Document:

Exhibit 10.25

 

CAPMARK
FINANCIAL GROUP INC.

 

EXECUTIVE

 

DEFERRED COMPENSATION AND STOCK AWARD PLAN

 

 

PURPOSE

 

The purpose of this Capmark Financial Group Inc. Executive Deferred
Compensation and Stock Award Plan is to provide employees of the
Company or any of its Affiliates (as such terms are defined below) who are
determined to be members of a select group of highly compensated employees an opportunity to defer payment of all or a
portion of their Compensation (as defined below) in accordance with the terms
and conditions set forth herein. 

 

ARTICLE I

DEFINITIONS

 

1.1                                 “Affiliate”
means with respect to any Person, any entity directly or indirectly
controlling, controlled by or under common control with such Person.

 

1.2                                 “Board”
means the Board of Directors of the Company.

 

1.3                                 “Bonus
Year” means the 2007 Year.

 

1.4                                 “Change
in Control” means (i) the sale of all or substantially all of the assets of
Investor LLC, the Company, or Capmark Finance Inc. to an Unaffiliated Person;
or (ii) a sale by the Company or Investor LLC, in a single transaction or in a
related series of transactions, of the voting stock of the Company resulting in
more than 50% of the voting stock of the Company being held (either directly or
indirectly through Investor LLC, and which for the avoidance of doubt includes
the distribution of any interests in Investor LLC being distributed to any
limited partners of any Investor, which are not Affiliates of that Investor) by
an Unaffiliated Person; or (iii) a sale by the Company or Investor LLC, in an
unrelated series of transactions, of the voting stock of the Company, as a
result of which an Unaffiliated Person is (either directly or indirectly
through Investor LLC, and which for the avoidance of doubt includes the
distribution of any interests in Investor LLC being distributed to any limited
partners of any Investor, which are not Affiliates of that Investor) the single
largest holder of voting stock of the Company; or (iv) a merger or
consolidation of the Company or Investor LLC into an Unaffiliated Person;  if and only if  any such event (or as a result of any such
event) listed in (i) – (iv) above results in the inability of the Investors and
any of their respective Affiliates, either as a Group or individually (through
Investor LLC or otherwise), to elect a majority of the Board or board of
directors of the resulting entity; provided, however, to the
extent any such event listed in (i) – (iv) above occurs but at such time either
the Investors and their Affiliates as a Group, or any of the Investors or their
respective Affiliates individually (through Investor LLC or otherwise) retain
the ability to elect a majority of the Board or the board of directors of the
resulting entity, a Change of Control shall be deemed to have occurred upon any
later date on which neither the Investors and their respective Affiliates as a
Group nor any of the Investors or their Affiliates individually retain such
ability. For purposes

 

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                                                of
this definition, the term “Unaffiliated Person” means any Person or
Group who is not (x) an Investor or any member of an Investor, (y) an Affiliate
of an Investor or any member of an Investor or (z) an entity in which an
Investor or any member of an Investor holds, directly or indirectly, a majority
of the economic interests. 
Notwithstanding the foregoing, if any of the transactions described in
(i), (ii) or (iv) of the preceding sentence above shall occur and the other
Person or Group involved in such transaction (or its parent entity) is an
Affiliate of any Investor because it is under common control by an ultimate
parent entity, but the day-to-day operations of,
and key business decisions regarding, such Affiliate are controlled by an
entity that is, or individuals who are, principally engaged in a business other
than the management or operations of private equity funds (any such Affiliate,
a “Strategic Business Affiliate”), then the determination of whether a
Change of Control has occurred shall be made by applying the relevant test in
clause (i), (ii) or (iv) above (along with the test of whether the Investors
and their Affiliates as a Group or any of the Investors or their Affiliates
individually (through Investor LLC or otherwise) lose the ability to elect a
majority of the Board) as if the Strategic Business Affiliate was not an
Affiliate of any of the Investors and by treating the voting power of the
Strategic Business Affiliate in the Company (or the resulting entity) as if it
were held by a Person or Group unaffiliated with any of the Investors.

 

1.5                                 “Code”
means the Internal Revenue Code of 1986, as amended.

 

1.6                                 “Committee”
means the Executive Development and Compensation Committee of the Board or such
other committee as may be appointed by the Board to administer this Plan.

 

1.7                                 “Company”
means Capmark Financial Group Inc.

 

1.8                                 “Compensation”
means the annual bonus or incentive compensation earned by an Executive with
respect to employment services performed by the Executive for the Company or
any of its Affiliates in any Year and considered to be “wages” for purposes of
federal income tax withholding. Notwithstanding the forgoing, Compensation
shall not include annual salary, annual bonus or incentive compensation for any
Year in excess of $1,000,000, reimbursements or other expense allowances
(whether or not includable in gross income, and including but not limited to
car allowances), (cash or non-cash) fringe benefits (including but not limited
to contest prizes), moving expenses, welfare benefits (including but not limited
to imputed income on life insurance coverage, unused and/or accrued vacation
pay and severance pay), tax equalization packages or imputed income
attributable to the forgiveness  of
loans. For purposes of this Plan only, Compensation shall be calculated before
reduction for any amounts deferred by the Executive pursuant to the Company’s
tax qualified plans which may be maintained under Section 401(k) or Section 125
of the Code, or pursuant to this Plan or any other non-qualified plan which
permits the voluntary deferral of compensation. 

 

1.9                                 “Executive”
means an employee of the Company or any of its Affiliates who is determined by
the Committee to be a member of a select group of highly compensated employees
who shall be permitted to participate in the Plan.

 

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

 

1.11                           “Fair
Market Value” means, on a per Share basis, (i) if there is a public market for
the Shares on such date, the average of the high and low closing bid prices of
the Shares on such stock exchange on which the Shares are principally trading
on the applicable date, or, if there were no sales on such date, on the closest
preceding date on which there were sales of Shares, or (ii) if there is no
public market for the Shares on such date, the fair market value of the Shares as
determined in good faith by the Board without any discounts for minority
interests.

 

1.12                           “Group”
means a “group” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act.

 

1.13                           “Investor
LLC” means GMACCH Investor LLC, a Delaware limited liability company.

 

1.14                           “Investors”
means, collectively, Kohlberg Kravis Roberts & Co. L.P., Five Mile Capital
Partners LLC, The Goldman Sachs Group, Inc., and Dune Capital Management L.P. 

 

1.15                           “Management
Stockholder’s Agreement” means the Management Stockholder’s Agreement entered
into between the Company and the Executive, as in effect from time to time. 

 

1.16                           “Person”
means a “person,” as such term is used for purposes of Section 13(d) or 14(d)
of the Exchange Act (or any successor section thereto).

 

1.17                           “Plan”
means this Capmark Financial Group Inc. Executive Deferred Compensation and
Stock Award Plan, as it may be amended from time to time.

 

1.18                           “Separation
from Service” shall mean an Executive’s separation from service with the
Company and its Affiliates within the meaning of Section 409A(a)(2)(A)(i) of
the Code.

 

1.19                           “Share
Account” means the account created by the Company pursuant to Article III of
this Plan in accordance with an election by an Executive to defer Compensation
and receive share-related compensation under Article II hereof.

 

1.20                           “Shares”
means the common shares of the Company, par value $0.001 per share.

 

1.21                           “Subsidiary”
means with respect to any Person, any corporation, joint venture, partnership,
limited liability company or other entity of which such Person, directly or
indirectly, owns or controls capital stock (or other equity interests)
representing more than fifty percent (50%) of the general voting power under
ordinary circumstances.

 

1.22                           “Year”
means any calendar year.

 

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1.23                           “He”,
“Him” or “His” shall apply equally to male and female members of the Board.

 

ARTICLE II

ELECTION TO DEFER

 

2.1                                 An
Executive may elect, on or before December 31, 2006, to irrevocably defer
payment, in the aggregate, of no less than $250,000 and no more than $1 million
of all Compensation to be earned during the Bonus Year following the Year in which
such election is made.  In addition, any
person who shall become an Executive during the Bonus Year, and who was not an
Executive of the Company on the preceding December 31 or otherwise an employee
of the Company or any of its Subsidiaries who participated in any other
deferred compensation plan of the Company or any of its Subsidiaries, may
elect, before the employee becomes an Executive (but in no event later than
thirty (30) days after the date such person first becomes eligible to
participate in this Plan), to defer payment of all or a specified part of such
Compensation earned during the remainder of such Bonus Year.  Any Compensation deferred pursuant to this
Section 2.1 shall be paid to the Executive at the time(s) and in the manner
specified in Article IV hereof. 

 

2.2                                 The
election to participate in the deferred compensation portion of the Plan shall
be designated by submitting a letter in the form attached hereto as Appendix A
(the “Election Form”) to the Executive Vice President of Human Resources
or General Counsel of the Company.

 

ARTICLE III

DEFERRED COMPENSATION ACCOUNTS

 

3.1                                 The
Company shall maintain separate accounts on its books and records for the
Compensation deferred by each Executive, based on the elections each Executive
has made.  

 

3.2                                 If
an Executive has elected to defer a portion of his Compensation, the Company
shall credit, on the tenth business day following the date the Company pays the
Executive’s Compensation in respect of the Bonus Year, an account (the “Share
Account”) established for each Executive with the number of hypothetical
Shares equal to (x) the deferred Compensation otherwise payable to the
Executive in respect of the Bonus Year as to which an election to receive
Share-related deferred compensation has been made, divided by (y) the then most
recently determined Fair Market Value of one Share.  

 

3.3                                 The
Company shall credit, within ten business days after the date that any
dividends are paid with respect to the hypothetical Shares, the Share Account
of each Executive who has elected to defer Compensation with the number of
hypothetical Shares equivalent to (x) the product of (a) the amount of any
dividend paid, multiplied by (b) the number of hypothetical Shares represented

 

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                                                in
the relevant Executive’s Share Account, divided by (y) the then most recently
determined Fair Market Value of one Share. 

 

3.4                                 If
adjustments are made to the authorized or issued share capital of the Company
as a result of split-ups, recapitalizations, mergers, consolidations, or other
corporate events, an appropriate adjustment shall also be made in the number of
hypothetical Shares credited to each Executive’s Share Account.

 

3.5                                 The
value of such Shares shall be computed to two decimal places.

 

3.6                                 The
Executive’s Share Accounts shall be bookkeeping entries that will not represent
any beneficial interest in any assets of the Company.  No Executive shall have any property interest
whatsoever in any assets of the Company by reason of the existence of any
credit balance in any Share Account.

 

ARTICLE IV

PAYMENT OF DEFERRED COMPENSATION

 

4.1                                 Subject
to Section 7.2, amounts contained in an Executive’s Share Account shall be
distributed no later than the tenth business day following the earlier to occur
of (i) January 1 of the Year following the Year in which any Separation from
Service occurs and (ii) the date that an Executive designates on the Election
Form as the date of distribution; so long as any such date shall constitute a
permissible time or event upon which a distribution may be made under Section
409A(a)(2)(A) of the Code (the “Election Date”).  The total amounts credited to an Executive’s
Share Account shall be paid in Shares (equal to the number of hypothetical
Shares that have accumulated in the Executive’s Share Account pursuant to
Article III), unless the Company elects to pay total amounts credited to an
Executive’s Share Account in cash.  If
the Company elects to make the payment in cash, the cash payment will be equal
to (x) the number of Shares credited to an Executive’s Share Account,
multiplied by (y) the then most recently determined Fair Market Value of one
Share, provided, however, any such cash payment made as a result
of any Separation from Service will be equal to (x) the number of Shares
credited to an Executive’s Share Account, multiplied by (y) the applicable
repurchase price otherwise payable for Shares held by the Executive, depending
upon the circumstances under which the Separation from Service occurs, as set
forth in Section 6(a), (b) or (c) of the Management Stockholder’s Agreement, as
applicable.

