Document:

EX-10.11 Woodbridge Executive Compensation Program

Exhibit
10.11

AGREEMENT OF LIMITED PARTNERSHIP

OF

WOODBRIDGE EXECUTIVE INCENTIVE PLAN 1, LP

Date: March 13, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I GENERAL PROVISIONS	 	 	1	 
	 	1.1	 	 	Formation

	 	 	1	 
	 	1.2	 	 	Name

	 	 	1	 
	 	1.3	 	 	Purpose

	 	 	1	 
	 	1.4	 	 	Principal Office

	 	 	2	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II DEFINITIONS; DETERMINATIONS	 	 	2	 
	 	2.1	 	 	Definitions

	 	 	2	 
	 	2.2	 	 	Determinations

	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III INVESTED CAPITAL; CAPITAL ACCOUNTS	 	 	6	 
	 	3.1	 	 	Invested Capital

	 	 	6	 
	 	3.2	 	 	Future Contributions

	 	 	6	 
	 	3.3	 	 	Capital Accounts

	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV DISTRIBUTIONS	 	 	6	 
	 	4.1	 	 	Distribution Policy

	 	 	6	 
	 	4.2	 	 	Distributions of Net Proceeds

	 	 	8	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V GENERAL PARTNER	 	 	11	 
	 	5.1	 	 	Management Authority

	 	 	11	 
	 	5.2	 	 	No Liability to Partnership or Limited Partners

	 	 	12	 
	 	5.3	 	 	Indemnification

	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI LIMITED PARTNERS	 	 	13	 
	 	6.1	 	 	Limited Liability

	 	 	13	 
	 	6.2	 	 	No Participation in Management

	 	 	13	 
	 	6.3	 	 	Transfer of Limited Partnership Interests

	 	 	13	 
	 	6.4	 	 	No Termination

	 	 	14	 
	 	6.5	 	 	Additional Limited Partners

	 	 	14	 
	 	6.6	 	 	Reimbursement for Payments on Behalf of a Partner

	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII DURATION AND TERMINATION	 	 	15	 
	 	7.1	 	 	Term

	 	 	15	 
	 	7.2	 	 	Termination and Liquidation

	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VIII VALUATION OF PARTNERSHIP ASSETS	 	 	16	 
	 	8.1	 	 	Normal Valuation

	 	 	16	 
	 	8.2	 	 	Restrictions on Transfer or Blockage

	 	 	16	 

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	 	 	 	 	 	 	Page
	ARTICLE IX BOOKS OF ACCOUNTS; MEETINGS	 	 	17	 
	 	9.1	 	 	Books

	 	 	17	 
	 	9.2	 	 	Fiscal Year

	 	 	17	 
	 	9.3	 	 	Reports

	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS	 	 	17	 
	 	10.1	 	 	Amendments

	 	 	17	 
	 	10.2	 	 	Successors

	 	 	18	 
	 	10.3	 	 	Governing Law; Severability

	 	 	18	 
	 	10.4	 	 	Notices

	 	 	18	 
	 	10.5	 	 	Arbitration

	 	 	18	 
	 	10.6	 	 	Miscellaneous

	 	 	19	 
	 	10.7	 	 	No Third Party Beneficiaries

	 	 	19	 

     -ii-     

 

 

AGREEMENT OF LIMITED PARTNERSHIP

OF

WOODBRIDGE EXECUTIVE INCENTIVE PLAN 1, LP

     THIS AGREEMENT OF LIMITED PARTNERSHIP is dated as of March 13, 2009 (the “Effective
Date”) between the General Partner and the Limited Partners (as defined below).

     WHEREAS, the Partnership (as defined below) was formed pursuant to (a) the Certificate (as
defined below);

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

GENERAL PROVISIONS

1.1 Formation

     The Partners hereby agree to form a limited partnership (the “Partnership”) pursuant
to and in accordance with the Florida Revised Uniform Limited Partnership Act of 2005, as amended
from time to time (the “Partnership Act”). The term of the Partnership (the
“Term”) commenced upon the filing of the Certificate of Limited Partnership (the
“Certificate”) with the Secretary of State of Florida (the date of such filing is referred
to herein as the date of “formation” of the Partnership) and shall continue until dissolution and
termination of the Partnership in accordance with the provisions of ARTICLE VII hereof.

1.2 Name

     The name of the Partnership shall be Woodbridge Executive Incentive Plan 1, LP, or such other
name or names as the General Partner may designate from time to time.

1.3 Purpose

     The Partnership is organized for the principal purpose of (i) serving as the “Residual
Partner” or similar partner or member entitled to receive Carried Interest Distributions from one
or more of the following: (1) PF Program Partnership, LP, (2) Core Communities, LLC, (3) CCCH
Program Partnership 1, LP, (4) Bluegreen Program Partnership, LP, (5) ODI Program Partnership,
LLLP, and (6) Snapper Creek Program Partnership 1, LP, and any other partnership (or other entity)
established by Woodbridge that is expected to substantially complete its investment phase by
December 31, 2010 (each a “Program Partnership,” and collectively, the “Program
Partnerships”); and (ii) engaging in such other activities incidental or ancillary thereto as
the General Partner deems necessary or advisable.

 

 

1.4 Principal Office

     The General Partner shall maintain a principal office in Fort Lauderdale, Florida, or at such
other place or places as the General Partner may from time to time designate.

ARTICLE II

DEFINITIONS; DETERMINATIONS

2.1 Definitions

     Capitalized terms used in this Agreement have the meanings set forth below or as otherwise
specified herein:

     “Agreement” means this Agreement of Limited Partnership of Woodbridge Executive
Incentive Plan 1, LP, as amended or modified from time to time in accordance with its terms.

     “Alternative Clawback Reserve” has the meaning set forth in Section 4.2(b).

     “Capital Account” is the account established for each Partner in accordance with the
provisions of Appendix A hereto.

     “Carried Interest Distributions” means those amounts distributed to the Partnership as
a result of the Partnership’s right to receive amounts designated as “Carry Distributions” in a
Program Partnership’s governing documents or similar distributions of profits for services rendered
to or for the benefit of any individual Program Partnership. For the avoidance of doubt, the
amount of Carried Interest Distributions received from any single Program Partnership will be
determined pursuant to the provisions and terms of any partnership agreement governing such Program
Partnership.

     “Cause Event” means, with respect to any Limited Partner, the commission of: (a) any
act or omission constituting gross negligence, willful misconduct, or fraud in the performance of
his or her duties or obligations as an employee of the applicable Woodbridge Employer, (b) any
material breach of any agreement between the Limited Partner and the applicable Woodbridge
Employer, (c) any willful refusal to perform a duty as directed by the applicable Woodbridge
Employer if such duty is within the scope of such Limited Partner’s duties to the applicable
Woodbridge Employer, or (d) any crime resulting in a conviction, whether or not involving the
applicable Woodbridge Employer, which constitutes a felony in the jurisdiction involved (other than
motor vehicle felonies for which only a non-custodial penalty is imposed).

     “Certificate” has the meaning set forth in Section 1.1.

     “Clawback Reserve” has the meaning set forth in Section 4.2(b).

     “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

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     “Covered Party” means each of the Partners, a director, officer, partner, or member
(or a former director, officer, partner or member) of any Partner, and to the extent approved by
the General Partner in its sole discretion, any other employee of a Partner or an agent acting at
the direction of the General Partner, and in any such case, the heirs and legal representatives of
any such person.

     “Effective Date” has the meaning set forth in the Recitals.

     “Fair Market Value” of a security or a Program Asset means the amount that would be
realized if such security or Program Asset had been sold at its “value” (determined in accordance
with Article VIII).

     “Family Related Partner” means, with respect to any Limited Partner, any Person who is
a spouse or lineal descendent of the parents of such Limited Partner or any Person which is a trust
formed by such Limited Partner for investment by or for the benefit of such Limited Partner’s
spouse or any lineal descendants of the parents of such Limited Partner or of such Limited
Partner’s spouse and/or any charitable organization; provided that any cause of action or
other dispute arising in relation to a Family Related Partner’s interest may only be pursued by the
Limited Partner associated with such Family Related Partner, except if such Limited Partner has
died or become legally incapacitated. For the avoidance of doubt, a Family Related Partner’s
Vested Percentage shall be equivalent to the Vested Percentage of the Limited Partner associated
with such Family Related Partner.

     “GAAP” has the meaning set forth in Section 9.3.

     “General Partner” means Woodbridge Fund I, LLC, in its capacity as general partner of
the Partnership, and any successor general partner of the Partnership.

     “Impairment” means, with respect to a Program Asset, a determination by the General
Partner that the Program Asset is not expected to be able to provide to the Program Partnership
that invested in such Program Asset a return of its capital invested in that Program Asset and a
10% compounded annual return thereon, determined by capitalizing the portion of expenses of the
Program Partnership that are deemed allocable to such Program Asset. The General Partner’s
determination that a Program Asset has suffered an Impairment for purposes of this Agreement shall
be independent of any determination that the value of the Program Asset is reduced for purposes of
the financial statements prepared under generally accepted accounting principles.

     “Initial Investment Date” means, with respect to a Program Partnership, the date
Woodbridge first made a contribution to the capital of such Program Partnership.

     “Invested Capital” has the meaning set forth in Section 3.1.

     “Investment Proceeds” means the gross investment returns (whether in the form of cash,
securities, or other property) received by a Program Partnership in respect of the Program
Partnership’s investment of capital in any Program Assets (i.e., in its capacity as an investor and
not with respect to the provision of any services with respect to such Program Assets or to any
other investor in such assets). For the avoidance of doubt, the amount of Investment Proceeds
shall be determined without regard to any management fees, carried interest, or similar deductions
that may be charged by the general partner or manager of the Program Partnership to any investment
vehicle through which such Program Partnership holds any of its investments.

-3-

 

     “Limited Partners” means any Persons designated as Limited Partners on Schedule
I hereof, in their capacities as limited partners of the Partnership, or any other Persons that
are admitted as Limited Partners in accordance with the terms hereof, in each case for so long as
such Persons continue to be Limited Partners hereunder, and “Limited Partner” shall mean
each of such Persons individually.

     “Net Proceeds” has the meaning set forth in Section 4.1(a).

     “Overall Hurdle Clawback” has the meaning set forth in Section 4.2.

     “Partners” means collectively the General Partner, the Limited Partners, and any other
Person that is admitted to the Partnership as a partner in accordance with the terms hereof, and
“Partner” shall mean each of such persons individually.

     “Partnership” has the meaning set forth in Section 1.1.

     “Partnership Act” has the meaning set forth in Section 1.1.

     “Percentage Interest” means, with respect to the General Partner, 10%, and, with
respect to each Limited Partner, the percentage interest as set forth for such Limited Partner on
Schedule I hereof, which may vary, as determined by the General Partner, for each Program
Partnership, and which will be adjusted by the vesting and forfeiture provisions described in
Article IV. For the avoidance of doubt, a Limited Partner’s Percentage Interest in a
Program Partnership that is not a Tenured Program with respect to such Limited Partner shall be 0%.

     “Person” means an individual, a partnership (general, limited, or limited liability),
a corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental, quasi-governmental, judicial, or
regulatory entity or any department, agency, or political subdivision thereof.

     “Program Assets” means those assets held by a Program Partnership as part of its
investment program, and “Program Asset” shall mean each of such Program Assets
individually.

     “Program Clawback Obligation” means the obligation of the Partnership, as the
recipient of Carried Interest Distributions from a Program Partnership, to refund a proportionate
share of the Carried Interest Distributions received in accordance with the terms of the limited
partnership agreement governing such Program Partnership.

     “Program Partnership” has the meaning set forth in Section 1.3.

     “Reimbursing Partner” has the meaning set forth in Section 6.6(a).

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     “Reserve Distributions” has the meaning set forth in Section 4.2(b).

