) immediately
prior to such transfer and otherwise as necessary for such Compensatory
Interests to qualify as a “profits interest” for federal income tax purposes at
the time of such transfer.

 

17

 

(ii)       Subject
to Section 5.9(i) and once the allocations or distributions to the
Company Controlled Member required by Section 5.9(i) with respect to
Compensatory Interests have been made, subsequent allocations of gain or loss
(or items thereof) and/or distributions, as the case may be, that would
otherwise be made or paid under Section 5.3(b) and 5.1(a)(i) to
the Company Controlled Member shall instead be made or paid to the holder of
such Compensatory Interests as necessary so that (i) the cumulative
distributions under Section 5.1(a)(i) (as adjusted pursuant to this Section 5.9(ii))
with respect to such Compensatory Interests equal the cumulative distributions
that would have been made with respect to such Compensatory Interests under Section 5.3(b) if
this Agreement did not contain this Section 5.9 and (ii) the
distributions under Section 5.1(a)(i) with respect to such
Compensatory Interests are the same as they would have been if this Agreement
did not contain this Section 5.9.

 

(iii)      The
Managing Member’s good faith determination of the amount and timing of any
special allocations and distributions required by this Section 5.9 shall
be final and binding upon the Members.

 

(iv)      The
Managing Member may modify the adjustments required by this Section 5.9
with respect to Compensatory Interests in its sole and absolute discretion
provided that such modification is provided to the transferee in writing prior
to the Company Controlled Member’s transfer of such Compensatory Interests to
such transferee.

 

(v)       Except
as otherwise determined by the Managing Member pursuant to Section 5.9(iv),
it is intended that any Compensatory Interests transferred by the Company
Controlled Member in consideration for services rendered or to be rendered by
the transferee to the LLC, the Managing Member, the Fund or the Fund GP qualify
as a “profits interest” for federal income tax purposes and that the
allocations and distributions set forth in this Section 5.9 provide the
Company Controlled Member and the holder of such transferred Compensatory
Interests with the same cumulative distributions that they would have had if
the Compensatory Interests had not been structured as a profits interest, and
the provisions of this Section 5.9 shall be applied and interpreted
consistent with such intentions.

 

(vi)      Notwithstanding
Section 5.9(ii), net loss (or items thereof) shall not be allocated to the
transferee of the Compensatory Interests from the Company Controlled Member to
the extent such net loss or items represent a “chargeback” of income or gain
allocated to the Company Controlled Member for periods prior to the transfer of
such Compensatory Interests.

 

18

 

6.                         Effect of Employment Termination and Member
Withdrawal; Vesting; Forfeiture; Repurchase

 

6.1                                 Cessation of Employment; Member
Withdrawal.

 

(a)                                  In the event that (x) an
Employee Member fails to fund his Capital Commitment (and provided that such
default has not been cured by the Defaulting Member together with the payment
of interest in accordance with Section (a), within such five (5) Business
Day period) or (y) an Employee Member or its Reference Employee ceases to
be employed by Capmark Financial Group Inc., the LLC, the Fund, the Fund GP,
the Managing Member or any of their Affiliates for any reason, including, without
limitation, death, termination of employment by the Employee Member or its
Reference Employee or termination of the Employee Member’s or its Reference
Employee’s employment by Capmark Financial Group Inc., the LLC, the Fund, the
Fund GP, the Managing Member or any of their Affiliates, either with or without
cause, bankruptcy, retirement or disability, or an Employee Member or its
Reference Employee withdraws in accordance with Section 7.9 (each a “Cessation Event”), then all of the following
shall apply:

 

(i)                                     such Employee Member or its Reference
Employee and any assignee of such Employee Member or its Reference Employee
(each of which is referred to as a “Former Member”),
if any, shall immediately cease to have any right to approve, vote on or
consent to any matter submitted to the Employee Members for their approval,
vote or consent;

 

(ii)                                  any Carried Interest Percentage held by
the Former Member shall cease vesting immediately, subject to the provisions of
Section 6.2 with respect to accelerated vesting in certain circumstances;
and

 

(iii)                               any unvested portion of the Carried Interest
Percentage held by the Former Member shall be immediately transferred to the
Company Controlled Member, subject to the provisions of Section 6.2 with
respect to accelerated vesting in certain circumstances.

 

(b)                                 Notwithstanding the above, in the
event that (a) a Cessation Event has occurred with respect to the Former
Member as a result of termination of employment 
for Cause, (b) an estate planning vehicle established for such
Employee Member or its Reference Employee has beneficiaries other than the
Employee Member or its Reference Employee, his or her spouse or his or her
lineal descendants or beneficiaries otherwise approved by the Managing Member,
in its sole discretion, in accordance with Section 7.1(a), or (c) the
Former Member violates any provision of any confidentiality or
non-disparagement agreement by and between the Former Member and Capmark
Financial Group Inc., the LLC, the Fund, the Fund GP, the Managing Member or
their Affiliates or any employment agreement by and between the Former Member
and Capmark Financial Group Inc., the LLC, the Fund, the Fund GP, the Managing
Member or their Affiliates, including Sections 9.5 and 9.6 of the Agreement, as
applicable, then the provisions of this Section 6.1(a) and 6.1(b) shall
apply to the entirety of the Former Member’s Carried Interest Percentage,
including the vested and unvested portion thereof, and

 

19

 

such
Former Member shall forfeit such Carried Interest Percentage without any
consideration being paid to such Former Member by the LLC or the Managing
Member therefor.

 

(c)                                  With respect to a Former Member
that leaves without Good Reason, the Carried Interest Percentage held by the
Former Member, if any, shall thereafter be deemed to equal only the vested
portion of such Carried Interest Percentage (i.e., if the Former Member had a
5% Carried Interest Percentage and 20% of that Carried Interest Percentage had
vested at the time of the Cessation Event, then the Carried Interest Percentage
of the Former Member immediately following the Cessation Event would be 1%) and
the Former Member shall be entitled to 100% of the LLC distributions of Carried
Interest Revenue with respect to the Former Member’s
Carried Interest Percentage distributed prior to the Cessation Event and only
to that portion of the LLC’s distributions of Carried
Interest Revenue distributed following the Cessation Event that corresponds to
the Former Member’s vested Carried Interest Percentage (as determined pursuant
to Section 6.2 below) subject to the right of the LLC to elect to purchase
such vested Carried Interest Percentage for a period of one-hundred and eighty
(180) days beginning on the date of the Cessation Event.  The price for such vested Carried Interest
Percentage (determined as of the date the LLC notifies the Former Member of its
election to purchase such Carried Interest Percentage) will equal the Former
Member’s Estimated Value Capital Account attributable to such vested Carried
Interest Percentage and his or her unvested Carried Interest Percentage will be
forfeited to the LLC without any consideration being paid therefor.