 

4.2                                 Each
Executive shall have the right to designate a beneficiary who is to succeed to
his right to receive payments hereunder in the event of his death.  Any designated beneficiary shall receive
payments in the same manner as the Executive would have received the payments
if he were living.  In case of a failure
of designation or the death of a designated beneficiary without a designated
successor, the balance of the amounts contained in the Executive’s Share
Account shall be payable in accordance with Section 4.1 to the Executive’s or
former Executive’s estate in full on the first day of the Year following the
Year in which he dies.  No designation of
beneficiary or change

 

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                                                in
beneficiary shall be valid unless made in writing signed by the Executive and
filed with the Executive Vice President of Human Resources or General Counsel
of the Company.  

 

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ARTICLE V 

 

STOCK AWARDS AS PAYMENT OF COMPENSATION

 

5.1                                 An
Executive may elect, on or before December 31, 2006, to irrevocably receive currently
in Shares payment of up to 100% of the difference, if any, between (i) the amount
of Compensation earned during the Bonus Year and deferred pursuant to Article
II above, and (ii) $1,000,000.  Any
person who shall become an Executive during any Bonus Year, and who was not an
Executive of the Company on the preceding December 31, may elect, before the
employee becomes an Executive (but in no event later than thirty (30) days
after the date such person first becomes eligible to participate in this Plan),
to receive current payment in Shares of all or a specified part of such
Compensation earned during the remainder of such Bonus Year.  Any Compensation paid currently in Shares
pursuant to this Section 5.1 shall be paid to the Executive in the manner specified
in Section 5.3 hereof.

 

5.2                                 The
election to participate in the stock award portion of the Plan shall be
designated on the Election Form.

 

5.3                                 If
an Executive has elected to receive a portion of his Compensation currently in
Shares, the Company shall issue to the Executive or purchase in the open market
on behalf of the Executive, on the tenth business day following the date the
Company pays the Executive’s Compensation in respect of the Bonus Year, the
number of Shares equal to (x) the Compensation otherwise payable to the
Executive in respect of the Bonus Year as to which an election to receive
Shares currently has been made, divided by (y) the then most recently
determined Fair Market Value of one Share. 

 

ARTICLE VI

GENERAL PROVISIONS

 

6.1                                 The
Committee shall administer and interpret the Plan in its sole discretion, and
the Company shall maintain the Plan at its expense.  All decisions made by the Committee with
respect to issues hereunder shall be final and binding on all parties.  The Company shall indemnify and hold harmless
the Committee against any and all claims, loss, damage, expense or liability
arising from any action or failure to act with respect to this Plan, except in
the case of gross negligence or willful misconduct.

 

6.2                                 Except
to the extent required by law, the right of any Executive or any beneficiary to
any benefit or to any payment hereunder shall not be subject in any manner to
attachment or other legal process for the debts of such Executive or
beneficiary, and any such benefit or payment shall not be subject to
alienation, sale, transfer assignment or encumbrance. 

 

6.3                                 The
Company may, but shall not be obligated to, reserve Shares, purchase Shares in
the open market, and issue Shares for the purpose of providing for

 

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the payment of
obligations arising under this Plan; provided, however, that in the event
applicable securities laws so require, the Shares to be issued under this Plan
shall be issued out of the 2006 Equity Plan for Key Employees of Capmark
Financial Group Inc. and its Affiliates.

 

6.4                                 All
payments made hereunder to an Executive or his or her beneficiary shall be
subject to the withholding of such amounts by the Company as it reasonably may
determine it is required to withhold pursuant to any applicable Federal, state,
local or foreign law or regulation. 
Additionally, to the extent that amounts deferred by an Executive under
the Plan are subject to Social Security or Medicare tax (collectively, “FICA
Tax”) or other taxes when such amounts are deferred, the Company may (i)
withhold for such taxes from the non-deferred portion of Compensation payable
to the Executive at such time,  (ii)
reduce such Executive’s Share Account in a manner specified by the Committee
(and consistent with Section 409A) to pay the applicable FICA Tax withholdings
and any additional Federal, state, local or foreign taxes thereon, or (iii)
allow the Executive to remit to the Company, no later than five business days
after the date such taxes are due, an amount in cash (payable by wire transfer
or certified check) equal to the amount of such taxes due.

 

6.5                                 This
Plan is intended to be a non-qualified, unfunded deferred compensation
arrangement.  Nothing contained herein
shall be deemed to give an Executive, an Executive’s beneficiary, or any other
Person any interest in the assets of the Company or create any kind of
fiduciary relationship between the Company and any such Person.  To the extent that any person acquires a
right to receive payments from the Company under the Plan, such right shall be
no greater than the right of any unsecured general creditor of the Company.

 

6.6                                 This
Plan is an unfunded plan that is either not classified as an “employee pension
benefit plan” or “pension plan” within the meaning of Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or is an unfunded plan maintained primarily to provide deferred compensation
benefits for a select group of “management or highly-compensated employees”
within the meaning of Sections 201, 301, and 401 of ERISA, and therefore may be
exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA upon the
making of certain filings with the U.S. Department of Labor.

 

6.7                                 Whenever
notice is required or permitted by this Plan to be given to an Executive, such
notice shall be in writing (including electronic mail, facsimile or similar
writing) and shall be given to any Executive at his or her address or
electronic mail address or facsimile number shown in the Company’s books and
records.  Each such notice shall be
effective (i) if given by electronic mail or facsimile, upon electronic
confirmation of receipt, or (ii) if given by any other means, when delivered to
and receipted for at the address of such Executive, as the case may be,
specified as aforesaid.  Notices to the
Company or the Committee under the Plan shall be sufficient if in writing and
hand delivered or sent by registered or certified mail.  Such notice shall be deemed given as of the
date of delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.  Any

 

9

 

                                                such
notice shall be directed to the attention of the Committee at the Company’s
address and shall comply with such other requirements as the Committee may
establish from time to time.

 

ARTICLE VII 

 

AMENDMENT OF PLAN; CHANGE IN
CONTROL; 

 

GOVERNING LAW; DISPUTE
RESOLUTION; SECTION 409A

 

7.1                                 The
Plan may be amended, suspended or terminated in whole or in part from time to
time by the Board except that no amendment, suspension, or termination shall
apply to the payment to any Executive or beneficiary of a deceased Executive of
any amounts previously credited to an Executive’s Share Account.

 

7.2                                 In
the event of a Change in Control, all amounts contained in each Executive’s
Share Account shall be distributed (in a lump sum, cash payment or in Shares,
as the Executive shall elect on the Election Form) no later than the tenth
business day following the date of the Change in Control.  If the Executive elects to receive the
payment in cash, the cash payment will be equal to (x) the number of Shares
credited to an Executive’s Share Account, multiplied by (y) the Fair Market
Value of one Share on the date of the Change in Control.

 

7.3                                 This
Plan shall be governed by and construed and enforced in accordance with the
laws of New York.

 

7.4                                 If
any contest or dispute arises with respect to the Plan, such contest or dispute
shall first be attempted to be resolved in accordance with the claims
procedures set forth in Article VIII below. 
If the contest or dispute cannot be settled through such procedures, the
parties agree to binding arbitration for resolution in New York, New York. If
any contest or dispute arises with respect to the Plan, and such contest or
dispute is not resolved pursuant to the claims procedures set forth above, this
Plan shall be governed by and construed and enforced in accordance with the
laws of New York.   

 

7.5                                 Notwithstanding
any other provision of the Plan, this Plan is intended to comply with Section
409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and
shall at all times be interpreted in accordance with such intent such that
amounts credited to Executives’ accounts shall not be taxable to Executives
until such amounts are paid to Executives in accordance with the terms of the
Plan.  In furtherance thereof, no
payments may be accelerated under the Plan other than to the extent permitted
under Section 409A.  To the extent that
any provision of the Plan violates Section 409A such that amounts would be
taxable to an Executive prior to payment or would otherwise subject an
Executive to a penalty tax under Section 409A, such provision shall be
automatically reformed or stricken to preserve the intent hereof.  To the extent that the Company determines
that Executives may be given greater flexibility to modify or revoke deferral
elections under the Plan in a manner consistent with Section 409A (based on
future guidance promulgated by the Internal Revenue Service and the Treasury
Department from time to time), the

 

10

 

                                                Company
may (but shall not be obligated to) amend the Plan to provide for such greater
flexibility.

 

ARTICLE VIII

 

CLAIMS PROCEDURE

 

8.1                                 Distributions
of amounts from Share Accounts shall be made in accordance with the provisions
of this Plan.  If an Executive makes a
written request alleging a right to receive a distribution of amounts under
this Plan, such action shall be treated as a claim for benefits. All claims for
benefits under this Plan shall be mailed or delivered to the Committee in
writing.

 

8.2                                 If
the Committee determines that any individual who has claimed a right to receive
benefits under this Plan is not entitled to receive all or any part of the
benefits claimed, the Committee shall notify the claimant in writing of such
determination and the reasons therefor. The notice shall be sent within 90 days
after receipt of the claim unless the Committee determines that additional
time, not exceeding 90 days, is needed and so notifies the Executive. The
notice shall make specific reference to the pertinent Plan provisions on which
the denial is based, and shall describe any additional material or information
that is necessary. Such notice shall, in addition, inform the claimant of the
procedure that the claimant should follow to take advantage of the review
procedures set forth below in the event the claimant desires to contest the
denial of the claim.

 

8.3                                 The
claimant may, within 60 days after receipt of notification of the denial of a
claim submitted hereunder, submit in writing to the Committee a notice that the
claimant contests the denial of his or her claim and desires a further review
by the Company.  Upon request and free of
charge, the Company shall provide the claimant reasonable access to all
pertinent documents, records and other information.  The Company shall also authorize the claimant
to submit issues and comments relating to the claim to the Company, which shall
review the claim, including any new information submitted by the claimant.

 

8.4                                 The
Company shall render a final decision on a claim submitted hereunder and
contested with specific reasons therefor in writing and shall transmit it to
the claimant within 60 days after receipt of the claimant’s request for review,
unless the Company determines that additional time, not exceeding 60 days, is
needed, and so notifies the Executive. 
In the event of a dispute or contest with respect to such final
decision, such dispute or contest shall be resolved pursuant to Section 7.4.

 

 

Adopted
and effective the 20th day of December, 2006.

 

11

 

APPENDIX A

 

 CAPMARK FINANCIAL GROUP INC.

EXECUTIVE COMPENSATION DEFERRAL ELECTION NOTICE

 

Date:                     
   , 200  

 

I hereby elect,
pursuant to the Capmark Financial Group Inc. Executive Deferred Compensation
and Stock Award Plan) (the “Plan”), to defer receipt, in the aggregate,
of no less than $250,000 and no more than $1,000,000 of my Compensation payable
in respect of the Bonus Year following the Year in which this election is made,
in accordance with my elections indicated below.  Capitalized terms not defined herein are
defined in the Plan.

 

(1)                                  I
elect to have my Compensation deferred as follows:

 

An amount of
my aggregate Compensation payable for the Bonus Year equal to the greater of

 

(x)         % of such amount or
(y) $        

 

shall be
deferred to my Share Account, to which the Company will credit hypothetical
Shares in the manner set forth in the Plan. 
However, I understand that in no event will I be permitted to
defer less than $250,000 or more than $1,000,000, such that if (i) the
percentage I elect in (x) above is greater than zero but less than $250,000,
the Company will nevertheless automatically defer a full $250,000 of
Compensation payable for the Bonus Year and (ii) if the percentage I elect in
(x) above is greater than $1,000,000, the Company will only defer $1,000,000,
and I will receive the excess of my Compensation in cash.