     “Tenured Program” means, with respect to any Limited Partner, each Program Partnership
which has an Initial Investment Date during the period when such Person was a Limited Partner (and
not a Terminated Limited Partner), or any other Program Partnership in which such Person has been
granted a Percentage Interest by the General Partner. For the avoidance of doubt, a Limited
Partner will not receive a Percentage Interest with respect to any Program Partnership that is not
a Tenured Program with respect to such Limited Partner.

     “Term” has the meaning set forth in Section 1.1.

     “Terminated Limited Partner” means any Limited Partner whose employment with the
Woodbridge Employer is terminated for any reason, whether voluntarily or involuntarily, and with or
without cause. In the General Partner’s discretion, a Limited Partner whose employment with the
Woodbridge Employer is terminated contemporaneously with such Limited Partner becoming employed by
another entity within Woodbridge shall not be treated as having been terminated, and the new
employer shall become the Woodbridge Employer for purposes of this definition. For purposes of
this Agreement, in the case of any Family Related Partner, the termination of employment with the
Woodbridge Employer of the Limited Partner with whom such Family Related Partner is associated
shall cause such Family Related Partner to become a Terminated Limited Partner.

     “Transfer” means a transfer in any form, including a sale, assignment, conveyance,
pledge, mortgage, encumbrance, hypothecation, exchange, gift, or other disposition, or the act of
so doing, whether voluntarily, by operation of law, pursuant to judicial process, or otherwise as
the context requires.

     “Vested Percentage” has the meaning set forth in Section 4.1(d).

     “Woodbridge” means Woodbridge Holdings Corporation or any direct or indirect
subsidiary of such corporation.

     “Woodbridge Employer” means, with respect to any Limited Partner, the entity within
Woodbridge that is the employer of such Limited Partner.

2.2 Determinations

     Unless otherwise indicated, any determinations or calculations conducted pursuant to this
Agreement shall be determined or calculated as of the date of such determination or calculation.

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ARTICLE III

INVESTED CAPITAL; CAPITAL ACCOUNTS

3.1 Invested Capital

     As of the Effective Date, each Partner shall contribute $250 to the capital of the Partnership
(“Invested Capital”). The right of each Limited Partner to receive Net Proceeds represents
a profits interest received for services rendered or to be rendered to or for the benefit of the
Partnership.

3.2 Future Contributions

     (a) Other than the required Invested Capital described in Section 3.1, any
reimbursement payment pursuant to Section 6.6, or as may be required by applicable law, no
Partner shall have any further obligation to contribute additional Invested Capital to the
Partnership; provided that if there is a Program Clawback Obligation, the General Partner
shall be required to contribute 10% of such amount (reflecting its sharing ratio in the Net
Proceeds of the Partnership) to the Partnership to be used to satisfy such Program Clawback
Obligation to the applicable Program Partnership; and provided further that the General
Partner shall be required to make special distributions to the Partnership to the extent that such
special distributions are necessary to reduce any Limited Partner’s Alternative Clawback Reserve as
described in Section 4.2(d).

     (b) The General Partner, in its discretion, whether or not in connection with the admission of
any new Partner to the Partnership in accordance with Section 6.5, may permit a Partner to
contribute additional Invested Capital to the Partnership under such circumstances as may be
determined by the General Partner.

     (c) The General Partner may cause the Partnership to borrow funds, including from Woodbridge,
under such terms as the General Partner may determine, in order to permit the Partnership to meet
its liquidity needs.

3.3 Capital Accounts

     (a) A capital account (“Capital Account”) shall be maintained for each Partner in
accordance with Appendix A hereto.

ARTICLE IV

DISTRIBUTIONS

4.1 Distribution Policy

     (a) The General Partner shall periodically cause excess cash or cash equivalents held in the
Partnership (“Net Proceeds”) to be distributed to the Limited Partners in accordance with
Section 4.2.

-6-

 

     (b) Distributions may be in the form of cash, property, or securities. Except as otherwise
provided herein, for purposes of this Agreement, an in-kind distribution of non-cash property shall
be treated as if an amount of cash equal to the Fair Market Value of such property had been
distributed.

     (c) The General Partner shall determine the particular Program Partnership or the particular
Program Partnerships that are responsible for generating the Net Proceeds being distributed.

     (d) A Limited Partner’s right to share in the Net Proceeds with respect to a particular
Program Partnership shall be subject to the following vesting provisions. A Limited Partner’s
“Vested Percentage” with respect to a particular Program Partnership shall be the vested
amount with respect to that Program Partnership at the date such Limited Partner becomes a
Terminated Limited Partner.

	 	(i)	 	Distributions or Termination of Program Partnership While
Employed. A Limited Partner will have a Vested Percentage of 100% in all Net
Proceeds received by the Partnership from such Limited Partner’s Tenured
Programs, if those Net Proceeds are received prior to the Limited Partner
becoming a Terminated Limited Partner.
	 
	 	(ii)	 	Termination for Cause. A Limited Partner will have a Vested
Percentage of 0% in all Net Proceeds received by the Partnership from such
Limited Partner’s Tenured Programs, if those Net Proceeds are received after
such Limited Partner has become a Terminated Limited Partner because of the
occurrence of a Cause Event with respect to such Limited Partner.
	 
	 	(iii)	 	Termination Not for Cause. A Limited Partner will have a
Vested Percentage of 75% in all Net Proceeds received by the Partnership from
such Limited Partner’s Tenured Programs, if those Net Proceeds are received
after such Limited Partner has become a Terminated Limited Partner because (A)
the Woodbridge Employer terminated the employment for a reason other than the
occurrence of a Cause Event with respect to such Limited Partner or (B) of the
death, permanent disability, or legal incapacity of such Limited Partner.
	 
	 	(iv)	 	Voluntary Resignation. A Limited Partner will have a Vested
Percentage as determined pursuant to the following sentence in all Net Proceeds
received by the Partnership from such Limited Partner’s Tenured Programs if
those Net Proceeds are received after such Limited Partner has become a
Terminated Limited Partner because the Limited Partner voluntarily left the
employment of the Woodbridge Employer. For purposes of this clause
(iv), the Vested Percentage shall be determined separately for each Program
Partnership and shall equal: (x) 25% upon the Initial Investment Date, and (y)
an additional 12.5 percentage points per
year upon each of the first four anniversaries of the Initial Investment
Date, for a maximum Vested Percentage of 75%.

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	 	(v)	 	For the avoidance of doubt, a Limited Partner’s right to
receive Net Proceeds distributable to such Limited Partner shall be unaffected
by these vesting provisions until such time as the Limited Partner becomes a
Terminated Limited Partner.
	 
	 	(vi)	 	Notwithstanding the foregoing, a Limited Partner will at no
time have the right to receive Net Proceeds with respect to any Program that is
not a Tenured Program with respect to such Limited Partner.

     (e) 83(b) Election. Each Limited Partner shall make a timely election under section 83(b) of
the Code with respect to such Limited Partner’s interest in any Net Proceeds.

4.2 Distributions of Net Proceeds

     (a) Distributions to the Partners. Subject to the holdback provisions of Section
4.2(b) and the provisions regarding a Terminated Limited Partner in Section 4.1(d), Net
Proceeds attributable to a particular Program Partnership shall be distributed as follows:

	 	(i)	 	10% to the General Partner; and
	 
	 	(ii)	 	The remaining 90% to and among the Limited Partners based on
their relative Percentage Interests with respect to the Program Partnership
giving rise to such Net Proceeds.

For purposes of clause (ii) above, if a Limited Partner is, at the time of the
distribution, a Terminated Limited Partner, his or her Percentage Interest with respect to such
Program Partnership shall be reduced by multiplying such Limited Partner’s Percentage Interest by
the Vested Percentage. The General Partner may reallocate the forfeited Percentage Interest to
such other Limited Partners, and in such amounts, as the General Partner may determine. If the
General Partner does not so reallocate such forfeited Percentage Interest, the forfeited Percentage
Interest will automatically be reallocated to each Limited Partner who is not a Terminated Limited
Partner pro rata based on such Limited Partners’ relative Percentage Interests in the applicable
Program Partnership. For the avoidance of doubt, the General Partner is not permitted to
reallocate any of the forfeited Percentage Interest to itself or to any other Woodbridge entity.

     (b) Establishment of Clawback Reserve and Alternative Clawback Reserve.

	 	(i)	 	Notwithstanding the foregoing provisions of this Section
4.2, 25% (adjusted as provided in clause (ii) below) of any Net
Proceeds that are available for distribution to a Limited Partner shall be
withheld by the Partnership, and a separate bookkeeping account (a
“Clawback Reserve”) shall be established for such Limited Partner by
the Partnership for tracking deposits, withdrawals, and interest earned with
respect to such
account. The Clawback Reserve will be increased by amounts moved by a
Program Partnership from an IP Clawback Reserve in accordance with
the terms of the governing agreement of such Program Partnership. The Partnership may aggregate each of the Clawback Reserves within
a single interest-bearing Partnership bank account.

-8-

 

	 	(ii)	 	Each time that the Partnership is to make a distribution of Net
Proceeds earned with respect to a particular Program Partnership, the General
Partner will review the assets within each other Program Partnership to
determine whether any of the assets within such Program Partnerships have
suffered an Impairment that has not been reversed, and if so, the effect that
such Impairment would have on the ability of Woodbridge (in its capacity as an
investor in such Program Partnership) to receive proceeds from the Program
Partnership sufficient to provide Woodbridge with at least a 10% annual
cumulative compounded internal rate of return on its Invested Capital in such
Program Partnership. If the General Partner determines that the Impairment
would prevent the minimum return from being achieved, the percentage of Net
Proceeds to be contributed to the Clawback Reserve may be increased by the
General Partner (but not in excess of 75%) in order to add to the Clawback
Reserve an amount deemed necessary to fund the Overall Hurdle Clawback (as
defined below) that is anticipated to arise because of such Impairment.
	 
	 	(iii)	 	Notwithstanding the foregoing, in the General Partner’s
discretion, rather than depositing amounts in the Clawback Reserve of a Limited
Partner, the General Partner may cause such amounts to be distributed to the
General Partner, which will be credited to a special bookkeeping account (an
“Alternative Clawback Reserve”) for the benefit of such Limited Partner
(such amounts, “Reserve Distributions”). The balance in the
Alternative Clawback Reserve shall be increased from time to time by an
interest factor equal to the interest earned on the Clawback Reserve (or, if
there is no Clawback Reserve, on the rate of interest that the Partnership
would receive on an interest-bearing bank account). In addition, the
Alternative Clawback Reserve will be increased by amounts moved by a
Program Partnership from an Alternative Clawback Reserve in
accordance with the terms of the governing agreement of such Program
Partnership.

     (c) Clawback Obligation and Overall Hurdle Clawback.

	 	(i)	 	Obligations of a Limited Partner.

	 	(A)	 	At the end of the term of each Program
Partnership (as defined in the governing documents applicable to such
Program Partnership), each Limited Partner will be responsible for a
share of any Program Clawback Obligation attributed to a Program
Partnership from which such Limited Partner received Net Proceeds and
any Carry Distributions (as defined by the terms of such Program
Partnership) from such Program Partnership.
Such share will be based on such Limited Partner’s pro rata share of
all proceeds received by all Limited Partners with respect to such Program
Partnership. Each Limited Partner’s share of the Program Clawback
Obligation shall be satisfied as provided below.

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	 	(B)	 	Additionally, at the expiration of the Term of
the Partnership, each Limited Partner will be responsible for a share
of the amount of the additional distributions (the “Overall Hurdle
Clawback”), if any, that would need to be distributed to Woodbridge
so that Woodbridge would have received aggregate distributions with
respect to its interest in the Program Partnerships and this
Partnership (including Reserve Distributions not returned) to provide
it with at least a 10% annual cumulative compounded internal rate of
return on its aggregate Invested Capital (as defined in the partnership
agreements of the relevant Program Partnerships). Each Limited
Partner’s relative share of the Overall Hurdle Clawback will be based
on the aggregate amount of Net Proceeds (including, for this purpose,
any Carry Distributions (as defined by the terms of the Program
Partnerships) from all Program Partnerships) received by the Limited
Partners (and not previously returned pursuant to a Program Clawback
Obligation) over the Term of the Partnership compared to the unreturned
Net Proceeds (modified as described above) received by all Partners. Each Limited Partner’s share of
the Overall Hurdle Clawback shall be satisfied as provided below.