 

(d)           With
respect to a Former Member that is removed without Cause or leaves for Good
Reason, the Carried Interest Percentage held by the Former Member, if any,
shall thereafter be deemed to equal only the vested portion of such Carried
Interest Percentage (provided that pursuant to Section 6.2, if a Former
Member is removed without Cause or leaves for Good Reason on or before the
first anniversary of any Change in Control, vesting shall be accelerated), and
the Former Member shall be entitled to 100% of the LLC’s distributions of
Carried Interest Revenue with respect to the Former Member’s Carried Interest
Percentage distributed prior to the Cessation Event and only to that portion of
the LLC’s distributions of Carried Interest Revenue distributed after the
Cessation Event that corresponds to the Former Member’s vested Carried Interest
Percentage (as determined pursuant to Section 6.2 below) subject to the
right of the LLC to elect to purchase such vested Carried Interest Percentage
for a period of one-hundred and eighty (180) days beginning on the date of the
Cessation Event. The price for such vested Carried Interest Percentage
(determined as of the date the LLC notifies the Former Member of its election
to purchase such Carried Interest Percentage) will equal the Former Member’s
Estimated Value Capital Account attributable to such vested Carried Interest
Percentage and his or her unvested Carried Interest Percentage will be
forfeited to the LLC without any consideration being paid therefor.

 

(e)           Notwithstanding
anything to the contrary above, upon the death, permanent disability or
retirement of a Member or its Reference Employee, the Carried Interest
Percentage held by the such Former Member, if any, shall thereafter be deemed
to equal only the vested portion of such Carried Interest Percentage and the
Former Member shall be entitled to 100% of the LLC’s distributions of Carried
Interest Revenue with respect to the Former Member’s Carried Interest
Percentage distributed prior to the Cessation Event and only to that portion of
the LLC’s distributions of Carried Interest Revenue distributed after the
Cessation 

 

20

 

Event that corresponds to the Former
Member’s vested Carried Interest Percentage (as determined pursuant to Section 6.2
below) subject to the right of the LLC to elect to purchase such vested Carried
Interest Percentage for a period of one-hundred and eighty (180) days beginning
on the date of the Cessation Event. The price for such vested Carried Interest
Percentage (determined as of the date the LLC notifies the Former Member of its
election to purchase such Carried Interest Percentage) will equal the Former
Member’s Estimated Value Capital Account attributable to such vested Carried
Interest Percentage and his or her unvested Carried Interest Percentage will be
forfeited to the LLC without any consideration being paid therefor.

 

(f)            In the
event that the vested portion of a Former Member’s Carried Interest Percentage
is forfeited pursuant to Section 6.1, then such Former Member shall
immediately cease to be entitled to receive any Carried Interest Distributions,
and such Former Member shall continue to be liable to make all repayments
required pursuant to the terms of this Agreement, including, without
limitation, any repayment required pursuant to Section 4.1.

 

6.2                                 Vesting.

 

Twenty percent (20%) of each Employee Member’s Carried
Interest Percentage shall vest on each anniversary of the date on which the
Carried Interest Percentage is granted (the “Commencement
Date”) set forth on Schedule A for a period of not more than
five (5) years from such Commencement Date for such Employee Member or its
Reference Employee, subject to the cessation of vesting described in Section 6.1.  Accordingly, (i) if no Cessation Event
has occurred at any time prior to the first anniversary of the Commencement
Date, an Employee Member’s Carried Interest Percentage shall be twenty percent
(20%) vested as of such first anniversary date; (ii) if no Cessation Event
has occurred at any time prior to the second anniversary of the Commencement
Date, an Employee Member’s Carried Interest Percentage shall be forty percent
(40%) vested as of such second anniversary; (iii) if no Cessation Event
has occurred at any time prior to the third anniversary of the Commencement
Date, an Employee Member’s Carried Interest Percentage shall be sixty percent
(60%) vested as of such third anniversary date; (iv) if no Cessation Event
has occurred at any time prior to the fourth anniversary of the Commencement
Date, an Employee Member’s Carried Interest Percentage shall be eighty percent
(80%) vested as of such fourth anniversary date; and (v) if no Cessation
Event has occurred at any time prior to the fifth anniversary of the
Commencement Date, an Employee Member’s Carried Interest Percentage shall be
one-hundred percent (100%) vested as of such fifth anniversary date.  For purposes of the foregoing sentence, the
percentage of each Employee Member’s Carried Interest Percentage that is vested
at any given time shall be subject to the cessation of vesting and forfeiture
of vested and unvested portions of the Carried Interest Percentages set forth
in Article 6.  The Commencement Date
of each initial Employee Member admitted as of the Effective Date shall be the
Effective Date.  Schedule A
attached hereto shall be updated upon the admission of any subsequent Employee
Member to reflect the Commencement Date of such subsequent Employee Member or
its Reference Employee. Notwithstanding the foregoing, (i) the Managing
Member and any Employee Member may mutually agree to a different vesting schedule,
in which case such vesting schedule shall be set forth on Schedule A for
such Employee Member; (ii) from time to time, the Managing Member, in its
sole and absolute discretion, may accelerate the vesting of any Employee Member’s
Carried Interest Percentage, (iii) upon the dissolution and liquidation of
the LLC pursuant to

 

21

 

Article 9, the Carried Interest Percentage of each Employee Member
shall automatically be deemed to be fully vested at that time for all purposes
and (iv) in the event that an Employee Member leaves for Good Reason or is
removed without Cause on or before the first anniversary of a Change in
Control, then the vesting of such Former Member’s Carried Interest Percentage
shall accelerate, and all the Carried Interest Percentage of such Former Member
shall automatically be deemed to be fully vested at that time for all purposes.