 

I further
understand that in the event my aggregate Compensation payable for the Bonus
Year does not exceed $250,000, I will receive the entire amount of my
Compensation payable for the Bonus Year in cash.

 

(2)                                  I
understand that my Share Account generally shall become payable on a specified
date on which I elect to receive payment of my deferred Compensation (the “Election
Date”), but in any event on the earlier to occur of (i) January 1 of the
Year following the Year in which any Separation from Service occurs and (ii)
the date of the occurrence of a Change in Control.

 

My Election
Date is the following:                         ,
20    (e.g. January 1, 2010).

 

I elect to
receive the payments due to me pursuant to the Plan in the event of a Change in
Control as follows (check the method desired below):

 

	
   

  	
   

  	
   

  	
  in a cash, lump sum payment

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  in Shares

  

12

 

(3)                                  The
remainder of my Compensation shall not be deferred into hypothetical Shares,
and shall be payable to me currently as follows:

 

An amount of
my aggregate Compensation for the Bonus Year equal to

 

(x) $         or (y)         
%, which in any event may not be more than the amount of the difference, if
any, between (i) the amount of Compensation earned during the Bonus Year and
deferred as set forth in paragraph (1) above and (ii) $1,000,000,

 

shall be paid
to me in Shares at such time(s) as annual bonuses or incentive compensation are
otherwise paid, in accordance with the Plan.

 

I understand that the remainder of my
aggregate Compensation for the Bonus Year (and any amount of my aggregate
Compensation for the Bonus Year that is in excess of $1,000,000) shall be paid
to me in cash at such time(s) as annual bonuses or incentive compensation is
otherwise paid, in accordance with the applicable plan.

 

I further understand that (i) to the extent I
make no election under this Election Notice or do not designate the manner in
which any portion of my Compensation that I elect to receive currently shall be
payable to me, I will receive such portion(s) of my Compensation in cash; and (ii)
all elections I have made above with respect to current receipt of my
Compensation applicable to a particular Year may not be amended or revoked with
respect to the Bonus Year.

 

In the event
of my death prior to receipt of all or any balance of such Compensation and
dividends, if any, thereon so accumulated, I designate                                    
as my beneficiary to receive Shares (or, if applicable, the funds) payable.

 

 

Acknowledged
and Agreed this     day of                   ,
200  .

 

 

	
   

  	
   

  
	
  Executive

  

 

13Exhibit
10.26

Execution Copy

CAPMARK STRUCTURED REAL ESTATE FUND INCENTIVE
VEHICLE, L.P.

LIMITED
PARTNERSHIP AGREEMENT

THE
PARTNERSHIP INTERESTS ISSUED PURSUANT TO THIS LIMITED PARTNERSHIP 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 PARTNERSHIP INTERESTS ARE SUBJECT TO
THE RESTRICTIONS ON TRANSFER SET FORTH IN THIS AGREEMENT.

Capmark
Structured Real Estate Fund Incentive Vehicle, L.P.

Limited
Partnership Agreement

Table of Contents

 

	
  1.

  	
  Recitals and Definitions

  	
  1

  
	
   

  	
  1.1

  	
  Recitals

  	
  1

  
	
   

  	
  1.2

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Formation
  of Limited Partnership

  	
  7

  
	
   

  	
  2.1

  	
  Organization

  	
  7

  
	
   

  	
  2.2

  	
  Partnership
  Name

  	
  7

  
	
   

  	
  2.3

  	
  Purposes
  and Business

  	
  7

  
	
   

  	
  2.4

  	
  Principal
  Business Office; Registered Office and Registered Agent

  	
  8

  
	
   

  	
  2.5

  	
  Qualification
  in Other Jurisdictions

  	
  8

  
	
   

  	
  2.6

  	
  Powers

  	
  8

  
	
   

  	
  2.7

  	
  Application
  of the Act

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Management of
  the Partnership

  	
  9

  
	
   

  	
  3.1

  	
  General
  Authority

  	
  9

  
	
   

  	
  3.2

  	
  Reliance
  by Third Parties

  	
  9

  
	
   

  	
  3.3

  	
  Partnership
  Classification

  	
  9

  
	
   

  	
  3.4

  	
  Exculpation

  	
  9

  
	
   

  	
  3.5

  	
  Indemnification

  	
  10

  
	
   

  	
  3.6

  	
  Payment
  of Indemnification Expenses

  	
  10

  
	
   

  	
  3.7

  	
  Insurance

  	
  11

  
	
   

  	
  3.8

  	
  Indemnification
  Agreements

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Capital Contributions and Defaulting Partners

  	
  11

  
	
   

  	
  4.1

  	
  Capital
  Calls

  	
  11

  
	
   

  	
  4.2

  	
  Reinvestment
  of Proceeds; Recall of Distributed Capital

  	
  11

  
	
   

  	
  4.3

  	
  Procedure
  for Capital Calls

  	
  12

  
	
   

  	
  4.4

  	
  Interest

  	
  12

  
	
   

  	
  4.5

  	
  Fund
  Borrowings

  	
  12

  
	
   

  	
  4.6

  	
  Defaulting
  Partners

  	
  13

  
	
   

  	
  4.7

  	
  Further
  Actions

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Distributions; Capital Accounts; Allocations; Clawback

  	
  16

  
	
   

  	
  5.1

  	
  Distributions

  	
  16

  
	
   

  	
  5.2

  	
  Capital
  Accounts

  	
  17

  
	
   

  	
  5.3

  	
  Allocation
  of Income and Loss

  	
  17

  
	
   

  	
  5.4

  	
  Special
  Allocations

  	
  18

  
	
   

  	
  5.5

  	
  Excess
  Nonrecourse Liabilities

  	
  19

  
	
   

  	
  5.6

  	
  Code
  Section 704(b) Compliance

  	
  19

  
	
   

  	
  5.7

  	
  Tax
  Elections and Decisions

  	
  19

  
	
   

  	
  5.8

  	
  Safe
  Harbor Election and Forfeiture Allocations

  	
  19

  

 

(i)

 

 

	
   

  	
  5.9

  	
  Allocations
  and Distributions on Transfer of Compensatory Interests from the Company 

  	
   

  
	
   

  	
   

  	
  Controlled
  Limited Partner

  	
  20

  
	
   

  	
  5.10

  	
  Clawback.

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Effect of
  Employment Termination and Limited Partner Withdrawal; Vesting; Forfeiture;

  	
   

  
	
   

  	
  Repurchase

  	
  22

  
	
   

  	
  6.1

  	
  Cessation
  of Employment; Limited Partner Withdrawal

  	
  22

  
	
   

  	
  6.2

  	
  Vesting

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Transfers of Limited Partnership Interests; Withdrawal

  	
  25

  
	
   

  	
  7.1

  	
  Assignability
  of Interests

  	
  25

  
	
   

  	
  7.2

  	
  Substitute
  Limited Partners

  	
  27

  
	
   

  	
  7.3

  	
  Legal
  Representatives

  	
  27

  
	
   

  	
  7.4

  	
  Obligations
  of Assignee

  	
  28

  
	
   

  	
  7.5

  	
  Additional
  Requirements

  	
  28

  
	
   

  	
  7.6

  	
  Allocation
  of Distributions Between Assignor and Assignee

  	
  28

  
	
   

  	
  7.7

  	
  Death
  or Incapacity of a Limited Partner

  	
  29

  
	
   

  	
  7.8

  	
  Pledged
  Interest

  	
  29

  
	
   

  	
  7.9

  	
  Withdrawal
  of a Limited Partner

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Admission of
  Partners

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Rights and Obligations of the Limited Partners

  	
  30

  
	
   

  	
  9.1

  	
  Limited
  Liability

  	
  30

  
	
   

  	
  9.2

  	
  Authority
  of Limited Partners

  	
  30

  
	
   

  	
  9.3

  	
  Voting
  Rights of Limited Partners

  	
  30

  
	
   

  	
  9.4

  	
  General
  Release

  	
  31

  
	
   

  	
  9.5

  	
  Confidentiality

  	
  31

  
	
   

  	
  9.6

  	
  Non-Disparagement

  	
  32

  
	
   

  	
  9.7

  	
  No
  Right to Continued Employment

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Duration and Termination of the Partnership

  	
  33

  
	
   

  	
  10.1

  	
  Duration
  and Dissolution

  	
  33

  
	
   

  	
  10.2

  	
  Bankruptcy
  of Limited Partner

  	
  33

  
	
   

  	
  10.3

  	
  Effect
  of Admission or Withdrawal of Limited Partner

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Liquidation of the Partnership

  	
  33

  
	
   

  	
  11.1

  	
  General

  	
  33

  
	
   

  	
  11.2

  	
  Priority
  on Liquidation; Distributions

  	
  34

  
	
   

  	
  11.3

  	
  Orderly
  Liquidation

  	
  34

  
	
   

  	
  11.4

  	
  Source
  of Distributions

  	
  34

  
	
   

  	
  11.5

  	
  Statements
  on Termination

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Books and Records; Tax Matters

  	
  35

  
	
   

  	
  12.1

  	
  Books
  and Accounts

  	
  35

  
	
   

  	
  12.2

  	
  Records
  Available

  	
  35

  

 

(ii)

 

	
   

  	
  12.3

  	
  Tax
  Matters Partner; Filing of Returns

  	
  35

  
	
   

  	
  12.4

  	
  Fiscal
  Year

  	
  35

  
	
   

  	
  12.5

  	
  Tax
  Consequences to U.S. Taxpayers

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Power of Attorney

  	
  36

  
	
   

  	
  13.1

  	
  General

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Compensation
  of the General Partner and Partnership Expenses

  	
  37

  
	
   

  	
  14.1

  	
  No
  Compensation

  	
  37

  
	
   

  	
  14.2

  	
  Partnership
  Expenses

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Miscellaneous

  	
  37

  
	
   

  	
  15.1

  	
  Further
  Assurances

  	
  37

  
	
   

  	
  15.2

  	
  Successors
  and Assigns

  	
  38

  
	
   

  	
  15.3

  	
  Applicable
  Law

  	
  38

  
	
   

  	
  15.4

  	
  Severability

  	
  38

  
	
   

  	
  15.5

  	
  Counterparts

  	
  38

  
	
   

  	
  15.6

  	
  Entire
  Agreement

  	
  38

  
	
   

  	
  15.7

  	
  Amendment

  	
  38

  
	
   

  	
  15.8

  	
  Construction

  	
  38

  
	
   

  	
  15.9

  	
  Force
  Majeure

  	
  39

  
	
   

  	
  15.10

  	
  Notices

  	
  39

  
	
   

  	
  15.11

  	
  No
  Right of Partition for Redemption

  	
  39

  
	
   

  	
  15.12

  	
  Third-Party
  Beneficiaries

  	
  39

  
	
   

  	
  15.13

  	
  General
  Partner as Limited Partner

  	
  39

  
	
   

  	
  15.14

  	
  Survival

  	
  40

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Schedules:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Schedule A

  	
  List of Limited
  Partners, Capital Commitments, Capital Commitment Percentages,

  	
   

  
	
   

  	
   

  	
   Carried Interest Percentages and
  Commencement Dates

  	
   

  
					

 

 

 

 

(iii)

 

Capmark Structured Real
Estate Fund Incentive Vehicle, L.P.