	 	(ii)	 	Obligation of the General Partner. At the expiration of the
Term of the Partnership, the General Partner shall be required to pay to any
Program Partnership an amount equal to the General Partner’s share of the
Program Clawback Obligation of such Program Partnership. The General Partner
shall pay its share by contributing Invested Capital to the applicable Program
Partnership.

     (d) Satisfaction of Obligations.

	 	(i)	 	To satisfy a Limited Partner’s (A) share of the Program
Clawback Obligation and (B) share of the Overall Hurdle Clawback, amounts will
first be taken from such Limited Partner’s Alternative Clawback Reserve, which,
in the case of the Program Clawback Obligation, will be paid to the applicable
Program Partnership, and, in the case of the Overall Hurdle Clawback, will be
retained by the General Partner on behalf of Woodbridge. To the extent such
Limited Partner’s share of either obligation is not satisfied, amounts will be
taken from such Limited Partner’s Clawback Reserve, which, in the case of the
Program Clawback Obligation, will be paid to the applicable Program
Partnership, and, in the case of the Overall Hurdle Clawback, will be specially
distributed to the General Partner on behalf of Woodbridge.
	 
	 	(ii)	 	To the extent amounts in a Limited Partner’s Alternative
Clawback Reserve are not needed to satisfy such Limited Partner’s share of the
Program Clawback Obligation or share of the Overall Hurdle Clawback, an amount
of Net Proceeds that would otherwise be payable to the General Partner equal to
such excess, shall instead be specially distributed to the applicable Limited
Partner without regard to Section 4.2(a)(i), which
distributions will reduce on a dollar-for-dollar basis the amount in such
Limited Partner’s Alternative Clawback Reserve. If the full amount of such
excess cannot be so distributed, the shortfall shall be contributed by the
General Partner to the Partnership for special distribution to the
applicable Limited Partner.

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     (e) Release of Amounts to the Limited Partner.

	 	(i)	 	At the expiration of the Term of the Partnership, amounts in a
Limited Partner’s Clawback Reserve (including any interest earned with respect
to such amounts) not needed to fund any clawback obligation will be released to
the applicable Limited Partner.
	 
	 	(ii)	 	Prior to the expiration of the Term of the Partnership, the
General Partner, in its discretion, may release amounts from a Limited
Partner’s Alternative Clawback Reserve by (A) causing special distributions
reducing such Alternative Clawback Reserve or causing contributions and special
distributions, each as described in clause (d)(ii), or (B) distributing
amounts to a Limited Partner from such Limited Partner’s Clawback Reserve, in
either case to the extent the General Partner determines that such special
distributions or amounts are not necessary to secure any clawback obligation of
such Limited Partner.

     (f) General Provisions Regarding Clawback Obligations.

	 	(i)	 	A Limited Partner’s share of the Overall Hurdle Clawback and
share of any Program Clawback Obligation will be paid only to the extent of the
aggregate amount of such Limited Partner’s Clawback Reserve and Alternative
Clawback Reserve. In no event will a Limited Partner be personally liable for
a clawback obligation that exceeds the aggregate amount of such Limited
Partner’s Clawback Reserve and Alternative Clawback Reserve.
	 
	 	(ii)	 	In no event shall a Limited Partner be responsible for another
Limited Partner’s share of the Overall Hurdle Clawback or for another Partner’s
share of any Program Clawback Obligation.

ARTICLE V

GENERAL PARTNER

5.1 Management Authority

     (a) The management of the Partnership shall be vested exclusively in the General Partner, and
the General Partner shall have full control over the business and affairs of the Partnership. The
General Partner shall have the power on behalf and in the name of the
Partnership to carry out any and all of the objectives and purposes of the Partnership and to
perform all acts and enter into and perform all contracts and other undertakings which the General
Partner, in its reasonable discretion, deems necessary, advisable, or incidental thereto.

-11-

 

     (b) Third parties dealing with the Partnership can rely conclusively upon the General
Partner’s certification that it is acting on behalf of the Partnership and that its acts are
authorized. The General Partner’s execution of any agreement on behalf of the Partnership is
sufficient to bind the Partnership for all purposes.

5.2 No Liability to Partnership or Limited Partners

     No Covered Party shall be liable to the Partnership or any Partner for any action taken, or
failure to act, on behalf of the Partnership (or on behalf of the General Partner with respect to
the Partnership) if such Covered Party (a) acted honestly and in good faith with a view to the best
interests of the Partnership, or, as the case may be, to the best interests of the other entity for
which the Covered Party acted as director, officer, employee, agent, or in a similar capacity at
the request of the General Partner for the benefit of the Partnership; and (b) in the case of a
criminal or administrative action or proceeding that is enforced by a monetary penalty, the Covered
Party had reasonable grounds for believing that the Covered Party’s conduct was lawful. In
addition, any Covered Party who has delegated to any other Person (other than to another Covered
Party) any part of its functions (including participating in the management of or rendering
professional advice or other services in respect of any Program Asset) shall not be liable,
responsible, or accountable in damages or otherwise to the Partnership or to any Partner for any
loss incurred or suffered by reason of any action by such other Person unless the delegating
Covered Party did not (x) act honestly and in good faith with a view to the best interests of the
Partnership, or, as the case may be, to the best interests of the other entity for which the
Covered Party acted as director, officer, employee, agent, or in a similar capacity at the request
of the General Partner for the benefit of the Partnership; and (y) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, have reasonable grounds
for believing that the Covered Party’s conduct was lawful with respect to such delegation. For the
avoidance of doubt, nothing in the immediately preceding sentence shall be deemed to prevent the
Partnership or the General Partner from asserting a cause of action against the delegate of a
Covered Party for any loss caused by the action, or failure to act, of such delegate and the
General Partner shall cause the Partnership to effectively pursue any such cause of action to the
extent it would be in the reasonable best interests of the Partnership to do so.

5.3 Indemnification

     (a) Subject to Section 5.3(c) below, the Partnership shall indemnify each Covered
Party against all costs, charges, and expenses, including an amount paid to settle an action or
satisfy a judgment, reasonably incurred by the Covered Party in respect of any civil, criminal,
administrative, investigative, or other proceeding in which the Covered Party is involved because
of that association with the Partnership or the General Partner, if such Covered Party (a) acted
honestly and in good faith with a view to the best interests of the Partnership or, as the case may
be, to the best interests of the other entity for which the Covered Party acted as director,
officer,
employee, agent, or in a similar capacity at the request of the General Partner for the
benefit of the Partnership; and (b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, the Covered Party had reasonable grounds for
believing that the Covered Party’s conduct was lawful.

-12-

 

     (b) Subject to Section 5.3(c) below, the Partnership shall advance moneys to a Covered
Party for the costs, charges, and expenses of a proceeding referred to in Section 5.3(a).
The Covered Party shall repay the moneys if the Covered Party does not fulfill the conditions of
Section 5.3(a).

     (c) Before seeking indemnification from the Partnership, a Covered Party seeking such
indemnification shall use all reasonable efforts to seek indemnification from the following sources
(in the following order of priority): first, from any portfolio company of a Program Partnership,
including any insurance provided by, or purchased on behalf of a Covered Party by, such portfolio
company; and second, from the General Partner, including from any insurance provided by the General
Partner. To the extent any unpaid indemnification obligation remains after the Covered Party has
received indemnification from the foregoing sources, the Partnership shall indemnify such Covered
Party for such shortfall.

ARTICLE VI

LIMITED PARTNERS

6.1 Limited Liability

     No Limited Partner shall be personally liable for any obligations of the Partnership or have
any obligation to make contributions to the Partnership other than such Limited Partner’s initial
contribution pursuant to Section 3.1 or as required pursuant to Section 4.2 or
Section 6.6; provided that a Limited Partner shall be required to return any
distribution made to it in error. To the extent any Limited Partner is required by the Partnership
Act to return to the Partnership any distributions made to it and does so, such Limited Partner
shall have a right of contribution from each other Limited Partner similarly liable to return
distributions made to it to the extent that such Limited Partner has returned a greater percentage
of the total distributions made to it and required to be returned by it than the percentage of the
total distributions made to such other Limited Partner and so required to be returned by it.

6.2 No Participation in Management

     The Limited Partners (in their capacity as such) shall not participate in the control,
management, direction, or operation of the affairs of the Partnership and shall have no power to
bind the Partnership.

6.3 Transfer of Limited Partnership Interests

     (a) A Limited Partner may not Transfer all or a portion of its interest in the Partnership
without the consent of the General Partner; provided that the General Partner shall not
unreasonably withhold its consent to any Transfer by a Limited Partner to a Family Related
Partner of such Limited Partner.

-13-

 

     (b) Unless and until the General Partner consents to the admission of a transferee as a
substituted Limited Partner in accordance with this Section 6.3, the transferor shall
remain liable for all liabilities and obligations relating to the transferred beneficial interest,
if any, and the transferee shall become an assignee of only a beneficial interest in Partnership
profits, losses, and distributions of such interest. No consent of any other Limited Partner shall
be required as a condition precedent to any Transfer.

     (c) Unless the General Partner otherwise determines in its sole discretion, the transferor and
transferee of any Limited Partner’s interest shall be jointly and severally obligated to reimburse
the General Partner and the Partnership for all reasonable expenses (including attorneys’ fees and
expenses) of any Transfer or proposed Transfer of a Limited Partner’s interest, whether or not
consummated.

     (d) Any substituted Limited Partner admitted to the Partnership with the consent of the
General Partner shall succeed to all the rights and be subject to all the obligations of the
transferring or assigning Limited Partner with respect to the interest to which such Limited
Partner was substituted. The General Partner may modify Schedule I hereof to reflect such
admittance of any substituted Limited Partner. Such substituted Limited Partner shall be treated
as having received all of the allocations and distributions received by the transferring or
assigning Limited Partner, if any.

     (e) Any Transfer that violates this Section 6.3 shall be void and the purported buyer,
assignee, transferee, pledgee, mortgagee, or other recipient shall have no interest in or rights to
Partnership assets, profits, losses, or distributions, and neither the General Partner nor the
Partnership shall be required to recognize any such purported interest or rights.

6.4 No Termination

     Neither the substitution, death, incompetency, dissolution (whether voluntary or involuntary),
nor bankruptcy of a Limited Partner shall affect the existence of the Partnership, and the
Partnership shall continue for the Term of the Partnership until its existence is terminated as
provided herein.

6.5 Additional Limited Partners

     Additional Limited Partners will be admitted only with the consent of the General Partner and
each affected Limited Partner on such terms agreed upon by the General Partner, such affected
Limited Partners, and the Person seeking admission to the Partnership. For the avoidance of doubt,
a Limited Partner is affected by the admission of a new Person to the Partnership if such Limited
Partner’s Percentage Interest is modified.

-14-

 

6.6 Reimbursement for Payments on Behalf of a Partner

     (a) If the Partnership is obligated to pay any amount to a governmental agency or body or to
any other Person (or otherwise make a payment) because of a Partner’s status or otherwise
specifically attributable to a Partner (including, without limitation, federal withholding taxes
with respect to foreign partners, state withholding taxes, state personal property taxes, state
unincorporated business taxes, etc.) then such Partner (the “Reimbursing Partner”) shall
reimburse the Partnership in full for the entire amount paid (including, without limitation, any
interest, penalties, and expenses associated with such payment). At the election of the General
Partner, the amount to be reimbursed may be charged against the Capital Account of the Reimbursing
Partner, and the Partnership shall reduce subsequent distributions which would otherwise be made to
the Reimbursing Partner until the Partnership has recovered the amount to be reimbursed;
provided that the amount of such reduction shall be deemed to have been distributed for all
purposes of this Agreement, but such deemed distribution shall not further reduce the Reimbursing
Partner’s Capital Account.