 

7.                                      Transfers of
Limited LLC Interests; Withdrawal

 

7.1                                 Assignability of Interests.

 

(a)                                  Except as specifically provided in this
Agreement, no Employee Member or its Reference Employee will be required to
involuntarily transfer any interest in the LLC, Capital Interest Percentage or
Capital Commitment Percentage.  Except as
specifically provided by this Agreement, each Employee Member or its Reference
Employee agrees that he, she, it will not directly or indirectly, offer,
transfer, sell, assign, pledge, hypothecate, or otherwise dispose of (any of
the foregoing acts being referred to here in as a “transfer”), any interest in
the LLC, Carried Interest Percentage or Capital Commitment Percentage otherwise
acquired and/or held by the Employee Member or its Reference Employee, at any
time; provided however, that with the prior consent of the Managing Member,
which may not be unreasonably withheld, the Employee Member or its Reference
Employee may transfer its interests in the LLC, Carried Interest Percentage or
Capital Commitment Percentage during such time pursuant to one of the following
exceptions:

 

(i)                                     the right of the Managing Member and/or
the Company Controlled Member to repurchase or re-issue interests in the LLC,
Carried Interest Percentage or Capital Commitment Percentage pursuant to the
provisions of this Agreement; including, but not limited to, transfers to
Employee Members or Reference Employees of interests which have been
transferred to the Company Controlled Member pursuant to Article 6;

 

(ii)                                  a transfer upon death or Permanent
Disability (as defined in the Stockholder’s Agreement) of the Employee Member
or its Reference Employee or a transfer to the executors, administrators,
testamentary trustees, legatees or beneficiaries of a person who has become a
Employee Member or its Reference Employee in accordance with the terms of this
Agreement; provided that it is expressly understood that any such transferee
shall be bound by the provisions of this Agreement;

 

(iii)                               a transfer made after the Effective Date in compliance
with the federal securities laws to a trust of the Employee Member or its
Reference Employee or to any of the Family Members (as defined in the
Stockholder’s Agreement) of such Employee Member, its Reference Employee or
another beneficiary approved by the Managing Member in its sole discretion;
provided that such transfer is made expressly subject to this Agreement and
that the transferee agrees in writing to be bound by the terms and conditions
hereof;

 

22

 

(iv)                              a sale of the interests in the LLC
pursuant to an effective registration statement filed under the Act by the LLC;
or

 

(v)                                 transfers permitted by the Managing
Member.

 

(b)                                 No transfer of any interests in the LLC,
Carried Interest Percentage, or Capital Commitment Percentage in violation
hereof shall be made or recorded on the books of the LLC and any such transfer
shall be void ab initio and of no effect.  No Assignment shall be binding upon the LLC until the Managing
Member receives an executed copy of such Assignment, which shall be in form and
substance satisfactory to the Managing Member, in its sole and absolute
discretion.

 

(c)                                  The President
shall have the opportunity to recommend to the Managing Member transfers of Class B
Limited LLC Interests from the Company Controlled Member to Employee Members;
provided, however, that notwithstanding anything to the contrary herein, any
transfer will be at the sole discretion of the Managing Member.

 

7.2                                 Substitute Members. 
Any Person that acquires an interest in the LLC by Assignment from
another Member in accordance with the provisions of Section 7.1, other
than a permitted assignee, may only be admitted to the LLC as a substitute
Member with the consent of the Managing Member, in its sole and absolute
discretion.  The admission of an assignee
as a substitute Member shall in all events be conditioned upon the assignee’s
written assumption, in form and substance satisfactory to the Managing Member,
in its sole and absolute discretion, of all obligations of the assigning Member
and the execution of an instrument satisfactory to the Managing Member whereby
such assignee becomes a party to this Agreement as a Member.  Notwithstanding the Assignment of all or any
portion of its interest in the LLC or the admission of an assignee as a
substitute Member, the assignor shall continue to be liable with respect to its
Capital Commitment and all other payment, repayment and contribution
obligations, if any, relating to the interest in the LLC so assigned,
including, without limitation, repayment obligations under Sections 4.1 and
6.1. All costs, including, without limitation, filing fees and reasonable
attorneys’ fees, incurred by the LLC in connection with the admission to the LLC
of a substitute Member shall be borne by the transferor Member, unless the
Managing Member determines otherwise.

 

7.3                                 Legal Representatives. 
In the event any Member shall be adjudicated bankrupt or be deemed
insolvent, or in the event of the winding up or liquidation of a Member (such
Member, a “Disabled Member”), then (a) the
legal representative of the Disabled Member
shall notify the Managing Member in writing of the happening of any of such events and (b) the
Managing Member shall be entitled to acquire all or a portion of the Disabled
Member’s interest in the LLC or to offer all or a portion of the Disabled
Member’s interest in the LLC to the other Members.  The aggregate consideration payable to
the Disabled Member (or its legal representative) shall be a cash payment in an
amount equal to the portion of the Disabled Member’s Estimated Value Capital
Account that corresponds to the Disabled Member’s interest in the LLC acquired
pursuant to the preceding sentence.  Each
Member that acquires all or a portion of the Disabled Member’s interest in the
LLC shall be obligated, severally and not jointly, to pay its pro rata portion of such aggregate
consideration based on the percentage of the Disabled Member’s interest in the
LLC acquired by such Member as compared to the percentage

 

23

 

of the Disabled
Member’s interest in the LLC acquired by all Members.  Any Member that acquires all or a portion of
a Disabled Member’s interest in the LLC shall also assume the portion of the
Disabled Member’s Capital Commitment, if any, corresponding to the acquired
portion of the interest in the LLC and shall pay to the LLC, concurrently with
the payment of the purchase price to the Disabled Member (or its legal
representative), an amount representing the portion, if any, of the Disabled
Member’s Capital Commitment that is then due and unpaid that corresponds to the
acquired portion of the interest in the LLC of the Disabled Member.  Except for the payment described in the immediately
preceding sentence, in no event shall the acquisition of all or a portion of a
Disabled Member’s interest in the LLC by a Member constitute a Capital
Contribution of such Member.  In the
event that the Members collectively acquire less than all of the interest in
the LLC of the Disabled Member, the legal representative of such Disabled
Member shall become an assignee with respect
to such portion of the Disabled Member’s
interest in the LLC that is not acquired by the Members pursuant to this
Section 7.3, subject to all of the terms of this Agreement as then in
effect.