Limited Partnership
Agreement

1.                                      Recitals and Definitions

1.1           Recitals.  This Limited Partnership Agreement (this “Agreement”)
has been entered into as of December 1, 2006 (the “Effective Date”) by and
among Capmark Carried Interest, L.L.C., a Delaware limited liability company, as the sole
general partner (the “General Partner”), and the persons listed from time to
time in Schedule A of this Agreement as Class A Limited Partners
(the “Class A Limited Partners”) and Class B Limited Partners (the “Class B
Limited Partners” which, together with the Class A Limited Partners, are
collectively referred to as the “Limited Partners”).

The Class A Limited Partners are the limited partners
that are required to make capital contributions to the Partnership in
accordance with the terms hereof.

The Class B Limited Partners are the limited partners
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
Partner, such Partner’s Capital Account balance as increased by such Partner’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 Partner’s interest
in the Partnership.

 

 

“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 Limited Partner, the ratio that the Capital Commitment of such Class A
Limited Partner bears to the aggregate Capital Commitments of all Class A
Limited Partners, as set forth on Schedule A on the page applicable
to such Class A Limited Partner, subject to modification as set forth herein.

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

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

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

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

“Carried Interest Revenue” means the Incentive
Distributions and Special Tax Distributions received by the Fund GP from the
Fund and distributed by the Fund GP to the Partnership pursuant to the Fund GP
Agreement, which shall be 100% of the Incentive Distributions and Special Tax
Distributions received by the Fund GP. 
Carried Interest Revenue shall also include all additional revenue
attributable to Carried Interest Revenue such as earnings on any escrow of
Carried Interest Revenue set aside pursuant to Section 5.1(a)(i).

“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 Partner has been
employed by the Capmark Financial Group Inc. or one of its affiliates: (i) the
Partner’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 Partner by Capmark Financial Group Inc. or one of its affiliates  (such ten-day period, the “Cure Period”);
(ii) any gross misconduct of the Partner 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

 

2

in
the Fund GP Agreement; (iii) conviction of, or plea of guilty or nolo contendere to, the commission
of (x) a felony by the Partner or (y) any misdemeanor involving theft, fraud,
misappropriation or moral turpitude (other than in connection with any traffic
violations); (iv) the Partner’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 Partner 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 Partner; (v) the Partner’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
Partner of his constitutional rights under the Fifth Amendment of the United
States Constitution in the event of any criminal investigation of the Partner
shall not be treated as obstruction of or failure to cooperate with any such
investigation; (vi) the Partner’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 Partner 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 Partnership pursuant to the Fund
GP Agreement.

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

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

“Class B Limited Partners”
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.

“Company Controlled Limited
Partner” means Capmark Structured Fund Carried Interest LP, a Delaware limited
partnership.

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

“Credit Facility” shall have
the meaning set forth in Section 4.5.

“Defaulting Limited Partner” shall have the meaning
set forth in Section 4.6(a).

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

 

3

 

“Distributable Proceeds” means all cash of the Partnership
derived directly or indirectly from the Fund or in connection with the Fund’s
operations, Investments (as defined in the Fund Agreement), refinancings or
other sources, which the General Partner determines is available for
distribution to the Partners pursuant to and in accordance with this Agreement.

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

“Employee Limited Partners” mean the Limited Partners
other than the Company Controlled Limited Partner.

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

“Estimated Value Capital Account” means, with respect
to any Partner, the amount such Partner would receive in a hypothetical
liquidation of the Partnership, 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 Partnership, 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 General Partner, in its sole and absolute discretion, for
significant events occurring subsequent to such valuations), and the
distribution of the proceeds thereof to the partners of the Fund, the Fund GP
and the Partners pursuant to the Fund Agreement, the Fund GP Agreement and this
Agreement, respectively (after the hypothetical payment of all actual Fund,
Fund GP and Partnership indebtedness, assumed closing costs (as estimated by
the General Partner) and any other liabilities related to the Fund’s, the Fund
GP’s and the Partnership’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 Date” has the
meaning set forth in the Fund Agreement.

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

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

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

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

“Fund GP” means Capmark Structured GP, L.P., a
Delaware limited partnership.

“Fund” means Capmark Structured Real Estate Partners,
L.P., a Delaware limited partnership.

 

4

“General Partner” 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 General Partner pursuant
to this Agreement.

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

“Incentive Distributions” has the meaning set forth in
the Fund Agreement.

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

“Investment” shall have the meaning set forth in the
Fund Agreement.

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

“Investment Manager” shall mean Capmark Investments LP.

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

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

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

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

“Management Fees” 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-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-Defaulting Partner” means any Partner that is not
a Defaulting Partner.

“Organization Expenses” shall have the meaning set
forth in the Fund Agreement.

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

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

“Partners” shall mean the General Partner and the
Limited Partners.

 

5

“Partnership” shall mean Capmark Structured Real
Estate Fund Incentive Vehicle, L.P., a Delaware limited partnership.

“Partnership Expenses” shall have the meaning set
forth in the Fund Agreement.

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

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

“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.

“Portfolio Investment” shall have the meaning set
forth in the Fund Agreement.

“Predecessor In Interest,” as to the Equity Interest
of any Partner, shall mean any Partner 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 Partnership, the Fund, the Fund
GP, the General Partner or one of their Affiliates and that either (i) is a
Limited Partner or (ii) was a Limited Partner, and, in the case of either (i) or
(ii) has assigned all or part of his or her rights, benefits and obligations as
a Limited Partner to a family trust or other tax or estate planning vehicle in
accordance with Sections 7 and 8 hereof.

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

“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.

“Subscription Agreement” means the form of subscription agreement
used by the Partnership pursuant to which Class A Limited Partners shall
subscribe in exchange for interests in the Partnership and shall make Capital
Commitments proposed by the Partnership or the Fund to be secured by the Class
A Partners’ 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 Limited Partner’s Capital
Commitment that has not been contributed to the Partnership plus (b) any
portion of an Class A Limited Partner’s Capital Commitment that has been
contributed to the

 

6

Partnership
and has been subsequently returned to such Class A Limited Partner and may be
recalled pursuant to Section 4.6.

2.                                      Formation of
Limited Partnership

2.1           Organization.  The Partnership has been formed by the filing
of the certificate of limited partnership (as it may be amended or restated
from time to time, the “Certificate”) for the Partnership required under the
Delaware Revised Uniform Limited Partnership 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 Limited Partner, the Certificate may be restated by the General Partner as
provided in the Act or amended by the General Partner to change the address of
the office of the Partnership in Delaware or the name and address of its
resident agent in Delaware or to make corrections required by the Act.  The General Partner shall deliver a copy of
the Certificate and any amendment thereto to any Limited Partner who so
requests.

2.2           Partnership Name.  The name of the Partnership shall be “Capmark
Structured Real Estate Fund Incentive Vehicle, L.P.”  The business of the Partnership may be
conducted, upon compliance with all applicable laws, under the Partnership name
or any other name or names designated by the General Partner.  The General Partner in its sole discretion
may change the name of the Partnership. 
The General Partner shall execute, file, record and publish as
appropriate any such amendments to the Certificate of Limited Partnership and
other documents in connection therewith as are or become necessary or advisable
as determined by the General Partner in its sole discretion.  The General Partner shall promptly notify the
Limited Partners of any such change in the name of the Partnership.

2.3           Purposes and Business.

(a)           The purpose and principal business
activity of the Partnership is to serve as a limited partner 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 Limited Partner and certain individuals
providing services to or on behalf of the Fund and the Fund GP.  The Carried Interest Percentages initially
allocated to the members of the Investment Manager’s portfolio team (the “Investment
Team Members”) and those Carried Interest Percentages which the General Partner
will cause the Company Controlled Limited Partner to transfer to Investment
Team Members will initially aggregate twenty-five (25%) of the Carried Interest
Revenue attributable to Non-Affiliated Fund Partners (“Non-Affiliated Carried
Interest Revenue”).  The General Partner
will cause the Company Controlled Limited Partner 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

 

7

Agreement) and its Affiliates who the General Partner
determines have added value to the Fund. 
Notwithstanding anything to the contrary herein, once the initial
allocations have been transferred by the Company Controlled Limited Partner in
accordance with Section 7.1(c) and if any Class B Limited Partner forfeits or
otherwise transfers such Carried Interest percentage to the Company Controlled
Limited Partner, regardless of the reason, neither the General Partner nor the
Company Controlled Limited Partner shall be under any obligation to reissue or
reallocate such Carried Interest Percentages to achieve the percentage
allocations noted above.

(b)           The Partnership 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 Partnership 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 Partnership shall be located at c/o
Capmark Carried Interest, L.L.C., 200 Witmer Road, Horsham, PA 19044.  The principal business office of the
Partnership may be changed from time to time by the General Partner.  The General Partner shall notify the Limited
Partners of any change in such principal business office.  The registered office of the Partnership 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
Partnership 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 Partnership may be changed by the General Partner from time to time.  The General Partner shall promptly notify the
Limited Partners of any such change.

2.5           Qualification in Other
Jurisdictions.  The General Partner
may cause the Partnership to be qualified or registered under applicable laws
in such states as the General Partner determines appropriate to avoid any
material adverse effect on the business of the Partnership 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 Partnership 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
partnerships formed pursuant to the Act.

2.7           Application of the Act.  Except as expressly provided in this
Agreement, the rights and liabilities of the Partners 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.

 

8

 

3.                                      Management of the Partnership

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

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

3.3           Partnership Classification.  The General Partner shall use its best
efforts to cause the Partnership 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
Partnership shall not elect to be treated other than as a partnership for
federal income tax purposes.

3.4           Exculpation.  Neither the General Partner 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 Partnership or any Partner
for any loss suffered by the Partnership or any Partner 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
Partnership or the performance of the General Partner’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 Partner has duties (including fiduciary
duties) and liabilities relating thereto to the Partnership, any Partner or any
other Person, such Partner acting under this Agreement shall not be liable to
the Partnership, any Partner 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

 

9

Partner otherwise existing
at law or in equity, are agreed by each Partner to replace such other duties
and liabilities of such Partner.  In
addition, an Indemnified Party shall not be liable to the Partnership, any
Partner or any other Person for its good faith reliance on the advice of any
counsel, accountant or other advisor retained by the Partnership.

3.5           Indemnification.

(a)           Subject to the limitations contained
in this Section 3.5, the Partnership 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 Partnership or
the performance of the General Partner’s duties under this Agreement or by
reason of any action or omission taken or omitted on behalf of the
Partnership.  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 Partnership or
otherwise taken or omitted in connection with providing services to the
Partnership or the performance of the General Partner’s duties under this
Agreement; provided, however, that an Indemnified Party 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 Partnership or the performance of the
General Partner’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 Partnership 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 General Partner’s
sole and absolute discretion the Partnership

 

10

 

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 Partnership
has received a written undertaking of such Indemnified Party to repay to the
Partnership the amount so advanced if it shall be finally determined that such
Indemnified Party was not entitled to indemnification hereunder.

3.7           Insurance.  The General Partner, in its sole and absolute
discretion, may cause the Partnership 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 Partnership would have the power to indemnify against such
liability or cost.