     (b) A Partner’s obligation to reimburse the Partnership under this Section 6.6 shall
survive the termination, dissolution, liquidation, and winding-up of the Partnership, and for
purposes of this Section 6.6, the Partnership shall be treated as continuing in existence.

ARTICLE VII

DURATION AND TERMINATION

7.1 Term

     The Partnership shall continue until the occurrence of any of the following events: (i) the
entry of a decree of judicial dissolution under the Act or (ii) an election by the General Partner,
with the consent of the majority of Limited Partners (as determined by the weighted average of a
Limited Partner’s Percentage Interest in all Program Partnerships taking into account the effects
of vesting provisions), to dissolve the Partnership.

7.2 Termination and Liquidation

     (a) The Partnership shall not terminate immediately upon the expiration of its Term under
Section 7.1, but shall cease to engage in further business except to the extent necessary
to promptly wind-up its affairs, perform existing contracts, and preserve the value of the Program
Assets.

     (b) During the course of winding-up the Partnership all of the provisions of this Agreement
shall continue to bind the parties and apply to the activities of the Partnership except as
specifically provided to the contrary, but there shall be no distributions to the Partners except
as provided in this Section 7.2.

-15-

 

     (c) Upon the expiration of the Partnership’s Term, the General Partner shall take such actions
as it may think fit for winding-up the Partnership and liquidating the Partnership’s assets,
including:

	 	(i)	 	The filing of all certificates and notices of dissolution as
are required by applicable law; and
	 
	 	(ii)	 	The orderly liquidation of the Partnership’s assets.

The General Partner in taking such actions may exercise and shall have the benefit of all rights,
powers, and discretions vested in the General Partner pursuant to the provisions of this Agreement.

     (d) Upon dissolution of the Partnership, all Partnership assets shall be distributed or used
as follows and in the following order of priority:

	 	(i)	 	For the payment of the debts and liabilities of the
Partnership, including, without limitation, the expenses of liquidation;
	 
	 	(ii)	 	For the setting up of any reserves that the General Partner may
deem reasonably necessary for any liabilities or obligations of the
Partnership; and
	 
	 	(iii)	 	To the Partners in accordance with the provisions of
Article IV.

     (e) The Partnership shall be terminated only after the Partnership assets have been
distributed as provided in this Section 7.2.

ARTICLE VIII

VALUATION OF PARTNERSHIP ASSETS

8.1 Normal Valuation

     For purposes of this Agreement, the value of any asset as of any date (or in the event such
date is a holiday or other day which is not a business day, as of the immediately preceding
business day) shall be valued by the General Partner in good faith using methods it considers
appropriate.

8.2 Restrictions on Transfer or Blockage

     Any security which is held under a representation that it has been acquired for investment
purposes and not with a view to public sale or distribution, or which is held subject to any other
restriction on transfer, or where the size of the Partnership’s holdings compared to the trading
volume would adversely affect the marketability of such security, shall be valued at such
discount as the General Partner deems reasonably necessary to reflect the marketability and
value of such security.

-16-

 

ARTICLE IX

BOOKS OF ACCOUNTS; MEETINGS

9.1 Books

     The Partnership shall maintain complete and accurate books of accounts of the Partnership’s
affairs at the Partnership’s principal office.

9.2 Fiscal Year

     The fiscal year of the Partnership shall be the calendar year, unless otherwise determined by
the General Partner.

9.3 Reports 

     The General Partner shall furnish to each Partner the following information and reports
prepared in accordance with U.S. generally accepted accounting principles (“GAAP”):

     (a) As soon as practicable after the end of each fiscal year commencing with the first year in
which the Partnership is in operation for a full fiscal year, (i) financial statements for the
Partnership for such year (audited by a firm of independent certified public accountants of
recognized national standing selected by the General Partner), and (ii) a statement of each
Partner’s closing Capital Account balance as of the end of such year; and

     (b) As soon as practicable after the end of each fiscal year, the Partnership’s United States
federal income tax return, including such Partner’s Schedule K-1 for such fiscal year.

ARTICLE X

MISCELLANEOUS

10.1 Amendments

     This Agreement may be amended by the written consent of the General Partner; provided
that if such amendment would adversely affect any Limited Partner, then the Limited Partner so
affected must consent to such amendment. Notwithstanding anything in this Agreement to the
contrary, this Agreement may be amended by the General Partner without the consent of any other
Partner in order to cure any ambiguity or error, make an inconsequential revision, provide clarity,
comply with any law or regulation or correct or supplement any provision herein that may be
defective or inconsistent with any other provisions herein; provided that, except with
respect to amendments necessary to comply with any law or regulation, such amendment does not
materially and adversely affect any Limited Partner.

-17-

 

10.2 Successors

     Except as otherwise provided herein, this Agreement shall inure to the benefit of and be
binding upon the Partners and their legal representatives, heirs, successors, and assigns.

10.3 Governing Law; Severability

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Florida, and, to the maximum extent possible, in such manner as to comply with all the terms and
conditions of the Partnership Act. If it is determined by a court of competent jurisdiction that
any provision of this Agreement is invalid under applicable law, such provision shall be
ineffective only in such jurisdiction and only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.

10.4 Notices

     All notices, demands, and other communications to be given and delivered under or by reason of
provisions under this Agreement shall be in writing and shall be deemed to have been given on the
date when personally delivered, when mailed by first class mail, when sent by facsimile or
transmitted by email or the internet, or when sent by reputable overnight courier service, in each
case to the recipient at the address, facsimile number, or email address set forth in Schedule
I hereof or to such other address, facsimile number, or email address, or to the attention of
such other Person as has been indicated in writing to the General Partner.

10.5 Arbitration

     The parties to this Agreement shall each use good faith efforts for a period of 30 days (or
such longer time as agreed to by the applicable parties) to try to resolve any controversy,
dispute, or claim arising out of or in connection with this Agreement, or the breach, termination,
or validity hereof. Thereafter, if such controversy, dispute, or claim remains, it shall be
settled by final and binding arbitration to be conducted by an arbitration tribunal in Fort
Lauderdale, Florida, pursuant to the rules of the American Arbitration Association. The
arbitration tribunal shall consist of three arbitrators. The party initiating the controversy,
dispute, or claim that led to arbitration shall nominate one arbitrator in the request for
arbitration and the other party shall nominate a second arbitrator in the answer thereto within 30
days of receipt of the request; provided that if there are multiple initiating or answering
parties, the arbitrator selected must be reasonably acceptable to all initiating or answering
parties, as applicable. The two arbitrators so named will then jointly appoint the third
arbitrator. If the answering party fails to nominate its arbitrator within the 30-day period, or
if the arbitrators named by the parties fail to agree on the third arbitrator within 60 days, the
office of the American Arbitration Association in New York, New York shall make the necessary
appointments of such arbitrator(s). The decision or award of the arbitration tribunal (by a
majority determination, or if there is no majority, then by the determination of the third
arbitrator, if any) shall be final, and judgment upon such decision or award may be entered in any
competent court or application may be made to any competent
court for judicial acceptance of such decision or award and an order of enforcement. In the
event of any procedural matter not covered by the aforesaid rules, the procedural law of the State
of Florida shall govern.

-18-

 

10.6 Miscellaneous

     This Agreement (including Appendix A hereto) contains the entire agreement among the
parties and supersedes all prior arrangements or understanding with respect thereto. Descriptive
headings are for convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement. This Agreement may be executed in any number of counterparts, any
one of which need not contain the signatures of more than one party, but all of such counterparts
together shall constitute one agreement. Whenever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and the plural, and
pronouns stated in either the masculine, the feminine, or the neuter gender shall include the
masculine, the feminine, and the neuter.

10.7 No Third Party Beneficiaries

     No Person that is not a party hereto shall have any rights or obligations pursuant to this
Agreement. The rights and obligations set forth herein are for the benefit of the parties hereto
only and do not create or grant any rights to third parties.

-19-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	GENERAL PARTNER:

WOODBRIDGE FUND I, LLC

 	 
	 	By:  	WOODBRIDGE HOLDINGS CORPORATION,

its Sole Member 
 	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

 -20 

 

	 	 	 	 	 

	 	 	 	 	 
	 	LIMITED PARTNERS:

 	 
	 	/s/ Alan B. Levan
 	 
	 	Alan B. Levan 	 
	 
	 
	 	/s/
John E. Abdo
 	 
	 	John E. Abdo 	 
	 
	 
	 	/s/
Seth M. Wise
 	 
	 	Seth M. Wise 	 
	 
	 

 -21-

 

	 	 	 	 	 

Schedule I

List of Limited Partners and Applicable Percentage Interests

	 	 	 	 	 
	Limited
Partner	 	Percentage Interest	 
	Alan Levan
	 	 	45.40	%
	 
	 	 	 	 
	John Abdo
	 	 	36.40	%
	 
	 	 	 	 
	Seth Wise
	 	 	18.20	%
	 
	 	 	 	 
	 
	TOTAL
	 	 	100.0	%

 

 

APPENDIX A:

Tax and Accounting Provisions

A-1 Definitions

     For purposes of this Appendix A, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit
balance, if any, in such Partner’s Capital Account, as of a specified time, after giving effect to
the following adjustments:

     (a) credit to such Partner’s Capital Account any amounts that such Partner is obligated to
restore or deemed obligated to restore pursuant to Treasury Regulations Section
1.704-1(b)(2)(ii)(c) and the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1)
and Treasury Regulations Section 1.704-2(i)(5); and

     (b) debit to such Partner’s Capital Account the items described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     “Book Value” means, with respect to any asset, the asset’s adjusted basis for U.S.
federal income tax purposes, except as follows:

     (a) the initial Book Value of any asset contributed or deemed contributed to the Partnership
shall be such asset’s gross fair market value at the time of such contribution as determined by the
General Partner pursuant to Article VIII of the Agreement;

     (b) the Book Value of all Partnership assets may be adjusted in the discretion of the General
Partner to equal their respective gross fair market values, as determined by the General Partner
pursuant to Article VIII of the Agreement, at the times specified in Treasury Regulations
Section 1.704-1(b)(2)(iv)(f);

     (c) any adjustments to the adjusted basis of any asset of the Partnership pursuant to Section
734 or Section 743 of the Code shall be taken into account in determining such asset’s Book Value
in a manner consistent with Treasury Regulations Section 1.704-1(b)(2)(iv)(m);

     (d) the Book Value of any Partnership asset distributed or deemed distributed by the
Partnership to any Partner shall be adjusted immediately prior to such distribution to equal its
gross fair market value as of the date of distribution, as determined by the General Partner
pursuant to this Article VIII; and

     (e) if the Book Value of an asset has been determined pursuant to clause (a),
(b) or (c) of this definition, to the extent permitted by the Treasury Regulations,
such Book Value shall thereafter be adjusted in the same manner as would the asset’s adjusted basis
for U.S. federal
income tax purposes, except that depreciation and amortization deductions shall be computed
based on the asset’s Book Value as so determined, rather than on its adjusted tax basis.

A-1 

 

     “Net Profits” and “Net Losses” mean, for any period, the taxable income or
loss, respectively, of the Partnership for such period, in each case as determined for U.S. federal
income tax purposes, but computed with the following adjustments:

     (a) items of income, gain, loss and deduction (including, without limitation, gain or loss on
the disposition of any Partnership asset and depreciation or other cost recovery deduction or
expense) shall be computed based upon the Book Value of the Partnership’s assets rather than upon
such assets’ adjusted bases for U.S. federal income tax purposes;

     (b) any tax-exempt income received by the Partnership shall be deemed for these purposes only
to be an item of gross income;

     (c) any expenditure of the Partnership described in Section 705(a)(2)(B) of the Code (or
treated as described therein pursuant to Treasury Regulations under Section 704(b) of the Code)
shall be treated as a deductible expense;

     (d) there shall be taken into account any separately stated items under Section 702(a) of the
Code;

     (e) if the Book Value of any Partnership asset is adjusted pursuant to clauses (b) or
(d) of the definition of “Book Value,” or pursuant to clause (c) of such
definition (but only to the extent the adjustment is attributable to a distribution of Investment
Proceeds not in liquidation of a Partner’s Partnership interest), the amount of such adjustment
shall be taken into account in the period of adjustment as gain or loss from the disposition or
deemed disposition of such asset for purposes of computing Net Profits and Net Losses; and

     (f) items of income, gain, loss, deduction or credit allocated pursuant to Section A-4
shall not be taken into account.