 

7.4                                 Obligations of Assignee.  Any assignee of the interest in the LLC of a Member in the LLC, irrespective of whether
such assignee has accepted and adopted in writing the terms and provisions of
this Agreement, shall be deemed by the acceptance of such Assignment (a) to
have agreed to be subject to the terms and provisions of this Agreement in the
same manner as its assignor and (b) to
have assumed the assignor’s Capital Commitment and other payment obligations,
if any, pursuant to this Agreement with respect to the interest in the LLC assigned.

 

7.5                                 Additional Requirements. 
Notwithstanding the foregoing, as additional conditions to the validity
of any Assignment or transfer of a Member’s interest in the LLC in the LLC,
such Assignment or transfer shall not:

 

(a)                                  violate the registration provisions of
the Securities Act or the securities laws of
any applicable jurisdiction;

 

(b)                                 cause the LLC or the Fund not to be
entitled to the exemption from registration
as an “investment company” pursuant to the Investment Company Act;

 

(c)                                  result in the termination of the LLC or
the Fund under the Code (unless otherwise determined by the Managing Member in
its sole and absolute discretion);

 

(d)                                 cause the LLC or the Fund to be taxed as
a corporation under the “publicly traded partnership” rules in Section 7704
of the Code;

 

(e)                                  violate any provisions of the Fund GP
Agreement or the Fund Agreement; or

 

(f)                                    cause any subsidiary of the Fund that
elects to be a real estate investment trust under the Code (a “REIT”) to fail to qualify as a REIT.

 

The Managing
Member may require reasonable evidence as to the foregoing, including, without
limitation, a favorable opinion in writing and in form and substance reasonably
satisfactory to the Managing Member, signed by legal counsel reasonably
satisfactory to the

 

24

 

Managing Member.  Any Assignment
or transfer that violates the conditions of this Section 7.5 shall be null
and void ab initio.

 

7.6                                 Allocation of Distributions Between
Assignor and Assignee.  Upon the Assignment of an
interest in the LLC pursuant to this Article  7, distributions
pursuant to Article 5 shall be made to the Person owning the interest in
the LLC at the date of distribution, unless the assignor and assignee otherwise
agree and direct the Managing Member in a written statement signed by both the
assignor and the assignee.

 

7.7                                 Death or Incapacity of a Member. 
Subject to Section 6.2, notwithstanding anything herein to the
contrary, upon the death or incapacity of a Employee Member, such Employee
Member’s interests in the LLC shall be immediately assigned to the legal
representative of such Employee Member. 
Irrespective of whether such
legal representative has accepted and adopted in writing the terms and
provisions of this Agreement, such legal representative shall be deemed by the
acceptance of such assignment (a) to have agreed to be subject to the
terms and provisions of this Agreement in the same manner as its assignor and (b) to have assumed the assignor’s Capital
Commitment and other payment obligations, if any, pursuant to this Agreement
with respect to the interest in the LLC assigned.

 

7.8                                 Pledged Interest. 
In the event that the Managing Member consents to any pledge of or
encumbrance on all or any part of a Member’s interest in the LLC (such interest
which is subject to a pledge or encumbrance is referred to as the “Pledged
Interest”), then upon the occurrence of an “Event of Default”
by such Member under the document creating the pledge or encumbrance or upon
such Member becoming a “Defaulting Member” under this Agreement (i) the
Managing Member may elect to cause the LLC to accept an assignment of the
Pledged Interest subject to such pledge or encumbrance, and the LLC must accept
such assignment unless the Managing Member, in its sole and absolute
discretion, declines to accept such assignment); and (ii) if the LLC
accepts such assignment of the Pledged Interest, the LLC shall automatically
assume the obligation(s) secured by the pledge of or encumbrance on the
Pledged Interest, provided that (a) recourse
on the obligation(s) secured by the pledge of or encumbrance on the
Pledged Interest is and shall be limited only to the value of the Pledged
Interest (even if such interest is effectively distributed to all of the
Members and even if such value fluctuates from time to time); and (b) neither
the LLC, nor any asset of the LLC (other than the value of the Pledged
Interest), shall be personally liable, responsible or subject to execution for
such obligation(s).

 

7.9                                 Withdrawal of a Member. 
No Member may withdraw from the LLC without the prior written consent of
the Managing Member, which consent may be withheld in its sole and absolute
discretion.  A Member that withdraws
pursuant to this Section 7.9 shall cease to have any rights under this
Agreement or with respect to the LLC.

 

8.                                      Admission of Members

 

New Members may be
admitted to the LLC only in connection with transfers of interests made in
accordance with Article 7 of this Agreement.  Any new Members shall execute a counterpart
to this Agreement and such other instruments as the Managing Member may deem

 

25

 

necessary or appropriate to confirm the undertaking of such new Member
to be bound by all the terms and provisions of this Agreement.  The Managing Member shall revise the
applicable page of Schedule A as necessary to reflect such
admission.

 

9.                                      Rights and
Obligations of the Members

 

9.1                                 Limited Liability.

 

(a)                                  A Member that receives the return of any
part of its Capital Contribution shall be personally liable to the LLC for the
amount of its Capital Contribution so returned to the extent, and only to the
extent, provided by the Act or other applicable law, except as otherwise
specifically provided in this Agreement. 
Except as provided in this Agreement or the Act, the Members shall not
otherwise be liable to the LLC for the repayment, satisfaction, or discharge of
the LLC’s debts, liabilities or obligations. 
Except as provided in this Agreement, including,
without limitation, Section 4.2 no Member shall have any obligation to
contribute money in excess of such Member’s Capital Commitment.  No Member shall be personally liable to any
third party for any liability or other obligation of the LLC.

 

(b)                                 To the extent required by the Act or
other applicable law, a Member may, under certain circumstances, be required to
return amounts previously wrongfully distributed to such Member.  It is the intent of the LLC that, in
connection with any distribution to any Member, except as provided in Section 9.1(a) or
this Section 9.1(b) or under the Act or other applicable law, no
Member shall be obligated to pay or return any such amount to, or for the account
of, the LLC or any creditor of the LLC. 
The payment of any such money or distribution of any such property to a
Member, whether or not deemed to be a return of Capital Contributions, shall be
deemed to be a compromise within the meaning of Section 17-502(b) of
the Act and, to the fullest extent permitted by law, the Member receiving any
such money or property shall not be required to return any such money or
property to the LLC or any creditor of the LLC. 
However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Member is obligated to
make any such payment, such obligation shall be the obligation of such Member
and not of the LLC or the Managing Member.