3.8           Indemnification Agreements.  The General Partner, in its sole and absolute
discretion, may cause the Partnership 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 and Defaulting Partners

4.1           Capital Calls.  Each Class A Limited Partner agrees to pay to
the Partnership an aggregate amount in cash equal to its Capital Commitment set
forth opposite such Class A Limited Partner’s name on Schedule A on
the page applicable to such Class A Limited Partner, subject to modification as
set forth herein.  All or any portion of
each Class A Limited Partner’s Capital Commitment shall be payable upon not
less than nine (9) Business Days’ prior written notice  (a
“Capital Call”) from the General Partner in accordance with Section 4.2(a)
below.  Each Class A Limited Partner
shall be required to contribute such Partner’s Capital Commitment Percentage of
the Capital Call on the due date specified in the Capital Call.  All Capital Contributions from Class A
Limited Partners, as applicable, shall be contributed to the Fund GP promptly
upon receipt by the Partnership 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 Partner shall have any right to make any
Capital Contribution that has not been called by the General Partner pursuant
to this Section 4.1.  The General Partner
shall not have any Capital Commitment in its capacity as General Partner, but
the General Partner shall make such contributions as may be needed to timely
pay Partnership expenses in accordance with Section 14.2.  Notwithstanding anything to the contrary in
this Agreement, in no event shall any Class A Limited Partner be required to
make Capital Contributions to the Partnership in respect of its Capital
Commitment in excess of its Capital Commitment.

4.2           Reinvestment of Proceeds; Recall
of Distributed Capital.

(a)           Prior to December 1, 2010, the
General Partner may recall from the Class A Limited Partners such Distributable
Proceeds as contemplated below.

 

11

(b)           The Distributable Proceeds from any
Target Investment (as defined in the Fund Agreement) that may be reinvested
may, at the discretion of the Fund GP, be distributed to the Class A Limited
Partners, subject to the right of the General Partner and the Fund GP to make a
Capital Call prior to the fourth anniversary of the Final Closing Date (as
defined in the Fund Agreement) with respect to such amounts previously
distributed (the “Class A Returned Contributions”).  Any Capital Contribution made by a Class A
Limited Partner pursuant to this Section 4.2(b) shall not reduce the
outstanding unpaid balance of such Class A Limited Partner’s Capital
Commitment.  The obligation to make
Capital Contributions pursuant to this Section 4.2(b) shall not increase the
Capital Commitment of any Class A Limited Partner.

 

4.3           Procedure for Capital Calls.  A Capital Call shall be in the form of a
written notice to all Class A Limited Partners 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 Limited Partner 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 General
Partner 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
General Partner to make any subsequent Capital Call.

4.4           Interest.  No Class A Limited Partner shall be entitled
to receive any interest on any Capital Contributions to the Partnership.

4.5           Fund Borrowings.  In the sole discretion of the Fund GP, the
Fund may obtain a credit facility in order to finance the Portfolio
Investments, and to pay Fund Expenses, Organizational Expenses or Management
Fees as a short term bridge facility in advance of calling for capital contributions
from the Fund’s limited partners (the “Credit Facility”).  The Fund may secure such Credit Facility by
pledging assets of the Fund, including without limitation, an assignment of the
Partnership’s capital commitment to the Fund which the Partnership will fund
from the Capital Commitments, and each Class A Limited Partner shall, at the
request of the General Partner, (a) confirm that except as otherwise provided
in Section 5 of the Fund Agreement, such Class A Limited Partner’s obligation
to make Capital Contributions is unconditional and that such Class A Limited
Partner will honor calls for Capital Contributions by the lender or the General
Partner in order to fund calls for capital contributions to the Fund made by
the Lender, (b) if the lender shall so request, such Class A Limited Partner
shall confirm to the lender the amount of such Class A Limited Partner’s
Capital Commitment, and (c) execute such documents, security agreements,
instruments, certificates and agreements and deliver such opinions with respect
to the Class A Limited Partner as shall be required by the lender, provided,
that lender’s recourse against a Class A Limited Partner with respect to such
Fund borrowings shall be limited to such Class A Limited Partner’s respective Uncontributed
Capital Commitment.  The Fund’s use of
the proceeds of any borrowing obtained pursuant to this Section 4.5 shall
comply with the terms of the Fund Agreements as if such proceeds constituted

 

12

capital contributions by the Partnership to the Fund,
but such use of proceeds shall not in any way reduce any Class A Limited
Partner’s Capital Commitment.

4.6           Defaulting Partners.

(a)           Pledge of Partnership Interests to
the Partnership.  Each Class A
Limited Partner (including the General Partner to the extent it holds any Class
A Limited Partner interests) hereby grants to the Partnership a security
interest in its Equity Interest as a Class A Limited Partner to secure payment
of its Capital Commitment.  Each Class A
Limited Partner agrees to execute such further security agreements and such
Uniform Commercial Code financing statements as the General Partner may
reasonably request to more completely document and to perfect such security
interest.  Except as provided above, no
Class A Limited Partner shall pledge or grant a security interest in its Equity
Interest without the prior approval of the General Partner, with such approval
to be granted or withheld in the sole discretion of the General Partner.

(b)           Notice of Default and Interest.  If a Class A Limited Partner fails to pay any
installment of its Capital Commitment when due, then a notice of default shall
be given to such Class A Limited Partner (a “Defaulting Partner”) by or on
behalf of the General Partner.  To the
extent the installment is not received by the Partnership when due, then such
amount shall bear interest payable to the Partnership at the lower of (i) the
rate of eighteen percent (18%) per annum, compounded monthly, or (ii) the
highest rate of interest permitted under applicable law, from and after the original
due date of such installment until the earliest of (A) the payment of such
installment, including any interest accruing under this Section 4.6(b), (B) the
purchase of such Defaulting Partner’s Defaulted Interest under Section 4.6(c)
or (C) the conclusion of foreclosure proceedings of the security interest
granted under this Section 4.6. Any interest paid by a Defaulting Partner
pursuant to this Section 4.6(b) shall not be treated as a Capital Contribution
but shall be treated as Class A Capital Contribution Revenue of the
Partnership.  A copy of any notice of
default provided to a Defaulting Partner pursuant to this Section 4.6(b) shall
be transmitted promptly to all other Class A Limited Partners.

(c)           Additional Remedies.  In addition to, and not in limitation of, the
foregoing Section 4.6(a) and Section 4.6(b), upon five (5) Business Days’
written notice to any Partner that becomes a Defaulting Partner (and provided
that such default has not been cured by the Defaulting Partner, together with
the payment of interest in accordance with Section 4.6(b), within such five (5)
Business Day period), the General Partner, in its sole discretion, must first
offer the right to the Company Controlled Limited Partner to purchase all or
any portion of the Equity Interest of the Defaulting Partner in the Partnership
(a “Defaulted Interest”); provided that the Company Controlled Limited Partner
is not a Defaulting Partner.  In the
event that such Defaulted Interest is not purchased by the Company Controlled
Limited Partner pursuant to this Section 4.6(c), then the General Partner may:

(i)            offer to all non-defaulting Class A
Limited Partners the right to acquire, but not the obligation, (subject to the
terms of this Agreement) on

 

13

a pro rata basis in accordance with their Capital
Commitment Percentage all or any portion of the Defaulted Interest, and (ii) in
the event any non-defaulting Class A Limited Partners or the Company Controlled
Limited Partner do not elect in writing within five (5) Business Days of such
notice to acquire their entire pro rata portions of such Defaulted Interest
pursuant to Section 4.6(c) and this Section 4.6(c)(i), respectively, offer to
the non-defaulting Class A Limited Partners who have elected to acquire their
full pro rata portions the opportunity for an additional three (3) Business Day
period to acquire, on a pro rata basis with any other Class A Limited Partner
who so elects, the remaining portion of the Defaulted Interest;

(ii)           in the event that the entire
Defaulted Interest of the Defaulting Partner is not acquired by the Company
Controlled Limited Partner or the Class A Limited Partners as provided in
4.6(c) or this Section 4.6(c)(ii), respectively and the foregoing clause (a),
cause the Partnership to acquire all or a portion of the portion of such
Defaulting Partner’s Defaulted Interest not so acquired; provided, however,
that the aggregate amount of the Defaulting Partner’s Defaulted Interest
purchased by the Class A Limited Partners pursuant to clause (a) and by the
Partnership pursuant to this clause (b) must be equal to the entire Defaulted
Interest of the Defaulting Partner, unless the remainder of such Defaulted
Interest is acquired pursuant to clause (c) below; and/or

(iii)          in the event that the entire Defaulted
Interest of the Defaulting Partner is not acquired by the Company Controlled
Limited Partner or the Class A Limited Partners as provided in Section 4.6(c)
or this Section 4.6(c)(iii) and pursuant to clause (a) above and/or by the
Partnership pursuant to clause (b) above, designate one or more third parties,
which parties may be Partners, to acquire (subject to the terms of Article 5
hereof) all, but not less than all, of the Defaulting Partner’s Defaulted
Interest not so acquired by the Class A Limited Partners and/or the
Partnership.

The General Partner shall not permit any party to
acquire a Defaulting Partner’s Defaulted Interest if such acquisition would
cause the assets of the Partnership to be deemed “plan assets” within the
meaning of ERISA and the regulations thereunder.

(d)           Purchase of Defaulted Interest.  With respect to any acquisition made pursuant
to Section 4.6(c) above, the aggregate consideration payable to the Defaulting
Partner shall be a cash payment (or to the extent of a purchase by the
Partnership, may be by an unsecured promissory note of the Partnership, at the
election of the General Partner) in an amount equal to fifty percent (50%) of
such Defaulting Partner’s Estimated Equity Interest Value; in all cases net of
all costs and expenses incurred by the Partnership, the General Partner and all
acquiring parties in connection with such default and the acquisition of such
Defaulted Interest.  Each acquiring party
shall be obligated, severally and not jointly, to pay its pro rata portion of
such consideration based on the percentage of the Defaulting Partner’s
Defaulted Interest acquired by such party. 
In the event that the General Partner exercises its right to cause

 

14

 

the Partnership to acquire all or a portion of a
Defaulting Partner’s Defaulted Interest pursuant to Section 4.6(c)(ii), for
purposes of determining each Class A Limited Partner’s liability for any
resulting Capital Calls made in connection therewith, the Capital Commitment
Percentage of the Class A Limited Partners shall be calculated assuming that
the Partnership’s proposed purchase of all or a portion of the Defaulted
Interest has been completed.  Any
non-defaulting Class A Limited Partner that acquires all or a portion of a
Defaulting Partner’s Defaulted Interest shall also assume the portion of the
Defaulting Partner’s Capital Commitment corresponding to the acquired portion
of the Defaulted Interest and shall pay to the Partnership, concurrently with
the payment of the purchase price to the Defaulting Partner, an amount
representing the portion of the Defaulting Partner’s Capital Call that is then
due and unpaid that corresponds to the acquired portion of the Defaulted
Interest.  Any interest that accrues
under Section 4.6(c) with respect to a Defaulting Partner’s Defaulted Interest
prior to the acquisition of such Defaulted Interest pursuant to Section 4.6(c),
will remain an obligation of the Defaulting Partner and will not be assumed by
any Person acquiring the Defaulted Interest.

(e)           Collection of Capital Commitment.  In addition to, and not in limitation of, any
of the foregoing, upon termination of the five (5) Business Day period provided
in Section 4.6(c), the General Partner, in its sole discretion, may commence
proceedings to collect any due and unpaid installment of the Defaulting Partner’s
Capital Commitment and any additional Capital Contribution, as applicable (plus
interest in accordance with Section 4.6(c) and the expenses of collection,
including court costs and attorneys’ fees and disbursements).

(f)            Additional Damages.  Any actions taken by the General Partner or
the Partnership pursuant to this Section 4.6 shall be in addition to, and not
in limitation of, any other rights or remedies that the Partnership or the
General Partner may have against the Defaulting Partner, including the right to
hold the Defaulting Partner responsible for any damages or liabilities
(including attorneys’ fees and expenses) to which the Partnership or the
General Partner may be subjected (in whole or in part) as a result of the
default by the Defaulting Partner.