     “Regulatory Allocations” has the meaning set
forth in Section A-4(d).

     “Tax Matters Partner” has the meaning set
forth in Section A-6.

A-2
Maintenance of Capital Accounts

     (a) A capital account (“Capital Account”) shall be maintained for each Partner in
accordance with Section 704(b) of the Code and Treasury Regulations Sections 1.704-1(b) and
1.704-2. The initial balance of each Capital Account shall be zero.

     (b) The Capital Account of each Partner shall be increased by (i) the amount of any cash
contributed by such Partner to the capital of the Partnership, (ii) in the case of any property
contributed by such Partner to the capital of the Partnership, the Book Value of such property (net
of liabilities that the Partnership is considered to assume or take the property subject to) when
contributed, (iii) the amount of any liabilities of the Partnership that are assumed by such
Partner (except for liabilities described in Section A-2(c)(ii) that are assumed by such
Partner)
for purposes of Treasury Regulations Section 1.704-1(b)(2)(iv)(c), (iv) the Net Profits
allocated to such Partner pursuant to Section A-3, and (v) any gross income and gain
allocated to such Partner pursuant to Section A-4.

A-2 

 

     (c) The Capital Account of each Partner shall be decreased by (i) the amount of any cash
distribution to such Partner when made, (ii) the Book Value of any property distributed to such
Partner by the Partnership (net of liabilities that the Partner is considered to assume, or take
property subject to) when distributed, (iii) the amount of any liabilities of such Partner that are
assumed by the Partnership (except for liabilities described in Section A-2(b)(ii) that are
assumed by the Partnership) for purposes of Treasury Regulations Section 1.704-1(b)(2)(iv)(c), (iv)
the Net Losses allocated to such Partner pursuant to Section A-3, and (v) any gross
deductions and loss allocated to such Partner pursuant to Section A-4.

     (d) In the event that all or a portion of an interest in the Partnership is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent such Capital Account relates to the Transferred Partnership interest.

     (e) The Capital Account of each Partner shall be adjusted to reflect any adjustment to the
Book Value of the Partnership’s assets attributable to the application of Section 734 of the Code
in respect of a distribution in liquidation of such Partner’s Partnership interest to the extent
required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

     (f) Except as otherwise provided in this Agreement, whenever it is necessary to determine the
Capital Account balance of any Partner, the Capital Account balance of such Partner shall be
determined after giving effect to all allocations pursuant to this Appendix A and all
contributions and distributions made prior to the time as of which such determination is to be
made.

     (g) It is the intention of the parties that the Capital Accounts of the Partners be kept in
the manner required under Section 704(b) of the Code and Treasury Regulations sections 1.704-1(b)
and 1.704-2. To the extent any additional adjustment to the Capital Accounts is required by such
provisions, the General Partner is hereby authorized to make such adjustment after notice to the
Partners.

A-3 

 

A-3 Allocations of Profits and Losses

     (a) After the application of Section A-4, Net Profits and Net Losses for any taxable
year, or portion thereof, shall be allocated among the Partners (and credited or debited to their
Capital Accounts) in such manner so that, after taking into account distributions by the
Partnership and contributions made to the Partnership through the end of such taxable year and the
allocations of Net Profits and Net Losses for such taxable year, (i) the respective positive
Capital Account balances of the Partners would correspond as closely as possible to the amount each
Partner would receive as a cash distribution pursuant to Section 7.2(d), if the Partnership
were to liquidate completely immediately after the end of such taxable year and (ii) any resulting
deficit Capital Account balances of the Partners would correspond as closely as possible with the
manner in which economic responsibility for Partnership deficit balances (as determined in
accordance with the principles of Treasury Regulations under Section 704 of the Code) would be
borne by the Partners under the terms of this Agreement if the Partnership were to liquidate
completely immediately after the end of such taxable year. For purposes of the preceding sentence,
the amount of cash to be distributed to each Partner, each Partner’s Capital Account and the amount
of each Partner’s economic responsibility for Partnership deficit balances, upon the assumed
liquidation, shall be computed by assuming that in connection with such liquidation, the
Partnership sold all of its assets for amounts such that no Net Profits or Net Losses result from
the sale and settled all of its liabilities for amounts such that no Net Profits or Net Losses
result from the settlement. For purposes of applying this Section A-3, the Capital Account
balance of each Partner shall be increased by such Partner’s share of “partnership minimum gain”
and “partner minimum gain” (within the meaning of and in accordance with the Treasury Regulations
under Section 704(b) of the Code). Subject to the other provisions of this Appendix A, an
allocation to a Partner of a share of Net Profit or Net Loss shall be treated as an allocation of
the same share of each item of income, gain, loss or deduction that is taken into account in
computing Net Profit or Net Loss.

     (b) If a Partner transfers, acquires, or redeems an interest in the Partnership during a
taxable year, the Net Profit or Net Loss (and other items referred to in Section A-4)
attributable to such interest for such year shall be allocated between the transferring Partner and
the transferee (or the other Partners in the Partnership) by any method permitted under Section 706
of the Code selected by the General Partner.

A-4 Regulatory Allocations and Special Allocations

     (a) Notwithstanding any other provision of this Agreement, (i) “partner nonrecourse
deductions” (as defined in Treasury Regulations Section 1.704-2(i)), if any, of the Partnership
shall be allocated for each period to the Partner that bears the economic risk of loss within the
meaning of Treasury Regulations Section 1.704-2(i), and (ii) “nonrecourse deductions” (as defined
in Treasury Regulations Section 1.704-2(b)) and “excess nonrecourse liabilities” (as defined in
Treasury Regulations Section 1.752-3(a)), if any, of the Partnership shall be allocated to the
Partners in accordance with their respective percentage interests in Net Losses.

     (b) This Agreement shall be deemed to include “qualified income offset,” “minimum gain
chargeback” and “partner nonrecourse debt minimum gain chargeback” provisions within the meaning of
Treasury Regulations under Section 704(b) of the Code. Accordingly, notwithstanding any other
provision of this Agreement, items of gross income shall be allocated to the Partners on a priority
basis to the extent and in the manner required by such provisions.

     (c) To the extent that Net Losses or items of loss or deduction otherwise allocable to a
Partner hereunder would cause such Partner to have an Adjusted Capital Account Deficit as of the
end of the taxable year to which such Net Losses, or items of loss or deduction, relate (after
taking into account the allocation of all items of income and gain for such taxable period), such
Net Losses, or items of loss or deduction, shall not be allocated to such Partner and instead shall
be allocated to the Partners in accordance with Section A-3 as if such Partner were not a
Partner.

A-4 

 

     (d) Any allocations required to be made pursuant to clauses (a), (b), and
(c) above (the “Regulatory Allocations”) (other than allocations, the effect of
which are likely to be offset in the
future by other special allocations) shall be taken into account, to the extent permitted by
the Treasury Regulations, in computing subsequent allocations of income, gain, loss or deduction
pursuant to Section A-3 so that the net amount of any items so allocated and all other
items allocated to each Partner shall, to the extent possible, be equal to the amount that would
have been allocated to each Partner pursuant to Section A-3 had such Regulatory Allocations
under this Section A-4 not occurred.

     (e) If any Partner is treated for income tax purposes as realizing ordinary income because of
receipt of its Partnership interest (whether under Section 83 of the Code or any similar provisions
of any law, rule or regulations or any other applicable law, rule, regulation or doctrine) and the
Partnership is entitled to any offsetting deduction, the Partnership’s deduction shall be allocated
among the Partners in such manner as to, as nearly as possible, offset such ordinary income
realized by such Partner.

A-5 Tax Allocations

     (a) For tax purposes, except as otherwise provided in this Section A-5, each item of
income, gain, loss and deduction and credit shall be allocated among the Partners in the same
manner as its corresponding item of book income, gain, loss, deduction or credit is allocated
pursuant to this Appendix A.

     (b) In accordance with Sections 704(b) and 704(c) of the Code and the Treasury Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership asset contributed (or
deemed contributed) to the capital of the Partnership shall, solely for federal income tax
purposes, be allocated among the Partners so as to take into account any variation between the
adjusted basis of such Partnership asset for federal income tax purposes and its Book Value upon
its contribution (or deemed contribution). If the Book Value of any Partnership asset is adjusted,
subsequent allocations of taxable income, gain, loss and deduction with respect to such Partnership
asset shall take account of any variation between the adjusted basis of such Partnership asset for
federal income tax purposes and the Book Value of such Partnership asset in the manner prescribed
under Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder. The General Partner
shall select the manner by which variations between Book Value and adjusted basis are taken into
account in accordance with Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder.

     (c) The provisions of this Appendix A (and other related provisions in this Agreement)
pertaining to the allocation of items of Partnership income, gain, loss, deductions, and credits
shall be interpreted consistently with the Treasury Regulations, and to the extent unintentionally
inconsistent with such Treasury Regulations, shall be deemed to be modified to the extent necessary
to make such provisions consistent with the Treasury Regulations.

A-5 

 

A-6 Tax Matters Partner; Management Authority Regarding Tax and Accounting

     (a) The General Partner is designated the “Tax Matters Partner” (as defined in Section
6231 of the Code) to manage administrative tax proceedings conducted at the partnership level by
the Internal Revenue Service with respect to Partnership matters. The General Partner is
specifically directed and authorized to take whatever steps the General Partner, in its sole
discretion, deems necessary or desirable to perfect such designation, including, without
limitation, filing any forms or documents with the Internal Revenue Service and taking such other
action as may from time to time be required under Treasury regulations. The Tax Matters Partner
shall have full authority to extend the statute of limitations and control any tax audit or other
proceeding on behalf of the Partnership. Expenses of administrative proceedings relating to the
determination of Partnership items at the Partnership level undertaken by the Tax Matters Partner
will be deemed to be expenses of the Partnership.

     (b) All matters concerning (i) allocations of Net Profits and Net Losses and allocations for
tax purposes, (ii) distributions by the Partnership, including the taxes thereon, and (iii)
accounting procedures and determinations, tax determinations and elections, determinations as to on
whose behalf expenses were incurred and the attribution of fees and expenses to a Program Asset,
and other determinations not specifically and expressly provided for by the terms of this
Agreement, shall be determined by the General Partner, whose determination shall be final and
conclusive as to all the Partners absent manifest clerical error.