 

9.2                                 Authority of Employee and Company Controlled
Members.  The Members shall not participate in, or take
part in the control of, the management of the LLC or its business and affairs
and shall not have any power or authority to act for or bind the LLC.  The exercise by any Member of any right conferred
herein shall not be construed to constitute participation by such Member in the
control of the business of the LLC so as to make such Member liable as a
general partner for the debts and obligations of the LLC for purposes of the
Act.

 

9.3                                 Voting Rights of Members.

 

(a)                                  Voting Rights of Class A Members. 
Notwithstanding anything to the contrary herein, each Class A
Member shall be entitled to exercise its voting rights otherwise granted to
such Class A Member under this Agreement and subject to vote by the
limited partners of the Fund.

 

26

 

(b)                                 No Voting by Class B Members.  Class B
Members shall not be entitled to exercise any voting rights in respect of any
matters of this Agreement, the LLC or the Fund.

 

9.4                                 General Release. 
Each Member, jointly and severally, hereby agrees to release each of the
Managing Member, the LLC, the Fund GP, the Fund, the Company Controlled Member,
their Affiliates and any of their respective principals, heirs, executors, administrators,
partners, members, stockholders, employees, employers, officers, directors,
managers, agents, advisors, successors or assigns (“Released
Parties”) against all losses, liabilities, damages and expenses
incurred by any Member as a result of any actions or omissions taken or omitted
by each of the Released Parties in connection with providing services to the
LLC or the performance of the Managing Member’s duties under this Agreement or
by reason of any action or omission taken or omitted on behalf of the LLC.  Such release shall cover, without implied
limitation, any past or present claims by any Member relating to each of
Released Parties or the employees of Released Parties with respect to such
employee(s)’ employment as of the date hereof, the limited partner interests
described herein and the activities of any of the Released Parties.

 

9.5                                 Confidentiality.

 

(a)                                  All information relating to the LLC, the
Managing Member, the Fund, the Fund GP, any subsidiary or Affiliate of any of
the foregoing or any Investment or the business or operations of the Managing
Member, the LLC, the Fund, the Fund GP or any subsidiary or Affiliate of any of
the foregoing (including, without limitation, processes, plans, data, reports,
drawings, documents, business secrets, financial information or information of
any other kind) received by any Employee Member (“Confidential
Information”) shall be received and maintained in confidence by such
Employee Member.

 

(b)                                 Confidential Information may be used by
Employee Members or their Reference Employees only for the purpose of
monitoring their investments in the LLC (the “Permitted
Purpose”).  The Employee
Members and their Reference Employees agree that they will not use any
Confidential Information for any other purpose, including, without limitation,
use in conducting or furthering their own business or that of any Affiliates or
any competing business.

 

(c)                                  The obligations of limited use and
nondisclosure contained in this Section 9.5 will not (i) restrict the
disclosure of Confidential Information to an Employee Member or Reference
Employee’s attorneys, tax advisors, accountants or other professional advisors
or consultants who have a reason to have access to such Confidential
Information in connection with their duties and responsibilities to such
Employee Member or its Reference Employee relating to the Permitted Purpose (so
long as such Persons are under an obligation of confidentiality consistent with
the terms of this Section 9.5), (ii) restrict the disclosure of
Confidential Information by an Employee Member or its Reference Employee to the
extent such disclosure is required by any governmental or regulatory authority
or court entitled by law to such disclosure, or that is required by law to be
disclosed, provided that such Employee Member or its Reference Employee
promptly notifies the Managing Member when such requirement to disclose arises
to enable the Managing Member to seek an appropriate protective order and to
make known to such governmental or regulatory authority or court the
proprietary nature of the 

 

27

 

Confidential Information
and to make any applicable claim of confidentiality in respect thereof, and
provided, further, that such party shall only make such disclosure to the
extent it is required to do so by law; or (iii) apply to information that (x) was
publicly known or otherwise known to an Employee Member or its Reference
Employee prior to the time it was disclosed pursuant to this Agreement and was
not otherwise subject to any restriction on disclosure by such Employee Member
or its Reference Employee, (y) subsequently becomes publicly known through
no act or omission by an Employee Member, its Reference Employee or any person
acting on an Employee Member or its Reference Employee’s behalf, or (z) otherwise
becomes known to a Employee Member or its Reference Employee without breach of
this Agreement (other than through disclosure by the LLC or the Managing
Member) or any other contractual, legal, or fiduciary obligation and is not
otherwise subject to any restriction on disclosure by such Employee Member or
its Reference Employee.  Each Employee
Member or its Reference Employee agrees (A) to cooperate in any
appropriate action that the Managing Member may decide to take to prevent or
minimize the disclosure of such Confidential Information; (B) upon the
request of the Managing Member, to immediately return, delete or destroy all
Confidential Information, including all copies or derivations thereof, held by
such Employee Member or its Reference Employee; and (C) that the
misappropriation or unauthorized disclosure of Confidential Information by a
Employee Member or its Reference Employee is likely to cause substantial and
irreparable damage to the LLC, the Fund GP and/or the Fund such that damages
may not be an adequate remedy for breach of this Section 9.5; accordingly,
the LLC, the Fund GP and the Fund shall be entitled to injunctive and other
equitable relief, in addition to all other remedies available to them at law or
at equity, and no proof of special damages shall be necessary for the
enforcement of this Section 9.5.

 

(d)                                 The provisions of this Section 9.5
shall survive the termination of the employment of the Employee Member or its
Reference Employee with his or her employer.

 

9.6                                 Non-Disparagement. 
Each Employee Member or its Reference Employee hereby agrees that he or
she shall not disparage the LLC, Managing Member, the LLC, the Fund, the Fund
GP, any subsidiary or Affiliate of any of the foregoing.  For purposes of this provision, the term “disparage”
includes making comments or statements by the Employee Member or Reference
Employee to third parties, including the press, media or to any clients or
employees, prospective client or any other Person with whom the LLC, the
Managing Member, the Fund, the Fund GP, any subsidiary or Affiliate has or is
seeking a business or professional relationship, that would have an adverse
impact on the business or business reputation of the LLC, the Managing Member,
the Fund, the Fund GP, any subsidiary or Affiliate of any of the foregoing or
any executives, officers, principals, owners, partners, members, directors,
agents, employees, consultants, contractors and/or trustees thereof.  The provisions of this Section 9.6 shall
survive the termination of the employment of the Employee Member or its
Reference Employee with his or her employer.