(g)           Cooperation in Sale.  Each Class A Limited Partner hereby agrees
that, in the event that such Class A Limited Partner shall fail to pay when due
any installment of its Capital Commitment required pursuant to Section 4.1, and
the General Partner elects to pursue any remedy set forth in Section 4.6(c),
such Class A Limited Partner shall sell, assign, transfer and convey to the
Partnership, any designee of the General Partner or any and all Class A Limited
Partners making the election contemplated by Section 4.6(c), its entire Equity
Interest in the Partnership, in consideration of the amount specified in
Section 4.6(d).  Upon consummation of
such sale, assignment, transfer or conveyance, Schedule A to this Agreement
will be appropriately modified by the General Partner and delivered to the
Partners.

(h)           Voting By Defaulting Partner.  Notwithstanding anything to the contrary
herein, so long as a Defaulting Partner remains a Defaulting Partner, such
Partner shall not be entitled to exercise any voting rights otherwise granted
to such

 

15

Partner under this Agreement, and during such time in
calculating any voting threshold under this Agreement, such Defaulting Partner
shall not be included in either the numerator or the denominator of such
calculation.

4.7           Further Actions.  To the extent necessary in the sole discretion
of the General Partner, the General Partner 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.

5.                                      Distributions;
Capital Accounts; Allocations; Clawback

5.1           Distributions.

(a)           Subject to
Sections 4.6, and 5.1(b), the General Partner shall cause the Partnership to
make distributions as follows:

(i)            all Carried Interest Revenue shall
be distributed among the Class B Limited Partners in proportion to their
respective Carried Interest Percentages promptly following receipt by the
Partnership; provided, however that prior to making any distribution of Carried
Interest Revenue, the General Partner may require, in its sole and absolute
discretion, that al or a portion of any distribution of Carried Interest
Revenue be set aside in an escrow account for the purpose of satisfying any
current or anticipated obligations of the Class B Limited Partners to make
repayments pursuant to Section 5.10.

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

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

(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 Partnership is then a party or
any law, rule, regulation, order or directive of any governmental authority then
applicable to the Partnership.

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

(d)           Any distributions retained by the
General Partner in escrow pursuant to Section 5.1(a) with respect to any Class
B Limited Partner’s obligations

 

16

pursuant to Section 5.10 shall be credited to such
partner’s Carried Interest Percentage, but shall be held in escrow by the
Company Controlled Limited Partner until such time as such the General Partner
determines to release such partner’s Carried Interest Percentage at which time
it will be released pursuant to this Section 5.1(d).

5.2           Capital Accounts.  A separate capital account (each, a “Capital
Account”) shall be maintained for each Partner 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 Partnership may adjust the Capital
Accounts of its Partners to reflect revaluations of the Partnership 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
Partners are so adjusted, (i) the Capital Accounts of the Partners 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 Partners’ 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
Partnership 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 Partnership property, the Capital Accounts of the Partners 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.

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 General Partner in
good faith), allocations shall be made among the Partners as follows:

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

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

(c)           All Partnership expenses shall be
allocated to the General Partner.

(d)           All other items of Partnership
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 Limited Partners in proportion to their
respective Capital Commitment Percentages.

 

17

5.4           Special Allocations.

(a)           Any Partner 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 Partners 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 Partners 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 Partner’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 Partnership that are
attributable to a nonrecourse debt of the Partnership 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 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 Partner 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 Partner’s Adjusted Capital Account.

(f)            Notwithstanding anything to the
contrary in this Agreement, the General Partner may make adjustments to the
Capital Accounts of the Partners as

 

18

 

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 Partners’ respective shares of
items attributable to Carried Interest Revenue under Section 5.3(b), and such
nonrecourse liabilities shall be allocated among the Partners 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 Partnership items of income, gain, loss, deduction, credit
or other tax matters shall be made by the General Partner in any manner that
reasonably reflects the purpose and intention of this Agreement.  The Partnership shall make such elections
pursuant to the provisions of the Code (including Section 754 of the Code) as
the General Partner, in its sole and absolute discretion, determines to be
appropriate.

5.8           Safe Harbor Election and
Forfeiture Allocations.

(a)           The General Partner is hereby
authorized and directed to cause the Partnership to make an election to value
the interests in the Partnership issued or transferred as compensation for
services to the Partnership, the General Partner, 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 Partnership and on all of its Partners 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 General Partner as permitted by the
Proposed Rules or any applicable rule.

(c)           Each Partner, 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 General Partner shall file or
cause the Partnership 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.

 

19

 

(e)           The General Partner is hereby
authorized and empowered, without further vote or action of the Partners, 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
Partner.

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

(g)           No transfer, assignment or other disposition
of any interest in the Partnership by a Partner 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 General
Partner.

(h)           Notwithstanding anything to the
contrary in this Article 5, upon a forfeiture of any Compensatory Interest by
any Partner, gross items of income, gain, loss or deduction shall be allocated
to such Partner 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 Partnership interests are recognized under Code Section 704(b).

5.9           Allocations and Distributions on
Transfer of Compensatory Interests from the Company Controlled Limited Partner.  In the event that the Company Controlled
Limited Partner 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 Limited Partner, as necessary so that the Company Controlled
Limited Partner receives sufficient allocations and distributions to provide
the Company Controlled Limited Partner 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 Partnership 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.

(ii)           Subject to Section 5.9(i) and
once the allocations or distributions to the Company Controlled Limited Partner
required by

 

20

 

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
Limited Partner 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 General Partner’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 Partners.

(iv)          The General Partner 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
Limited Partner’s transfer of such Compensatory Interests to such transferee.

(v)           Except as otherwise determined by the
General Partner pursuant to Section 5.9(iv), it is intended that any
Compensatory Interests transferred by the Company Controlled Limited Partner in
consideration for services rendered or to be rendered by the transferee to the
Partnership, the General Partner, 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
Limited Partner 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 Limited Partner to the
extent such net loss or items represent a “chargeback” of income or gain
allocated to the Company Controlled Limited Partner for periods prior to the
transfer of such Compensatory Interests.

5.10         Clawback.  Subject to Section 4.6 and within sixty (60)
calendar days after the dissolution of the Fund, each Class B Limited Partner
shall be required to restore funds to the Fund GP in an amount sufficient to
enable the Fund GP to satisfy its obligations to the Fund pursuant to Section
17.7 of the Fund Agreement (the “Aggregate Class B Clawback”).  Each Class B Limited Partner shall be
obligated to fund the portion of the Aggregate Class B

 

21

Clawback equal to the amount of the Aggregate Class B Clawback
multiplied by the quotient of (i) the aggregate amount of Carried Interest Distributions
which have been allocated and/or paid (including funded into escrow pursuant to
Section 5.1(a)(i) hereof) to such Class B Limited Partners pursuant to this
Agreement without taking into consideration the clawback contemplated by this
Section 5.10 divided by (ii) the aggregate amount of Carried Interest Distributions
which have been allocated and/or paid (including funded into escrow pursuant to
Section 5.1(a)(i) hereof) to all Class B Limited Partners pursuant to this
Agreement without taking into consideration the clawback contemplated by this
Section 5.10.  Any actions taken by the
General Partner or the Partnership pursuant to this Section 5.10 shall be in
addition to, and not in limitation of, any other rights or remedies that the
Partnership or the General Partner may have against the Class B Limited Partner
due to any default hereunder, including the right to hold the Class B Limited
Partner responsible for any damages or liabilities (including attorneys’ fees
and expenses) to which the Partnership or the General Partner may be subjected
(in whole or in part) as a result of such default by the Class B Limited
Partner.

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

6.1           Cessation of Employment; Limited
Partner Withdrawal.

(a)           In the event that (x) an Employee
Limited Partner fails to fund his Capital Commitment (and provided that such
default has not been cured by the Defaulting Partner, together with the payment
of interest in accordance with Section 4.6(b), within such five (5) Business
Day period) or (y) an Employee Limited Partner or its Reference Employee ceases
to be employed by Capmark Financial Group Inc., the Partnership, the Fund, the
Fund GP, the General Partner or any of their Affiliates for any reason,
including, without limitation, death, termination of employment by the Employee
Limited Partner or its Reference Employee or termination of the Employee
Limited Partner’s or its Reference Employee’s employment by Capmark Financial
Group Inc., the Partnership, the Fund, the Fund GP, the General Partner or any
of their Affiliates, either with or without cause, bankruptcy, retirement or
disability, or an Employee Limited Partner 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 Limited Partner or its
Reference Employee and any assignee of such Employee Limited Partner or its
Reference Employee (each of which is referred to as a “Former Partner”), if
any, shall immediately cease to have any right to approve, vote on or consent
to any matter submitted to the Employee Limited Partners for their approval,
vote or consent;

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

 

22

(iii)          any unvested portion of the Carried
Interest Percentage held by the Former Partner shall be immediately transferred
to the Company Controlled Limited Partner, 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
Partner as a result of termination of employment  for Cause, (b) an estate planning vehicle
established for such Employee Limited Partner or its Reference Employee has
beneficiaries other than the Employee Limited Partner or its Reference
Employee, his or her spouse or his or her lineal descendents, or (c) the Former
Partner violates any provision of any confidentiality or non-disparagement
agreement by and between the Former Partner and Capmark Financial Group Inc.,
the Partnership, the Fund, the Fund GP, the General Partner or their Affiliates
or any employment agreement by and between the Former Partner and Capmark
Financial Group Inc., the Partnership, the Fund, the Fund GP, the General
Partner 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 Partner’s Carried Interest Percentage,
including the vested and unvested portion thereof, and such Former Partner
shall forfeit such Carried Interest Percentage without any consideration being
paid to such Former Partner by the Partnership or the General Partner therefor.

(c)           With respect to a Former Partner that
leaves without Good Reason, the Carried Interest Percentage held by the Former
Partner, if any, shall thereafter be deemed to equal only the vested portion of
such Carried Interest Percentage (i.e., if the Former Partner 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 Partner immediately following the Cessation Event would be 1%) and the
Former Partner shall be entitled to 100% of the Partnership distributions of
Carried Interest Revenue with respect to the Former Partner’s Carried
Interest Percentage distributed
prior to the Cessation Event and only to that portion of the Partnership’s distributions
of Carried Interest Revenue distributed following the Cessation Event that corresponds to the Former Partner’s
vested Carried Interest Percentage (as determined pursuant to Section 6.2
below) subject to the right of the Partnership 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 Partnership notifies the Former Partner of its election to
purchase such Carried Interest Percentage) will equal the Former Partner’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
Partnership without any consideration being paid therefor.

(d)           With respect to a Former Partner that
is removed without Cause or leaves for Good Reason, the Carried Interest
Percentage held by the Former Partner, 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 Partner is removed without 

 

23

 

Cause or leaves for Good Reason on or before the first
anniversary of any Change in Control, vesting shall be accelerated), and the
Former Partner shall be entitled to 100% of the Partnership’s distributions of
Carried Interest Revenue with respect to the Former Partner’s Carried
Interest Percentage distributed
prior to the Cessation Event and only to that portion of the Partnership’s distributions
of Carried Interest Revenue distributed after the Cessation Event that corresponds to the Former Partner’s
vested Carried Interest Percentage (as determined pursuant to Section 6.2
below) subject to the right of the Partnership 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 Partnership notifies the
Former Partner of its election to purchase such Carried Interest Percentage)
will equal the Former Partner’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 Partnership without any
consideration being paid therefor.