A-6 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

CORE COMMUNITIES, LLC

Date: March 13, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I GENERAL PROVISIONS	 	 	1	 
	 	1.1	 	 	Formation

	 	 	1	 
	 	1.2	 	 	Name

	 	 	2	 
	 	1.3	 	 	Purpose

	 	 	2	 
	 	1.4	 	 	Principal Office

	 	 	2	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II DEFINITIONS; DETERMINATIONS	 	 	2	 
	 	2.1	 	 	Definitions

	 	 	2	 
	 	2.2	 	 	Determinations

	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III INVESTED CAPITAL; CAPITAL ACCOUNTS	 	 	6	 
	 	3.1	 	 	Invested Capital

	 	 	6	 
	 	3.2	 	 	Future Contributions

	 	 	7	 
	 	3.3	 	 	Capital Accounts

	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV DISTRIBUTIONS	 	 	7	 
	 	4.1	 	 	Distribution Policy

	 	 	7	 
	 	4.2	 	 	Reimbursement Payment

	 	 	8	 
	 	4.3	 	 	Priority of Distributions

	 	 	8	 
	 	4.4	 	 	Apportionment of Carry Distributions

	 	 	9	 
	 	4.5	 	 	IP Clawback Reserve

	 	 	9	 
	 	4.6	 	 	Clawback Obligations

	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V PROGRAM MANAGER	 	 	12	 
	 	5.1	 	 	Program Manager

	 	 	12	 
	 	5.2	 	 	Fees

	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI MANAGING MEMBER	 	 	12	 
	 	6.1	 	 	Management Authority

	 	 	12	 
	 	6.2	 	 	No Liability to Company or Members

	 	 	13	 
	 	6.3	 	 	Indemnification

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII NON-MANAGING MEMBERS	 	 	14	 
	 	7.1	 	 	Limited Liability

	 	 	14	 
	 	7.2	 	 	No Participation in Management

	 	 	14	 
	 	7.3	 	 	Transfer of LLC Interests by Non-Managing Members

	 	 	14	 
	 	7.4	 	 	No Termination

	 	 	15	 
	 	7.5	 	 	Additional Non-Managing Members

	 	 	15	 
	 	7.6	 	 	Reimbursement for Payments on Behalf of a Member

	 	 	15	 

     -i-     

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE VIII DURATION AND TERMINATION	 	 	16	 
	 	8.1	 	 	Term

	 	 	16	 
	 	8.2	 	 	Termination and Liquidation

	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX VALUATION OF COMPANY ASSETS	 	 	17	 
	 	9.1	 	 	Normal Valuation

	 	 	17	 
	 	9.2	 	 	Restrictions on Transfer or Blockage

	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X BOOKS OF ACCOUNTS; MEETINGS	 	 	17	 
	 	10.1	 	 	Books

	 	 	17	 
	 	10.2	 	 	Fiscal Year

	 	 	17	 
	 	10.3	 	 	Reports

	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	18	 
	 	11.1	 	 	Amendments

	 	 	18	 
	 	11.2	 	 	Successors

	 	 	18	 
	 	11.3	 	 	Governing Law; Severability

	 	 	18	 
	 	11.4	 	 	Notices

	 	 	19	 
	 	11.5	 	 	Arbitration

	 	 	19	 
	 	11.6	 	 	Miscellaneous

	 	 	19	 
	 	11.7	 	 	No Third Party Beneficiaries

	 	 	20	 
	 	 	 	 	 
	 	 	 	 
	APPENDIX A: Tax and Accounting Provisions	 	 	A-1	 
	 	A-1	 	 	Definitions

	 	 	A-1	 
	 	A-2	 	 	Maintenance of Capital Accounts

	 	 	A-2	 
	 	A-3	 	 	Allocations of Profits and Losses

	 	 	A-4	 
	 	A-4	 	 	Regulatory Allocations and Special Allocations

	 	 	A-4	 
	 	A-5	 	 	Tax Allocations

	 	 	A-5	 
	 	A-6	 	 	Tax Matters Partner; Management Authority Regarding Tax and Accounting

	 	 	A-6	 
	 	 	 	 	 
	 	 	 	 
	APPENDIX B: Apportionment and Modification of Carried Interest to IP Members	 	 	B-1	 
	 	B-1	 	 	Definitions

	 	 	B-1	 
	 	B-2	 	 	Vesting Provisions

	 	 	B-3	 
	 	B-3	 	 	Determination of Carry Accounts

	 	 	B-4	 
	 	B-4	 	 	Distributions to the IP Members

	 	 	B-5	 
	 	B-5	 	 	Responsibility for Gross Clawback Amount

	 	 	B-5	 
	 	B-6	 	 	83(b) Election

	 	 	B-5	 

     -ii-     

 

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

OF

CORE COMMUNITIES, LLC

     THIS LIMITED LIABILITY COMPANY OPERATING AGREEMENT is deemed to be effective as of March 13,
2009 (the “Effective Date”) by and among the Managing Member, the Non-Managing Members, and
the Program Manager (each as defined below).

     WHEREAS, the Company (as defined below) was formed pursuant to the Articles (as defined below)
and an operating agreement was executed (the “Initial Agreement”);

     WHEREAS, the Articles were amended by changing the name of the Company from Levitt Community
Development Company, LLC to Core Communities, LLC and the management of the Company from a
manager-managed Florida limited liability company to a member-managed Florida limited liability
company in a filing with the Secretary of State of Florida on November 5, 2001;

     WHEREAS, the Member amended and restated the Initial Agreement, and approved articles of
amendment to the Initial Agreement and ratified the filing thereof, by executing an amended and
restated agreement (the “Amended Agreement”), which was effective December 28, 2001;
and 

     WHEREAS, the parties to this Agreement wish to amend and restate the Amended Agreement in its
entirety as hereinafter set forth, and to admit the IP Member and the Residual Member as members of
the Company.

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

GENERAL PROVISIONS

1.1 Formation

     The Members hereby agree to continue a limited liability company (the “Company”)
pursuant to and in accordance with the Florida Limited Liability Company Act, as amended from time
to time (the “LLC Act”). The term of the Company (the “Term”) commenced upon the
filing of the Articles of Organization (the “Articles”) with the Secretary of State of
Florida (the date of such filing is referred to herein as the date of “formation” of the Company)
and shall continue until dissolution and termination of the Company in accordance with the
provisions of ARTICLE VIII hereof.

 

 

1.2 Name

     The name of the Company shall be Core Communities, LLC, or such other name or names as the
Managing Member may designate from time to time.

1.3 Purpose

     The Company is organized for the principal purpose of (i) acquiring, managing, and supervising
the interests in the Program Assets, and (ii) engaging in such other activities incidental or
ancillary thereto as the Managing Member deems necessary or advisable.

1.4 Principal Office

     The Company shall maintain a principal office in Fort Lauderdale, Florida, or at such other
place or places as the Managing Member may from time to time designate.

ARTICLE II

DEFINITIONS; DETERMINATIONS

2.1 Definitions

     Capitalized terms used in this Agreement have the meanings set forth below or as otherwise
specified herein:

     “Agreement” means this Amended and Restated Limited Liability Company Operating
Agreement of Core Communities, LLC, as amended or modified from time to time in accordance with its
terms.

     “Alternative Clawback Reserve” has the meaning set forth in Section 4.5.

     “Amended Agreement” has the meaning set forth in the Recitals.

     “Articles” has the meaning set forth in Section 1.1.

     “Capital Account” is the account established for each Member in accordance with the
provisions of Appendix A hereto.

     “Capital Proceeds” means any Investment Proceeds received by the Company in respect of
a Program Asset that are attributable to a Realization event.

-2-

 

     “Carried Interest Members” means the Sponsor Member, the IP Members, and the Residual
Member, in their capacities as Members entitled to receive Carry Distributions, and “Carried
Interest Member” shall mean each of such Persons individually.

     “Carry Distributions” means those distributions paid to the Carried Interest Members
in their capacities as such pursuant to Section 4.3(a)(ii) and Section
4.3(a)(iii)(B).

     “Carry Percentage” means, with respect to a Carried Interest Member, its percentage
interest in Carry Distributions as set forth for such Member on Schedule I hereof.

     “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

     “Company” has the meaning set forth in Section 1.1.

     “Contributed Property” means all of the assets held by Core Communities, LLC as of the
Effective Date.

     “Covered Party” means each of the Members, a director, officer, partner or member (or
a former director, officer, partner or member) of any Member, and to the extent approved by the
Managing Member in its sole discretion, any other employee of a Member or an agent acting at the
direction of the Managing Member or the Program Manager, and in any such case, the heirs and legal
representatives of any such person.

     “Current Proceeds” means any Investment Proceeds received by the Company in respect of
a Program Asset that are not attributable to a Realization event, including dividends, rents, or
interest with respect to such Program Asset.

     “Deal Fees” means those amounts received by the Managing Member (or an affiliate of
the Managing Member) as break-up fees, director fees, “flip” fees, investment banking, consulting,
or similar transaction fees, but not including any amount received as reimbursement for expenses
directly related to the provision of such services for which the fee is being paid. “Deal Fees”
also means all amounts earned by any employee or agent (in such capacity) of the Program Manager
with respect to a Program Asset or other activities of the Company, but not including payments to
such employee or agent from the Program Manager.

     “Effective Date” has the meaning set forth in the Recitals.

     “Executive
IP Member” has the meaning set forth in Section 4.5(b).

     “Fair Market Value” of a security or a Program Asset means the amount that would be
realized as Investment Proceeds if such security or Program Asset had been sold at its “value”
(determined in accordance with Article IX).

     “Family Related Member” means, with respect to any IP Member, any Person who is a
spouse or lineal descendent of the parents of such IP Member or any Person which is a trust formed
by such IP Member for investment by or for the benefit of such IP Member’s spouse or any lineal
descendants of the parents of such IP Member or of such IP Member’s spouse and/or any charitable
organization; provided that any cause of action or other dispute arising in relation to a
Family Related Member’s interest may only be pursued by the IP Member associated with
such Family Related Member, except if such IP Member has died or become legally incapacitated.

-3-

 

     “GAAP” has the meaning set forth in Section 10.3.

     “Gross Clawback Amount” has the meaning specified in Section 4.6.

     “Impairment” means, with respect to a Program Asset, a determination by the Managing
Member that the Program Asset is not expected to be able to provide for cash flow or realization
proceeds a return to investors of at least the amount of Invested Capital associated with such
asset as well as a 10% per annum compounded annual return on such Invested Capital. The Managing
Member’s determination that a Program Asset has suffered an Impairment for purposes of this
Agreement shall be independent of any determination that the value of the Program Asset is reduced
for purposes of the financial statements prepared under generally accepted accounting principles.

     “Initial Agreement” has the meaning set forth in the Recitals.

     “Invested Capital” has the meaning set forth in Section 3.1.

     “Investment Proceeds” means the gross investment returns (whether in the form of cash,
securities, or other property) received by the Company in respect of the Company’s Invested Capital
in any Program Assets (i.e., in its capacity as an investor and not with respect to the provision
of any services with respect to such Program Assets or to any other investor in such Program
Assets). For the avoidance of doubt, the amount of Investment Proceeds shall be determined without
regard to any management fees, carried interest, or similar deductions that may be charged by the
Managing Member or the Program Manager to any investment vehicle through which the Company holds
any of its investments.

     “IP Clawback Reserve” has the meaning set forth in Section 4.5.

     “IP Members” means any Persons designated as IP Members on Schedule I hereof,
in their capacities as members of the Company, or any other Persons that are admitted as IP Members
in accordance with the terms hereof, in each case for so long as such Persons continue to be IP
Members hereunder, and “IP Member” shall mean each of such Persons individually.

     “LLC Act” has the meaning set forth in Section 1.1.

     “Managing Member” means Woodbridge Holdings Corporation, in its capacity as managing
member of the Company, and any successor managing member of the Company.

     “Members” means collectively the Managing Member (including in its capacity as Sponsor
Member), the IP Members, the Residual Member, the Program Manager and any other Person that is
admitted to the Company as a partner in accordance with the terms hereof, and “Member”
shall mean each of such persons individually.

     “Non-Managing Members” means the IP Member and the Residual Member, and
“Non-Managing Member” shall mean each of such Persons individually.

-4-

 

     “Overall
Hurdle Clawback” has the meaning set forth in the limited partnership agreement
governing Woodbridge Executive Incentive Plan 1, LP.

     “Person” means an individual, a partnership (general, limited, or limited liability),
a corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental, quasi-governmental, judicial, or
regulatory entity or any department, agency, or political subdivision thereof.

     “Platform” means all of the program partnerships (or other entities) that are designated as a
“Program Partnership” in accordance with the terms of the governing agreement of Woodbridge
Executive Incentive Plan 1, LP.

     “Portfolio Company” means each of the subsidiaries of Core Communities, LLC and such
other entities, the interests in which are Program Assets.

     “Preferred Return” has the meaning set forth in Section 4.3.

     “Program Assets” means those assets held by the Company as part of the Company’s
investment program, and “Program Asset” shall mean each of such Program Assets
individually.