 

9.7                                 No Right to Continued Employment. 
Subject to the rights, if any, of an Employee Member or Reference
Employee under a separate contract of employment, the employment of any
Employee Member or Reference Employee may be terminated, either with or without
cause, by Capmark Financial Group Inc., the LLC, the Managing Member, the Fund,
the Fund GP, any subsidiary or Affiliate of any of the foregoing at any
time.  Nothing contained in this
Agreement shall constitute a continued right of a Employee Member or its
Reference Employee’s 

 

28

 

employment with
the LLC, the Managing Member, the Fund, the Fund GP, any subsidiary or
Affiliate of any of the foregoing.

 

10.                               Duration and
Termination of the LLC

 

10.1                           Duration and Dissolution. 
The LLC shall continue until the earliest of (a) the date on which
the Managing Member and the Employee Members holding the majority of the
Carried Interest Percentage then held by all Employee Members elect to dissolve
the LLC, (b) six (6) months after the date on which the Fund has been
dissolved and completely liquidated in accordance with the Fund Agreements, and
(c) the entry of a decree of judicial dissolution pursuant to the Act.

 

10.2                           Bankruptcy of Member. 
The bankruptcy, insolvency, dissolution, or liquidation of, or the
making of an Assignment for the benefit of creditors by, or any other act or
circumstance with respect to, a Member shall not cause the dissolution or
termination of the LLC.

 

10.3                           Effect of Admission or Withdrawal of
Member.  In the event that a new Member is admitted to
the LLC or if any Member shall withdraw, die, be declared incompetent or insane,
or be adjudicated a bankrupt, or in the event of the winding up or liquidation
of a Member, such event shall not cause the dissolution or termination of the
LLC.

 

11.                               Liquidation of
the LLC

 

11.1                           General.  Upon the
dissolution of the LLC, the LLC shall be liquidated in accordance with this Article 11
and the Act.  The dissolution,
liquidation and termination shall be conducted and supervised by the Managing
Member (being referred to herein as the “Liquidating
Agent”).  The Liquidating
Agent shall have all of the rights, powers, and authority with respect to the
assets and liabilities of the LLC in connection with the dissolution,
liquidation and termination of the LLC that the Managing Member has with
respect to the assets and liabilities of the LLC during the term of the LLC,
and the Liquidating Agent is hereby expressly authorized and empowered to
execute any and all documents necessary or desirable to effectuate the
liquidation of the LLC and the transfer of any assets or liabilities of the
LLC.  The Liquidating Agent shall have
the right from time to time, by revocable powers of attorney, to delegate to
one or more Persons any or all of such rights and powers and such authority and
power to execute documents and, in connection therewith, to fix the reasonable
compensation of each such Person, which compensation shall be charged as an
expense of liquidation.  The Liquidating
Agent shall liquidate the LLC as promptly as shall be practicable after the
dissolution of the LLC’s term, consistent with realizing the value of LLC
assets.  Without limiting the rights,
powers, and authority of the Liquidating Agent as provided in this Section 11.1,
any LLC asset that the Liquidating Agent may sell shall be sold at such price
and on such terms as the Liquidating Agent may, in its sole and absolute
discretion, deem appropriate.

 

29

 

11.2                           Priority on Liquidation; Distributions. 
The proceeds of liquidation shall be applied in the following order of
priority:

 

(a)                                  To pay the costs and expenses of the
dissolution and liquidation;

 

(b)                                 To pay matured debts and liabilities of
the LLC to all creditors of the LLC (including, without limitation, any
liability to any Member);

 

(c)                                  To establish any reserves which the
Liquidating Agent may deem necessary or advisable for any contingent or
unmatured liability of the LLC potentially owing to all Persons who are not
Members;

 

(d)                                 To establish any reserves which the
Liquidating Agent may deem necessary or advisable for any contingent or
unmatured liability of the LLC potentially owing to the Members; and

 

(e)                                  The balance, if any, to the Members in
accordance with Section 5.1(a).

 

11.3                           Orderly Liquidation. 
A reasonable time shall be allowed for the orderly liquidation of the
assets of the LLC and the discharge of liabilities so as to minimize the losses
normally attendant upon a liquidation and to maximize the value of such
assets.  The Liquidating Agent shall,
however, if possible to do so in a manner consistent with the preceding sentence,
dispose of all LLC assets (other than reserves) and effect distributions to the
Members within one hundred and eighty (180) days after the date of dissolution
of the LLC.

 

11.4                           Source of Distributions. 
The Managing Member shall not be liable out of its own assets for the
return of the Capital Contributions of the Members, it being expressly
understood that any such return shall be made solely from the LLC’s assets
pursuant to this Agreement.

 

11.5                           Statements on Termination. 
Upon the completion of the liquidation of the LLC, each Member shall be
furnished with a statement which shall set forth the assets and liabilities of
the LLC as at the date of complete liquidation and each Member’s share
thereof.  Upon completion of the
liquidation of the LLC pursuant to this Article 11, the Members shall
cease to be such and the Liquidating Agent shall execute, acknowledge, and
cause to be filed a certificate of cancellation of the LLC.

 

12.                               Books and
Records; Tax Matters

 

12.1                           Books and Accounts. 
Complete and accurate books and accounts shall be kept and maintained
for the LLC at its principal place of business (or such other location as
established by the Managing Member from time to time).  Such books and accounts shall be kept in
accordance with generally accepted accounting principles consistently applied,  the provisions  of Sections
5.2 and 5.3 and on such other basis, if any, as the Managing Member determines
is necessary to properly reflect the operations of the LLC.  Each Member or its duly authorized representative,
at its own expense, shall at all reasonable times have access to, and may
inspect and make copies of, such books and accounts of the LLC upon reasonable
prior written notice to

 

30

 

the Managing Member,
for any purpose reasonably related to the Member’s interest as a Member.