(e)           Notwithstanding anything to the
contrary above, upon the death, permanent disability or retirement of a Limited
Partner or its Reference Employee, the Carried Interest Percentage held by the
such Former Partner, if any, shall thereafter be deemed to equal only the
vested portion of such Carried Interest Percentage and the Former Partner shall
be entitled to 100% of the Partnership’s distributions of Carried Interest
Revenue with respect to the Former Partner’s Carried Interest Percentage distributed prior to the Cessation Event
and only to that portion of the Partnership’s distributions of Carried
Interest Revenue distributed after the Cessation Event that corresponds to the Former Partner’s
vested Carried Interest Percentage (as determined pursuant to Section 6.2
below) subject to the right of the Partnership 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 Partnership notifies the
Former Partner of its election to purchase such Carried Interest Percentage)
will equal the Former Partner’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 Partnership without any
consideration being paid therefor.

(f)            In the event that the vested portion
of a Former Partner’s Carried Interest Percentage is forfeited pursuant to
Section 6.1(b), then such Former Partner shall immediately cease to be entitled
to receive any Carried Interest Distributions, and such Former Partner 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 Sections 4.1 and 5.10.

6.2           Vesting.  Twenty percent (20%) of each Employee Limited
Partner’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 Limited Partner or its Reference
Employee, subject to the cessation of vesting described in Section 6.1.

 

24

 

Accordingly, (i) if no Cessation Event has occurred at
any time prior to the first anniversary of the Commencement Date, an Employee
Limited Partner’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 Limited Partner’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 Limited Partner’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 Limited Partner’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 Limited Partner’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 Limited Partner’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 Limited Partner 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 Limited
Partner to reflect the Commencement Date of such subsequent Employee Limited
Partner or its Reference Employee. Notwithstanding the foregoing, (i) the
General Partner and any Employee Limited Partner may mutually agree to a
different vesting schedule, in which case such vesting schedule shall be set
forth on Schedule A for such Employee Limited Partner; (ii) from time to time,
the General Partner, in its sole and absolute discretion, may accelerate the
vesting of any Employee Limited Partner’s Carried Interest Percentage, (iii) upon
the dissolution and liquidation of the Partnership pursuant to Article 9, the
Carried Interest Percentage of each Employee Limited Partner shall
automatically be deemed to be fully vested at that time for all purposes and
(iv) in the event that an Employee Limited Partner 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 Partner’s Carried Interest Percentage
shall accelerate, and all the Carried Interest Percentage of such Former
Partner shall automatically be deemed to be fully vested at that time for all
purposes.

7.     Transfers of
Limited Partnership Interests; Withdrawal

7.1           Assignability of Interests. 

(a)           Except
as specifically provided in this Agreement, no Employee Limited Partner or its
Reference Employee will be required to involuntarily transfer any interest in
the Partnership, Capital Interest Percentage or Capital Commitment
Percentage.  Except as specifically
provided by this Agreement, each Employee Limited Partner 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 Partnership, Carried Interest Percentage or Capital Commitment Percentage
otherwise acquired and/or held by the Employee Limited Partner or its Reference
Employee, at any time; provided however, that with the prior consent of the
General Partner, 

 

25

 

which may not be unreasonably withheld, the Employee
Limited Partner or its Reference Employee may transfer its interests in the
Limited Partnership, Carried Interest Percentage or Capital Commitment
Percentage during such time pursuant to one of the following exceptions:

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

(ii)           a transfer upon death or Permanent Disability (as
defined in the Stockholder’s Agreement) of the Employee Limited Partner or its
Reference Employee or a transfer to the executors, administrators, testamentary
trustees, legatees or beneficiaries of a person who has become a Employee
Limited Partner 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 Limited Partner or
its Reference Employee or to any of the Family Members (as defined in the
Stockholder’s Agreement) of such Employee Limited Partner or its Reference
Employee; 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;

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

(v)           transfers permitted by the General Partner.

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

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

 

26

 

7.2           Substitute Limited Partners.  Any Person that acquires an interest in the
Partnership by Assignment from another Limited Partner in accordance with the
provisions of Section 7.1, other than a permitted assignee, may only be
admitted to the Partnership as a substitute Limited Partner with the consent of
the General Partner, in its sole and absolute discretion.  The admission of an assignee as a substitute
Limited Partner shall in all events be conditioned upon the assignee’s written
assumption, in form and substance satisfactory to the General Partner, in its
sole and absolute discretion, of all obligations of the assigning Limited
Partner and the execution of an instrument satisfactory to the General Partner
whereby such assignee becomes a party to this Agreement as a Limited Partner.  Notwithstanding the Assignment of all or any
portion of its interest in the Partnership or the admission of an assignee as a
substitute Limited Partner, 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 Partnership
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 Partnership in connection with the
admission to the Partnership of a substitute Limited Partner shall be borne by
the transferor Limited Partner, unless the General Partner determines
otherwise.

7.3           Legal Representatives.  In the event any Limited Partner shall be
adjudicated bankrupt or be deemed insolvent, or in the event of the winding up
or liquidation of a Limited Partner (such Limited Partner, a “Disabled Limited
Partner”), then (a) the legal representative
of the Disabled Limited Partner shall notify the General Partner in writing of
the happening of any of such events
and (b) the General Partner shall be entitled to acquire all or a portion of
the Disabled Limited Partner’s interest in the Partnership or to offer all or a
portion of the Disabled Limited Partner’s interest in the Partnership to the
other Limited Partners.  The
aggregate consideration payable to the Disabled Limited Partner (or its legal
representative) shall be a cash payment in an amount equal to the portion of
the Disabled Limited Partner’s Estimated Value Capital Account that corresponds
to the Disabled Limited Partner’s interest in the Partnership acquired pursuant
to the preceding sentence.  Each Limited
Partner that acquires all or a portion of the Disabled Limited Partner’s
interest in the Partnership shall be obligated, severally and not jointly, to
pay its pro rata portion of such
aggregate consideration based on the percentage of the Disabled Limited Partner’s
interest in the Partnership acquired by such Limited Partner as compared to the
percentage of the Disabled Limited Partner’s interest in the Partnership
acquired by all Partners.  Any Partner
that acquires all or a portion of a Disabled Limited Partner’s interest in the
Partnership shall also assume the portion of the Disabled Limited Partner’s
Capital Commitment, if any, corresponding to the acquired portion of the
interest in the Partnership and shall pay to the Partnership, concurrently with
the payment of the purchase price to the Disabled Limited Partner (or its legal
representative), an amount representing the portion, if any, of the Disabled
Limited Partner’s Capital Commitment that is then due and unpaid that
corresponds to the acquired portion of the interest in the Partnership of the
Disabled Limited Partner.  Except for the
payment described in the immediately preceding sentence, in no event shall the
acquisition of all or a portion of a Disabled Limited Partner’s interest in the
Partnership by a Partner constitute a Capital Contribution of such
Partner.  In the event that the Partners
collectively acquire less than all of the interest in the Partnership of the
Disabled Limited Partner, the legal representative of such Disabled Limited
Partner shall become an assignee with
respect to such portion of the 

 

27

 

Disabled Limited Partner’s
interest in the Partnership that is not acquired by the Partners
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 Partnership of a Limited Partner in the Partnership, 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
Partnership assigned.

7.5           Additional Requirements.  Notwithstanding the foregoing, as additional
conditions to the validity of any Assignment or transfer of a Limited Partner’s
interest in the Partnership in the Partnership, 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 Partnership 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
Partnership or the Fund under the Code (unless otherwise determined by the
General Partner in its sole and absolute discretion);

(d)           cause the Partnership 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 (i) 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, or (ii) adjustments to distributions payable by the
Fund to the Fund GP pursuant to Section 8.10 of the Fund Agreement.

The General Partner 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 General
Partner, signed by legal counsel reasonably satisfactory to the General
Partner.  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 Partnership pursuant to this Article
 7, distributions pursuant to Article 5 shall be made to the Person
owning the interest in the Partnership at the date of 

 

28

 

distribution, unless the assignor and assignee
otherwise agree and direct the General Partner in a written statement signed by
both the assignor and the assignee.

7.7           Death or Incapacity of a Limited
Partner.  Subject to Section 6.2,
notwithstanding anything herein to the contrary, upon the death or incapacity
of a Employee Limited Partner, such Employee Limited Partner’s interests in the
Partnership shall be immediately assigned to the legal representative of such
Employee Limited Partner.  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 Partnership assigned.

7.8           Pledged Interest.  In the event that the General Partner
consents to any pledge of or encumbrance on all or any part of a
Partner’s interest in the Partnership (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 Partner under the document creating
the pledge or encumbrance or upon such Partner becoming a “Defaulting Partner”
under this Agreement (i) the General Partner may elect to cause the Partnership
to accept an assignment of the Pledged Interest subject to such pledge or
encumbrance, and the Partnership must accept such assignment unless the General
Partner, in its sole and absolute discretion, declines to accept such assignment;
and (ii) if the Partnership accepts such assignment of the Pledged Interest,
the Partnership 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 Partners and even if such value fluctuates from time
to time); and (b) neither the Partnership, nor any asset of the Partnership
(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 Limited Partner.  No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, which
consent may be withheld in its sole and absolute discretion.  A Limited Partner that withdraws pursuant to
this Section 7.9 shall cease to have any rights under this Agreement or with
respect to the Partnership.

8.     Admission of
Partners

New Partners may be admitted to the Partnership only
in connection with transfers of interests made in accordance with Article 7 of
this Agreement.  Any new Partners shall
execute a counterpart to this Agreement and such other instruments as the
General Partner may deem necessary or appropriate to confirm the undertaking of
such new Partner to be bound by all the terms and provisions of this
Agreement.  The General Partner shall
revise the applicable page of Schedule A attached hereto as
necessary to reflect such admission.

 

29

 

9.     Rights and
Obligations of the Limited Partners

9.1           Limited Liability.

(a)           A Limited Partner that receives the
return of any part of its Capital Contribution shall be personally liable to
the Partnership 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 Limited Partners shall not otherwise be liable to the Partnership for
the repayment, satisfaction, or discharge of the Partnership’s debts,
liabilities or obligations.  Except as
provided in this Agreement, including, without limitation, Section 4.2, no
Limited Partner shall have any obligation to contribute money in excess of such
Limited Partner’s Capital Commitment.  No
Limited Partner shall be personally liable to any third party for any liability
or other obligation of the Partnership.

(b)           To the extent required by the Act or
other applicable law, a Partner may, under certain circumstances, be required
to return amounts previously wrongfully distributed to such Partner.  It is the intent of the Partnership that, in
connection with any distribution to any Partner, except as provided in Section 9.1(a)
or this Section 9.1(b) or under the Act or other applicable law, no Partner
shall be obligated to pay or return any such amount to, or for the account of,
the Partnership or any creditor of the Partnership.  The payment of any such money or distribution
of any such property to a Partner, 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
Partner receiving any such money or property shall not be required to return
any such money or property to the Partnership or any creditor of the
Partnership.  However, if any court of
competent jurisdiction holds that, notwithstanding the provisions of this Agreement,
any Partner is obligated to make any such payment, such obligation shall be the
obligation of such Partner and not of the Partnership or the General Partner.

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

9.3           Voting Rights of Limited Partners.

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

 

30

 

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

9.4           General Release.  Each Partner, jointly and severally, hereby
agrees to release each of the General Partner, the Partnership, the Fund GP,
the Fund, the Company Controlled Limited Partner, 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 Partner as a result
of any actions or omissions taken or omitted by each of the Released Parties in
connection with providing services to the Partnership or the performance of the
General Partner’s duties under this Agreement or by reason of any action or
omission taken or omitted on behalf of the Partnership.  Such release shall cover, without implied
limitation, any past or present claims by any Partner 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
Partnership, the General Partner, the Fund, the Fund GP, any subsidiary or
Affiliate of any of the foregoing or any Investment or the business or
operations of the General Partner, the Partnership, 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 Limited Partner (“Confidential Information”) shall be received and
maintained in confidence by such Employee Limited Partner.