     “Program Expenses” means those costs, expenses, liabilities and obligations relating
to the Company’s activities, investments and business (to the extent not borne or reimbursed by the
Portfolio Company) as set forth on Schedule II hereof.

     “Program Manager” means Woodbridge Holdings Corporation.

     “Program
Partnership” means each partnership (or other entity) that
is designated as a “Program Partnership” in accordance with
the terms of the governing documents of Woodbridge Executive
Incentive Plan 1, LP. All such partnerships together with the Company
are the “Program Partnerships.”

     “Realization” means the sale, redemption, or other disposition of, or any other
receipt of a capital nature, including proceeds from the recapitalization or refinancing at the
investment level (as determined by the Managing Member) with respect to the whole or part of, or
the permanent write-off of a Program Asset, and “Realized” shall be construed accordingly.
To the extent a Program Asset has suffered an Impairment of less than the whole of the Program
Asset, a portion of the Program Asset equal to the amount of the Impairment shall be treated as if
sold for no consideration. If the Managing Member determines that an Impairment has been reversed,
the Managing Member shall adjust the allocations and distributions made by the Company so as to
reverse the effects of the prior Impairment.

     “Realized Base Contributions” has the meaning set forth in Section 4.3(a)(i).

     “Regulatory Allocations” has the meaning set forth in Appendix A hereto.

     “Reimbursement Payment” means the special payment to the Program Manager pursuant to
Section 4.2.

     “Reimbursing Member” has the meaning set forth in Section 7.6(a).

     “Residual Member” means the Person entitled to receive the amounts of Carry
Distributions not made to the Sponsor Member or the IP Members, which Person will be Woodbridge
Executive Incentive Plan 1, LP.

     “Return Distributions” means those distributions to the Managing Member other than
Carry Distributions as set forth in Section 4.3.

     “Sponsor Member” means the Person entitled to receive the amounts of Carry
Distributions apportioned to the Sponsor Member pursuant to the terms hereof, which Person
initially will be the Managing Member, in its capacity as Sponsor Member.

-5-

 

     “Sponsor Proceeds” means all other proceeds received by the Company from or with
respect to its assets other than Investment Proceeds. Sponsor Proceeds include management fees,
carried interest, and Deal Fees charged by the Company to other investors in an investment vehicle
through which the Company holds its assets; provided, however, that to the extent the
Managing Member determines that Deal Fees arising with respect to a Company asset are attributable
to the capital invested in that asset by the Company, such fees will be treated as Investment
Proceeds, rather than Sponsor Proceeds. For the avoidance of doubt, Deal Fees attributable to the
capital invested by a third party or not attributable to any investment of capital will be treated
as Sponsor Proceeds.

     “Term” has the meaning set forth in Section 1.1.

     “Transfer” means a transfer in any form, including a sale, assignment, conveyance,
pledge, mortgage, encumbrance, hypothecation, exchange, gift, or other disposition, or the act of
so doing, whether voluntarily, by operation of law, pursuant to judicial process, or otherwise as
the context requires.

     “Woodbridge” means Woodbridge Holdings Corporation or any direct or indirect
subsidiary of such corporation.

2.2 Determinations

     Unless otherwise indicated, any determinations or calculations conducted pursuant to this
Agreement shall be determined or calculated as of the date of such determination or calculation.

ARTICLE III

INVESTED CAPITAL; CAPITAL ACCOUNTS

3.1 Invested Capital 

     As of the Effective Date, the Members shall be required to make the following contributions to
the capital of the Company (“Invested Capital”):

     (a) The Managing Member shall be credited with having contributed the Contributed Property to
the Company, which for purposes hereof shall be treated as Invested Capital of $127,142,909.00, and
such Contributed Property will be treated as having a Book Value as defined in Appendix A
hereto.

     (b) Each IP Member shall contribute $250 to the capital of the Company.

     (c) The Residual Member shall contribute $250 to the capital of the Company.

The right of each IP Member, the Residual Member, and the Sponsor Member to receive Carry
Distributions represents a profits interest received for services rendered or to be rendered to or
for the benefit of the Company.

-6-

 

3.2 Future Contributions

     (a) Other than the required Invested Capital described in Section 3.1, any
reimbursement payment pursuant to Section 7.6, or as may be required by applicable law, no
Member shall have any further obligation to contribute additional Invested Capital to the Company;
provided that the Managing Member shall be required to make special distributions to the
Company to the extent that such special distributions are necessary to reduce any IP Member’s
Alternative Clawback Reserve as described in Section 4.2(c).

     (b) The Managing Member, in its discretion, whether or not in connection with the admission of
any new Member to the Company in accordance with Section 7.5, may permit a Member to
contribute additional Invested Capital to the Company under such circumstances as may be determined
by the Managing Member.

     (c) The Managing Member may cause the Company to borrow funds, including from Woodbridge,
under such terms as the Managing Member may determine, in order to permit the Company to meet its
liquidity needs.

3.3 Capital Accounts

     (a) A capital account shall be maintained for each Member in accordance with the provisions of
Appendix A hereto.

ARTICLE IV

DISTRIBUTIONS

4.1 Distribution Policy

     (a) Except as set forth in Section 4.1(c) and Section 4.4, the Managing Member
shall periodically cause excess cash or cash equivalents held in the Company to be distributed to
the Members in accordance with Section 4.3, subject to any limitations imposed by
agreements between the Company and its lenders.

     (b) Distributions may be in the form of cash, property, or securities. Except as otherwise
provided herein, for purposes of this Agreement, an in-kind distribution of non-cash property shall
be treated as if an amount of cash equal to the Fair Market Value of such property had been
distributed.

     (c) In determining the amounts that may be available for distribution to the Members, the
Managing Member shall first cause the Company to satisfy its current obligations, including its
obligation to make any Reimbursement Payment to the Program Manager in accordance with Section
4.2. In addition, the Managing Member may cause the Company to retain such amounts as the
Managing Member determines is appropriate to act as reserves for any fixed or contingent payments
or liabilities of the Company (including future amounts of Reimbursement Payments) for which the
Company may be liable.

-7-

 

4.2 Reimbursement Payment

     Prior to making any distributions to the Members pursuant to Section 4.3, the Company
shall make a reimbursement payment (the “Reimbursement Payment”) to the Program Manager
equal to the amount of Program Expenses (including, for the avoidance of doubt, interest accruing
on the Program Manager’s line of credit used to finance such expenses) borne by, and required to be
paid by, the Program Manager that have yet to be reimbursed by the Company to the Program Manager.

4.3 Priority of Distributions

     After making any Reimbursement Payment pursuant to Section 4.2, except to the extent
specifically provided in this Agreement to the contrary, distributions by the Company shall be made
among the Members as follows:

     (a) Capital Proceeds and Sponsor Proceeds. Distributions designated as Capital Proceeds or
Sponsor Proceeds by the Managing Member shall be distributed as follows:

	 	(i)	 	First, 100% to the Managing Member as “Return
Distributions” until the Managing Member has received aggregate
distributions sufficient to provide the Managing Member a 10% per annum
cumulative annually compounded internal rate of return (the “Preferred
Return”) on the Managing Member’s Invested Capital attributable to all
Program Assets (or portion thereof) that have been Realized (such Invested
Capital, the “Realized Base Contributions”), provided that for
purposes of determining the Preferred Return, the Invested Capital attributable
to the contribution of the Contributed Property shall be treated as having been
made on September 1, 2008 (notwithstanding that such date pre-dates the date of
this Agreement). The Managing Member will include as Return Distributions any
amounts received that relate to the investment in such Program Assets,
regardless of whether such amounts are received through, or outside of, the
Company. For the avoidance of doubt, an “internal rate of return” calculation
encompasses a return of, as well as a return on, the Realized Base
Contributions.
	 
	 	(ii)	 	Second, 20% to the Managing Member (as additional
Return Distributions) and 80% to the Carried Interest Members (and among them
as provided in Section 4.4) as “Carry Distributions,” until the
aggregate amount of Carry Distributions equals 20% of the excess of (A) the
aggregate amount of Return Distributions and Carry Distributions distributed
over (B) the Realized Base Contributions; and
	 
	 	(iii)	 	Thereafter, between the Managing Member and the
Carried Interest Members as follows:

	 	(A)	 	The Managing Member is allocated an additional
amount (as additional Return Distributions) so that the aggregate
amount of Return Distributions distributed to the Managing Member
equals
the sum of (1) the Realized Base Contributions plus (2) 80%
of the amount by which the aggregate Investment Proceeds received by
the Company exceeds the Realized Base Contributions; and

-8-

 

	 	(B)	 	The remainder to the Carried Interest Members
as additional Carry Distributions.

     (b) Current Proceeds. Distributions designated as Current Proceeds by the Managing Member
shall be distributed in the same manner as Capital Proceeds and Sponsor Proceeds pursuant to
Section 4.3(a) except that for purposes of applying those provisions with respect to a
particular distribution of Current Proceeds, the Program Asset giving rise to such Current Proceeds
will be deemed to have been Realized for an amount equal to the Invested Capital (and taking into
account any prior unreversed Impairment with respect to such Program Asset) attributable to such
Program Asset immediately prior to the distribution of such Current Proceeds.

4.4 Apportionment of Carry Distributions

     Carry Distributions will be made to and among the Carried Interest Members in the following
amounts:

     (a) Distributions to the Sponsor Member. The Sponsor Member shall in all cases receive 35% of
all Carry Distributions.

     (b) Distributions to the IP Members. The IP Members as a group shall receive a portion of
Carry Distributions, which portion shall not exceed the aggregate Carry Percentages of the IP
Members, but which may be reduced by the vesting and other provisions in Appendix B hereto.
The provisions of Appendix B will govern the determination of each IP Member’s share of
such Carry Distributions.

     (c) Distributions to the Residual Member. Carry Distributions not made to the Sponsor Member
or the IP Members shall be made to the Residual Member. For the avoidance of doubt, any reductions
in Carry Distributions to the IP Members pursuant to the vesting provisions set forth in
Appendix B hereto shall accrue to the benefit of the Residual Member.

4.5 IP Clawback Reserve

     (a) Notwithstanding
the provisions of Section 4.3 and Section 4.4
and Appendix B hereto, 25%
(adjusted as provided in Section 4.5(b) below) of any Carry Distributions that are available for
distribution to an IP Member shall be withheld by the Company, and a separate bookkeeping account
(an “IP Clawback Reserve”) shall be established for such IP Member by the Company for tracking
deposits, withdrawals, and interest earned with respect to such account. The Company may aggregate
each of the IP Clawback Reserves within a single interest-bearing Company bank account.

     (b) Each time that the Company is to make a distribution of Carry Distributions, the
Managing Member (together with the general partners of each of the other Program Partnerships) will
review the remaining Program Assets and the assets within each other Program Partnership in the
Platform to determine whether any of the cumulative assets have suffered an Impairment that has not
been reversed, and if so, the effect that such Impairment would have on the ability of Woodbridge
(in its capacity as an investor in such program partnership) to receive proceeds from such Program
Partnership sufficient to provide Woodbridge with at least a 10% annual cumulative compounded
internal rate of return on its Invested Capital (as defined by the governing agreement of such
Program Partnership) in such Program Partnership. If the Managing Member determines that the
Impairment would prevent such minimum return from being achieved, the Managing Member may increase
the percentage (but not in excess of 100%) of Carry Distributions to be contributed to the IP
Clawback Reserve of any Executive IP Member (as defined below) in order to add to such IP Clawback
Reserve an amount which, when combined with the other reserves being established by the other
Program Partnerships and by Woodbridge Executive Incentive Plan 1, LP with respect to such
Executive IP Member, will cover such Executive IP Member’s share of the Overall Hurdle Clawback
that is anticipated to arise.

	 	(i)	 	“Executive IP Member” shall mean any person who is both an IP Member
and a limited partner of Woodbridge Executive Incentive Plan 1, LP.