 

12.2                           Records Available. 
The Managing Member shall maintain at the LLC’s principal office the
following documents: (i) a current list of the full name and last known
business address of each Member, (ii) a copy of the Certificate (iii) copies
of all of the LLC’s federal, state and local income tax returns for the three
most recent Fiscal Years, and (iv) copies of this Agreement and all
amendments thereto.  Such documents are subject
to inspection and copying at the reasonable request and at the expense of any
Member during ordinary business hours upon reasonable prior notice to the
Managing Member, for any purpose reasonably related to the Member’s interest as
a Member.  Except to the extent requested
by a Member, the Managing Member shall have no obligation to deliver or mail a
copy of the LLC’s Certificate to the Members.

 

12.3                           Tax Matters Member; Filing of Returns.

 

(a)                                  The Managing Member shall be the “tax
matters partner” of the LLC and shall, at the LLC’s expense, cause to be
prepared and timely filed after the end of each Fiscal Year of the LLC all
Federal and state income tax returns required of the LLC for such Fiscal Year.

 

(b)                                 The LLC shall use reasonable efforts to
deliver to each Member a Form K-1 within ninety (90) days after the end of
each Fiscal Year or as soon thereafter as practicable.

 

12.4                           Fiscal Year. 
The fiscal year (the “Fiscal Year”)
of the LLC shall be the same as its taxable year and shall be the period ending
on December 31 of each year, or such other period as required by the Code
or as the Managing Member may designate as the taxable year of the LLC,
consistent with the requirements of the Code.

 

12.5                           Tax Consequences to U.S. Taxpayers.

 

(a)                                  Each Member hereby agrees that such
Member has reviewed with its own tax advisors the tax consequences of this
Agreement and the acquisition of any interest in the LLC.  Such Member is relying solely on such
advisors and not on any statements or representations of the LLC or any of its
Affiliates or of their agents or representatives.  Such Member understands that he, she or it
(and not the LLC) shall be responsible for his, her or its own tax liability
that may arise as a result of the transactions contemplated by this Agreement.

 

(b)                                 Such Member has consulted such legal,
financial, technical or other experts as he, she or it deems necessary or
desirable before entering into this Agreement. 
Such Member has read, understands and agrees with the terms and
conditions of this Agreement.  Such
Member has not relied upon any oral or written representations of the LLC or
any of its Affiliates, agents or representatives in entering into this
Agreement.  Such Member acknowledges the
risks of his, her or its undertakings under this Agreement and its assumption
of such risks.

 

(c)                                  ELECTION UNDER CODE SECTION 83(b).  EACH MEMBER HEREBY ACKNOWLEDGES THAT IT IS
HIS, HER OR ITS SOLE RESPONSIBILITY AND

 

31

 

NOT THE RESPONSIBILITY OF
THE LLC OR THE LLC’S AGENTS OR REPRESENTATIVES TO FILE WITHIN THIRTY (30)
CALENDAR DAYS FROM THE DATE OF ANY GRANT ANY ELECTION UNDER INTERNAL REVENUE
CODE SECTION 83(b) THAT SUCH MEMBER DESIRES TO FILE WITH RESPECT TO
ITS INTEREST IN THE LLC, EVEN IF SUCH MEMBER REQUESTS THE LLC, OR ITS AGENTS OR
REPRESENTATIVES, TO MAKE THIS FILING ON SUCH MEMBER’S BEHALF.

 

13.                               Power of
Attorney

 

13.1                           General.

 

(a)                                  Each Member irrevocably constitutes and
appoints the Managing Member and each partner of the Managing Member and each
Liquidating Agent the true and lawful attorney-in-fact of such Member to
execute, acknowledge, swear to and file any of the following:

 

(i)                                     The Certificate, and any amendment to or
certificate of cancellation of the Certificate, for the LLC pursuant to the
Act, provided, that no such certificate or amendment shall have the effect of
amending this Agreement;

 

(ii)                                  Any certificate or other instrument (A) which
may be required to be filed by the LLC under the laws of the United States, the
State of Delaware or any other jurisdiction, or (B) which the Managing
Member shall deem necessary to file to effect the winding-up or termination of
the LLC; provided, that no such certificate or instrument shall have the effect
of amending this Agreement; and

 

(iii)                               All other filings with agencies of the federal
government, or any state or local government, or of any other jurisdiction
which the Managing Member considers necessary or desirable to carry out the
purposes of this Agreement and the business of the LLC, provided, that no such
certificate or instrument shall have the effect of amending this Agreement.

 

(b)                                 It is expressly acknowledged by each
Member that the foregoing power of attorney is coupled with an interest and
shall survive death, legal incapacity, bankruptcy, insolvency, Assignment for
the benefit of creditors and Assignment by a Member of its LLC interest;
provided, however, that if a Member shall assign all of its interest in the LLC
and the assignee shall, in accordance with the provisions of this Agreement,
become a substitute Member, such power of attorney shall survive such
Assignment only for the purpose of enabling the Managing Member to execute,
acknowledge, swear to and file any and all instruments necessary to effect such
substitution.

 

32

 

14.                               Compensation of the Managing Member and
LLC Expenses.

 

14.1                           No Compensation. 
The Managing Member shall not be entitled to receive any compensation as
a result of Managing Member acting in such capacity for the LLC.

 

14.2                           LLC Expenses. 
The Managing Member shall bear all LLC expenses and reserves for such
expenses, including the following expenses:

 

(a)                                  all reasonable costs incurred by the
Managing Member, an Affiliate of the Managing Member that are related to the
LLC’s operations, including travel costs, fees and other out-of-pocket expenses
directly related to taxes, fees of auditors, counsel and consultants, custodial
expenses, insurance, litigation expenses, expenses associated with the
preparation and distribution of reports to Members, the costs of any third
parties and any Affiliate of the Managing Member, retained to provide necessary
services relating to the assets held by the LLC, and any extraordinary expenses
related to providing the services required under this Agreement; and

 

(b)                                 all other reasonable expenses not
specifically provided for in this Section 14.2 which are incurred by the
Managing Member or an Affiliate of the Managing Member in connection with
operating the LLC, or performing the duties of the Managing Member under this
Agreement, other than (i) office overhead of the Managing Member or (ii) compensation
of the Managing Member’s employees.

 

To the
extent that expenses to be borne by the Managing Member are paid by the LLC,
the Managing Member shall reimburse the LLC for such expenses.