(b)           Confidential Information may be used
by Employee Limited Partners or their Reference Employees only for the purpose
of monitoring their investments in the Partnership (the “Permitted Purpose”).  The Employee Limited Partners 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 Limited Partner 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 Limited Partner 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 Limited Partner or its Reference
Employee to the extent such disclosure is required by any governmental or
regulatory authority or court entitled by law to such 

 

31

 

disclosure, or that is required by law to be
disclosed, provided that such Employee Limited Partner or its Reference
Employee promptly notifies the General Partner when such requirement to
disclose arises to enable the General Partner to seek an appropriate protective
order and to make known to such governmental or regulatory authority or court
the proprietary nature of the 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 Limited Partner 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 Limited Partner or
its Reference Employee, (y) subsequently becomes publicly known through no act
or omission by an Employee Limited Partner, its Reference Employee or any
person acting on an Employee Limited Partner or its Reference Employee’s
behalf, or (z) otherwise becomes known to a Employee Limited Partner or its
Reference Employee without breach of this Agreement (other than through
disclosure by the Partnership or the General Partner) or any other contractual,
legal, or fiduciary obligation and is not otherwise subject to any restriction
on disclosure by such Employee Limited Partner or its Reference Employee.  Each Employee Limited Partner or its
Reference Employee agrees (A) to cooperate in any appropriate action that the
General Partner may decide to take to prevent or minimize the disclosure of
such Confidential Information; (B) upon the request of the General Partner, to
immediately return, delete or destroy all Confidential Information, including
all copies or derivations thereof, held by such Employee Limited Partner or its
Reference Employee; and (C) that the misappropriation or unauthorized
disclosure of Confidential Information by a Employee Limited Partner or its
Reference Employee is likely to cause substantial and irreparable damage to the
Partnership, 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 Partnership,
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 Limited Partner or its Reference Employee with his or her employer.

9.6           Non-Disparagement.  Each Employee Limited Partner or its Reference
Employee hereby agrees that he or she shall not disparage the Partnership,
General Partner, the Partnership, 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 Limited Partner 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 Partnership, the General Partner, 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 Partnership, the General Partner, 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.  

 

32

 

The provisions of this Section 9.6 shall
survive the termination of the employment of the Employee Limited Partner 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
Limited Partner or Reference Employee under a separate contract of employment,
the employment of any Employee Limited Partner or Reference Employee may be terminated,
either with or without cause, by Capmark Financial Group Inc., the Partnership,
the General Partner, 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
Limited Partner or its Reference Employee’s employment with the Partnership,
the General Partner, the Fund, the Fund GP, any subsidiary or Affiliate of any
of the foregoing.

10.  Duration and
Termination of the Partnership

10.1         Duration and Dissolution.  The Partnership shall continue until the
earliest of (a) the date on which the General Partner elects to dissolve the
Partnership, (b) six (6) months after the date on which the Fund has been
dissolved and completely liquidated in accordance with the Fund Agreement and
all of the Fund GP’s deficit restoration and contribution obligations pursuant
to Article XVII of the Fund Agreement have been satisfied or expired, and (c)
the entry of a decree of judicial dissolution pursuant to the Act.

10.2         Bankruptcy of Limited Partner.  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 Limited Partner shall not
cause the dissolution or termination of the Partnership.

10.3         Effect of Admission or Withdrawal of
Limited Partner.  In the event that a
new Limited Partner is admitted to the Partnership or if any Limited Partner
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 Limited
Partner, such event shall not cause the dissolution or termination of the
Partnership.

11.  Liquidation of
the Partnership

11.1         General.  Upon the dissolution of the Partnership, the
Partnership shall be liquidated in accordance with this Article 11 and the
Act.  The dissolution, liquidation and
termination shall be conducted and supervised by the General Partner (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 Partnership in
connection with the dissolution, liquidation and termination of the Partnership
that the General Partner has with respect to the assets and liabilities of the
Partnership during the term of the Partnership, 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 Partnership and the
transfer of any assets or liabilities of the Partnership.  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 

 

33

 

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 Partnership as promptly as shall be practicable after
the dissolution of the Partnership’s term, consistent with realizing the value
of Partnership assets.  Without limiting
the rights, powers, and authority of the Liquidating Agent as provided in this
Section 11.1, any Partnership 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.

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 Partnership to all creditors of the Partnership (including, without
limitation, any liability to any Partner);

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

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

(e)           The balance, if any, to the Partners
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 Partnership 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 Partnership assets
(other than reserves) and effect distributions to the Partners within one
hundred and eighty (180) days after the date of dissolution of the Partnership.

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

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

 

34

12.  Books and
Records; Tax Matters

12.1         Books and Accounts.  Complete and accurate books and accounts
shall be kept and maintained for the Partnership at its principal place of
business (or such other location as established by the General Partner 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 General Partner determines is necessary to properly reflect the operations
of the Partnership.  Each Limited Partner
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 Partnership upon reasonable prior written notice to the General
Partner, for any purpose reasonably related to the Limited Partner’s interest
as a Limited Partner.

12.2         Records Available.  The General Partner shall maintain at the
Partnership’s principal office the following documents: (i) a current list of
the full name and last known business address of each Partner, (ii) a copy of
the Certificate (iii) copies of all of the Partnership’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 Partner during
ordinary business hours upon reasonable prior notice to the General Partner,
for any purpose reasonably related to the Partner’s interest as a Partner.  Except to the extent requested by a Limited
Partner, the General Partner shall have no obligation to deliver or mail a copy
of the Partnership’s Certificate to the Limited Partners.

12.3         Tax Matters Partner; Filing of Returns.

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

(b)           The Partnership shall use reasonable
efforts to deliver to each Limited Partner 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
Partnership 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 General Partner may designate as the taxable year of the
Partnership, consistent with the requirements of the Code.

12.5         Tax Consequences to U.S. Taxpayers.  Each Limited Partner hereby agrees that such
Limited Partner has reviewed with its own tax advisors the tax consequences of
this Agreement and the acquisition of any interest in the Partnership.  Such Limited Partner is relying solely on
such advisors and not on any statements or representations of the Partnership
or any of its Affiliates or of their agents or representatives.  Such Limited Partner understands that 

 

35

 

he, she or it (and not the Partnership) shall be
responsible for his, her or its own tax liability that may arise as a result of
the transactions contemplated by this Agreement.

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

(b)           ELECTION UNDER CODE SECTION
83(b).  EACH PARTNER HEREBY ACKNOWLEDGES
THAT IT IS HIS, HER OR ITS SOLE RESPONSIBILITY AND NOT THE RESPONSIBILITY OF
THE PARTNERSHIP OR THE PARTNERSHIP’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 PARTNER DESIRES TO FILE WITH
RESPECT TO ITS INTEREST IN THE PARTNERSHIP, EVEN IF SUCH PARTNER REQUESTS THE
PARTNERSHIP, OR ITS AGENTS OR REPRESENTATIVES, TO MAKE THIS FILING ON SUCH
PARTNER’S BEHALF.

13.  Power of
Attorney

13.1         General.

(a)           Each Limited Partner irrevocably
constitutes and appoints the General Partner and each partner of the General
Partner and each Liquidating Agent the true and lawful attorney-in-fact of such
Limited Partner 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 Partnership 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 Partnership under the laws of the
United States, the State of Delaware or any other jurisdiction, or (B) which
the General Partner shall deem necessary to file to effect the winding-up or
termination of the Partnership; 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 General Partner considers necessary or desirable to
carry out the purposes of this 

 

36

 

Agreement and the business of the Partnership,
provided, that no such certificate or instrument shall have the effect of
amending this Agreement.

(b)           It is expressly acknowledged by each Limited Partner
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 Limited Partner of its Partnership
interest; provided, however, that if a Limited Partner shall assign all of its
interest in the Partnership and the assignee shall, in accordance with the
provisions of this Agreement, become a substitute Limited Partner, such power
of attorney shall survive such Assignment only for the purpose of enabling the
General Partner to execute, acknowledge, swear to and file any and all
instruments necessary to effect such substitution.

14.  Compensation of
the General Partner and Partnership Expenses

14.1         No Compensation.  The General Partner shall not be entitled to
receive any compensation as a result of General Partner acting in such capacity
for the Partnership.

14.2         Partnership Expenses.  The General Partner shall bear all
Partnership expenses and reserves for such expenses, including the following
expenses:

(a)           all reasonable costs incurred by the
General Partner, an Affiliate of the General Partner that are related to the
Partnership’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 Partners, the costs of any third
parties and any Affiliate of the General Partner, retained to provide necessary
services relating to the assets held by the Partnership, 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
General Partner or an Affiliate of the General Partner in connection with
operating the Partnership, or performing the duties of the General Partner
under this Agreement, other than (i) office overhead of the General Partner or
(ii) compensation of the General Partner’s employees.

To the
extent that expenses to be borne by the General Partner are paid by the
Partnership, the General Partner shall reimburse the Partnership for such
expenses.

15.  Miscellaneous

15.1         Further Assurances.  The Partners agree to execute such
instruments and documents as may be required by the Act or by law or which the
General Partner 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 Limited Partners under this Agreement.

 

37

 

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 Partners, in which case the
Partners shall use their best efforts to make such changes or adjustments in
this Agreement as would restore the respective economic interests of the
Partners 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 General Partner may
amend, modify or waive any provision of this Agreement at any time, in its sole
and absolute discretion, without the consent of any Partner; provided, however, that no such
amendment, modification or waiver shall, except as otherwise specifically
permitted by this Agreement, (i) increase any Limited Partner’s Capital
Commitment or the liability of any Limited Partner under this Agreement for the
obligations of the Partnership, or (ii) except as specifically permitted by
this Agreement, reduce the Carried Interest Percentage of any Class B Limited
Partner or the Capital Commitment Percentage of any Class A Limited Partner,
without, in each case, such Limited Partner’s written consent.  No amendment, modification or waiver of any
provision of this Agreement may be made without the prior written consent of
the General Partner.  The General Partner
shall provide written notice to all Partners 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.

 

38

 

15.9         Force Majeure.  Whenever any act or thing is required of the
Partnership or the General Partner hereunder to be done within any specified
period of time, the Partnership or the General Partner, 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 Partnership or the General Partner, 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 Partnership or the General Partner 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 Partnership or the General Partner, to the Partnership’s
principal office determined pursuant to Section 2.4 hereof, and if
intended for any Limited Partner to the address of such Limited Partner set
forth on its Limited Partner Signature Page, or to such other address as such
Partner may designate 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 Partner and no successor-in-interest
to any Partner shall have the right while this Agreement remains in effect to have
the property of the Partnership partitioned, or to file a complaint or
institute any proceeding at law or in equity to have the property of the
Partnership partitioned or, except on such terms and conditions as the General
Partner may, in its sole and absolute discretion, approve, to require the
redemption of its interest in the Partnership.

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
Partnership or any of its Partners, except for Partners, 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 Partnership or any Partner.

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

 

39

 

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 Partnership 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]

 

40

 

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

	
   

  	
  GENERAL PARTNER

  
	
   

  	
   

  	
   

  
	
   

  	
  Capmark Carried
  Interest, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda Pickles

  
	
   

  	
  Name:

  	
  Linda Pickles

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  LIMITED PARTNERS

  
	
   

  	
   

  	
   

  
	
   

  	
  See Signature Pages Attached Hereto

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