 

15.                               Miscellaneous

 

15.1                           Further Assurances. 
The Members agree to execute such instruments and documents as may be
required by the Act or by law or which the Managing Member reasonably deems
necessary or appropriate to carry out the intent of this Agreement so long as
they do not alter the rights and obligations of the Members under this
Agreement.

 

15.2                           Successors and Assigns. 
The agreements contained herein shall be binding upon and inure to the
benefit of the permitted successors and assigns of the respective parties
hereto.

 

15.3                           Applicable Law. 
This Agreement shall be governed by, and construed in accordance with,
the Act and judicial interpretations thereof to the extent applicable and
otherwise in accordance with the laws of the State of Delaware.

 

15.4                           Severability. 
If any one or more of the provisions contained in this Agreement, or any
application thereof, shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and all other applications thereof shall not in any way be affected or
impaired thereby, unless the absence of the invalid, illegal or unenforceable
provision would materially affect the respective interests of the Members, in
which case the Members shall use their best efforts to make such changes or 

 

33

 

adjustments in
this Agreement as would restore the respective economic interests of the Members
as originally contemplated hereby.

 

15.5                           Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original of this Agreement binding on the parties
hereto.

 

15.6                           Entire Agreement. 
This Agreement, including, without limitation, Schedule A
hereto as modified from time to time, represents the entire agreement among the
parties hereto with respect to the subject matter hereof.

 

15.7                           Amendment.  The Managing
Member may amend, modify or waive any provision of this Agreement at any time,
in its reasonable discretion, without the consent of any Member; provided, however, that no such
amendment, modification or waiver shall, except as otherwise specifically
permitted by this Agreement, (i) increase any Member’s Capital Commitment
or the liability of any Member under this Agreement for the obligations of the
LLC, or (ii) except as specifically permitted by this Agreement, reduce
the Carried Interest Percentage of any Class B Member or the Capital
Commitment Percentage of any Class A Member, without, in each case, such
Member’s written consent.  No amendment,
modification or waiver of any provision of this Agreement may be made without
the prior written consent of the Managing Member.  The Managing Member shall provide written
notice to all Members of any amendment, modification or waiver of any provision
of this Agreement.

 

15.8                           Construction. 
The captions used herein are intended for convenience of reference only,
and shall not modify or affect in any manner the meaning or interpretation of
any of the provisions of this Agreement. 
As used herein, the singular shall include the plural, the masculine
gender shall include the feminine and neuter, and the neuter gender shall include
the masculine and feminine, unless the context otherwise requires.  The words “hereof”, “herein”, and “hereunder”,
and words of similar import, when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.

 

15.9                           Force Majeure. 
Whenever any act or thing is required of the LLC or the Managing Member
hereunder to be done within any specified period of time, the LLC or the
Managing Member, as the case may be, shall be entitled to such additional
period of time to do such act or thing as shall equal any period of delay
resulting from causes beyond the reasonable control of the LLC or the Managing
Member, as the case may be, including, without limitation, bank holidays,
actions of governmental agencies, and financial crises of a nature materially
affecting the purchase and sale of securities; provided, that this provision
shall not have the effect of relieving the LLC or the Managing Member from the
obligation to perform any such act or thing.

 

15.10                     Notices.  All notices,
demands, solicitations of consent or approval, and other communications
hereunder shall be in writing and shall be sufficiently given if personally
delivered, transmitted by facsimile, sent by electronic transmission or sent
postage prepaid by overnight courier or registered or certified mail, return
receipt requested, addressed as follows: if intended for the LLC or the
Managing Member, to the LLC’s principal office determined pursuant to Section 2.4
hereof, and if intended for any Member to the address of such Member set forth
on its Member Signature Page, or to such other address as such Member may
designate

 

34

 

from time to time
by written notice.  Notices shall be
deemed to have been given when personally delivered or when transmitted on a
Business Day by electronic transmission with confirmation of receipt or by
facsimile with machine-generated confirmation of transmission without notation
of error, if sent before 5:00 p.m. local time of the recipient, otherwise
the following Business Day, or, if mailed or sent by overnight courier, on the
date on which received.  The provisions
of this Section 15.10 shall not prohibit the giving of written notice
in any other manner; provided that any such written notice shall be deemed
given only when actually received.

 

15.11                     No Right of Partition for Redemption. 
No Member and no successor-in-interest to any Member shall have the
right while this Agreement remains in effect to have the property of the LLC
partitioned, or to file a complaint or institute any proceeding at law or in
equity to have the property of the LLC partitioned or, except on such terms and
conditions as the Managing Member may, in its sole and absolute discretion,
approve, to require the redemption of its interest in the LLC.

 

15.12                     Third-Party Beneficiaries. 
The provisions of this Agreement are not intended to be for the benefit
of any creditor or other person to whom any debts or obligations are owed by,
or who may have any claim against, the LLC or any of its Members, except for
Members, in their capacities as such. 
Notwithstanding any contrary provision of this Agreement, no such
creditor or person shall obtain any rights under this Agreement or shall, by
reason of this Agreement, be permitted to make any claim against the LLC or any
Member.

 

15.13                     Managing Member as Member. 
A Managing Member may also be a Member, and in such event its rights,
powers, restrictions and liabilities as a Managing Member shall remain
unaffected, and in addition it shall, in respect of its Capital Contributions
as a Member, have all of the rights and powers and be subject to all of the
restrictions and liabilities of a Member, except as otherwise specified herein.

 

15.14                     Survival.  All
indemnities and reimbursement obligations made pursuant to this Agreement,
including, without limitation, the obligations to make repayments under Section 9.1,
shall survive dissolution and liquidation of the LLC until expiration of the
longest applicable statute of limitations (including extensions and waivers)
with respect to the matter for which a party would be entitled to be
indemnified or reimbursed, as the case may be.

 

[Signature Page Follows]

 

35

 

IN WITNESS
WHEREOF, this Limited Liability Company Agreement has been executed by the
parties as of the date first above written.

 

	
   

  	
  MANAGING MEMBER

  
	
   

  	
   

  
	
   

  	
  Capmark Carried Interest, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEMBERS

  
	
   

  	
   

  
	
   

  	
  See Signature Pages Attached Hereto

  

 

 

SCHEDULE
A

 

LIST
OF SUBSCRIBERS

 

[See attached]

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