	 	(ii)	 	For the avoidance of doubt, the Managing Member shall not increase the
percentage of Carry Distributions to be contributed to the IP Clawback Reserve
of any IP Member who is not an Executive IP Member.

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     (c) Notwithstanding the foregoing, in the Managing Member’s discretion, rather than
depositing amounts in the IP Clawback Reserve for an IP Member, the Managing Member may cause such
amounts to be distributed to the Managing Member as additional Return Distributions, which will be
credited to a special bookkeeping account (an “Alternative Clawback Reserve”) for the
benefit of such IP Member. The balance in the Alternative Clawback Reserve shall be increased from
time to time by an interest factor equal to the interest earned on the IP Clawback Reserve (or, if
there is no IP Clawback Reserve, on the rate of interest that the Company would receive on an
interest-bearing bank account).

     (d) As set forth in Section 4.6, at the expiration of the Term of the Company,
each IP Member will be responsible for a share of the Gross Clawback Amount, if any.

	 	(i)	 	To satisfy an IP Member’s share, amounts will first be taken
from such IP Member’s Alternative Clawback Reserve. To the extent that such
IP Member’s share is not satisfied, amounts will be taken from such IP
Member’s IP Clawback Reserve.

	 	(ii)	 	To the extent amounts in the Alternative Clawback Reserve are
not needed to satisfy the share of an IP Member who is not an Executive IP
Member of the Gross Clawback Amount, an amount of Return Distributions that
would otherwise be payable to the Managing Member or Carry Distributions
otherwise payable to the Sponsor Member equal to such excess, shall instead be
specially distributed to the applicable IP Member without regard to
Section 4.3, which distributions will reduce on a dollar-for-dollar
basis the amount in such IP Member’s Alternative Clawback Reserve. If the
full amount of such excess cannot be so distributed, the shortfall shall be
contributed by the Managing Member to the Company for special distribution to
the applicable IP Member.

	 	(iii)	 	To the extent amounts in the Alternative Clawback Reserve are not
needed to satisfy the share of an Executive IP Member of the Gross Clawback
Amount, such excess amounts will be added to the Alternative Clawback Reserve
established for the benefit of such Executive IP Member by Woodbridge
Executive Incentive Plan 1, LP.

	 	(iv) 	 	(A) For any IP Member who is not an Executive IP Member, to the extent
amounts in such IP Member’s IP Clawback Reserve (including interest earned
thereon) are not needed to fund such IP Member’s share of the Gross Clawback
Amount, such amounts will be released by the Company to the applicable IP
Member.
	 
	 	 	 	(B) For any Executive IP Member, to the extent amounts in such
Executive IP Member’s IP Clawback Reserve (including interest earned
thereon) are not needed to fund such Executive IP Member’s share of the
Gross Clawback Amount, such amounts will be added to the Clawback Reserve
established for the benefit of such Executive IP Member by Woodbridge
Executive Incentive Plan 1, LP.

     (e) Prior to the expiration of the Term of the Company, the Managing Member, in its
discretion, may release reserved amounts to an IP Member who is not an Executive IP Member by (i)
causing special distributions reducing such IP Member’s Alternative Clawback Reserve or causing
contributions and special distributions, each as described in Section 4.5(d) above, or (ii)
distributing amounts to an IP Member from such IP Member’s IP Clawback Reserve, in either case to
the extent the Managing Member determines that such released amounts are not necessary to secure
such IP Member’s share of the Gross Clawback Amount, each as described in Section 4.6. Similarly,
the Managing Member may, in its discretion, move amounts to the Alternative Clawback Reserve or the
Clawback Reserve of an Executive IP Member established for the benefit of such Executive IP Member
by Woodbridge Executive Incentive Plan 1, LP.

4.6 Clawback Obligations

     (a) Following the final liquidating distribution of assets pursuant to Section 8.2, if
there have been any Carry Distributions, the Managing Member shall determine the additional amount
of Return Distributions (the “Gross Clawback Amount”), if any, that would need to have been
distributed to the Managing Member in connection with such final liquidating distribution so that
each of the following would have been true:

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	 	(i)	 	The Managing Member would have received sufficient Return
Distributions to provide it with at least the Preferred Return on the
Managing Member’s Invested Capital, as calculated pursuant to Section
4.3(a)(i); and
	 
	 	(ii)	 	The Managing Member would have received Return Distributions at
least equal to the amount of its Invested Capital plus 80% of the amount by
which the aggregate Investment Proceeds received by the Company exceeded the
Managing Member’s Invested Capital.

     (b) Each Carried Interest Member shall be responsible for returning to the Company, for
distribution to the Managing Member, its share of the Gross Clawback Amount, determined as follows:

	 	(i)	 	The Sponsor Member shall be responsible for its Carry
Percentage (i.e., 35%);
	 
	 	(ii)	 	The IP Members as a group shall be responsible for their
aggregate Carry Percentage of the Gross Clawback Amount, with each such IP
Member being severally (and not jointly) responsible for the amount determined
pursuant to Appendix B hereto and only to the extent of clause
(c) below; and
	 
	 	(iii)	 	The Residual Member shall be responsible for its Carry
Percentage of the Gross Clawback Amount;

provided that if Carry Percentages have changed over the Term of the Company, the
determination shall be based on the relative amounts of Carry Distributions received over the Term
of the Company or any other method determined by the Managing Member to appropriately take into
account such variations.

     (c) In no event will an IP Member be personally liable for a clawback obligation that exceeds
the aggregate amount of such IP Member’s Alternative Clawback Reserve and IP Clawback Reserve. In
no event shall an IP Member be responsible for another Member’s share of the Gross Clawback Amount.

     (d) The Residual Member’s obligation to satisfy its clawback obligation will be limited to
those amounts established as a clawback reserve under the terms of the limited partnership
agreement governing the Residual Member and will be a several (and not joint) obligation of the
partners in the Residual Member.

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ARTICLE V

PROGRAM MANAGER

5.1 Program Manager

     The Program Manager will be responsible for managing the day-to-day activities of the Company
and the Company’s assets, subject to the direction of the Managing Member; provided
that the Program Manager will have no authority to legally bind the Company without the
express consent of the Managing Member.

5.2 Fees

     The Program Manager shall not be entitled to any fees, payments, or distributions other than
as expressly provided herein, or as otherwise approved by the Managing Member. To the extent the
Program Manager or any employee or agent (in such capacity) of the Program Manager receives any
Deal Fees with respect to a Program Asset, the calculations called for in this Agreement will be
adjusted so that total amounts received by the Program Manager or such employee or agent (in such
capacity) of the Program Manager are the same as if all such Deal Fees had been paid to the
Company.

ARTICLE VI

MANAGING MEMBER

6.1 Management Authority

     (a) The management of the Company shall be vested exclusively in the Managing Member, and the
Managing Member shall have full control over the business and affairs of the Company. The Managing
Member shall have the power on behalf and in the name of the Company to carry out any and all of
the objectives and purposes of the Company and to perform all acts and enter into and perform all
contracts and other undertakings which the Managing Member, in its reasonable discretion, deems
necessary or advisable or incidental thereto, including the power to acquire and dispose of any
security (including marketable securities) or incur indebtedness or guarantee the indebtedness of
the Portfolio Company.

     (b) Third parties dealing with the Company can rely conclusively upon the Managing Member’s
certification that it is acting on behalf of the Company and that its acts are authorized. The
Managing Member’s execution of any agreement on behalf of the Company is sufficient to bind the
Company for all purposes.

     (c) The Managing Member will have the right and power to establish the availability and terms
of any offering of opportunities for an IP Member or any Family Related Member or any other “friend
or family member” of an IP Member to co-invest alongside the Company in all or part of the
Company’s investments.

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6.2 No Liability to Company or Members

     No Covered Party shall be liable to the Company or any Member for any action taken, or failure
to act, on behalf of the Company (or on behalf of the Managing Member or the Program Manager with
respect to the Company) if such Covered Party (a) acted honestly and in good faith with a view to
the best interests of the Company, or, as the case may be, to the best interests of the other
entity for which the Covered Party acted as director, officer, employee, agent, or in a similar
capacity at the request of the Managing Member or the Program Manager for the benefit of the
Company; and (b) in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, the Covered Party had reasonable grounds for believing that
the Covered Party’s conduct was lawful. In addition, any Covered Party who has delegated to any
other Person (other than to another Covered Party) any part of its functions (including
participating in the management of or rendering professional advice or other services in respect of
any Program Asset) shall not be liable, responsible, or accountable in damages or otherwise to the
Company or to any Member for any loss incurred or suffered by reason of any action by such other
Person unless the delegating Covered Party did not (x) act honestly and in good faith with a view
to the best interests of the Company, or, as the case may be, to the best interests of the other
entity for which the Covered Party acted as director, officer, employee, agent, or in a similar
capacity at the request of the Managing Member or the Program Manager for the benefit of the
Company; and (y) in the case of a criminal or administrative action or proceeding that is enforced
by a monetary penalty, have reasonable grounds for believing that the Covered Party’s conduct was
lawful with respect to such delegation. For the avoidance of doubt, nothing in the immediately
preceding sentence shall be deemed to prevent the Company, the Managing Member or the Program
Manager from asserting a cause of action against the delegate of a Covered Party for any loss
caused by the action, or failure to act, of such delegate and the Managing Member shall cause the
Company to effectively pursue any such cause of action to the extent it would be in the reasonable
best interests of the Company to do so.

6.3 Indemnification

     (a) Subject to Section 6.3(c), the Company shall indemnify each Covered Party against
all costs, charges, and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by the Covered Party in respect of any civil, criminal,
administrative, investigative, or other proceeding in which the Covered Party is involved because
of such Covered Party’s association with the Company, the Managing Member, or the Program Manager
if such Covered Party (i) acted honestly and in good faith with a view to the best interests of the
Company or, as the case may be, to the best interests of the other entity for which the Covered
Party acted as director, officer, employee, agent, or in a similar capacity at the request of the
Managing Member or the Program Manager and for the benefit of the Company; and (ii) had reasonable
grounds for believing that such Covered Party’s conduct was lawful, in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty.

     (b) Subject to Section 6.3(c), the Company shall advance moneys to a Covered Party for
the costs, charges, and expenses of a proceeding referred to in Section 6.3(a). The Covered
Party shall repay the moneys if the Covered Party does not fulfill the conditions of Section
6.3(a).

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     (c) Before seeking indemnification from the Company, a Covered Party seeking such
indemnification shall use all reasonable efforts to seek indemnification from the following sources
(in the following order of priority): first, from the Portfolio Company, including any insurance
provided by, or purchased on behalf of a Covered Party by, the Portfolio Company; and second, from
the Managing Member or the Program Manager, including from any insurance provided by the Managing
Member or the Program Manager. To the extent any unpaid indemnification obligation remains after
the Covered Party has received indemnification from the foregoing sources, the Company shall
indemnify such Covered Party for such shortfall.

ARTICLE VII

NON-MANAGING MEMBERS

7.1 Limited Liability

     No Non-Managing Member shall be personally liable for any obligations of the Company or have
any obligation to make contributions to the Company other than such Non-Managing Member’s initial
contribution pursuant to Section 3.1 or as required pursuant to Section 4.6 or
Section 7.6; provided that a Non-Managing Member shall be required to return any
distribution made to it in error. To the extent any Non-Managing Member is required by the LLC Act
to return to the Company any distributions made to it and does so, such Non-Managing Member shall
have a right of contribution from each other Non-Managing Member similarly liable to return
distributions made to it to the extent that such Non-Managing Member has returned a greater
percentage of the total distributions made to it and required to be returned by it than the
percentage of the total distributions made to such other Non-Managing Member and so required to be
returned by it.

7.2 No Participation in Management

     The Non-Managing Members (in their capacity as such) shall not participate in the control,
management, direction, or operation of the affairs of the Company and shall have no power to bind
the Company.

7.3 Transfer of LLC Interests by Non-Managing Members

     (a) A Non-Managing Member may not Transfer all or a portion of its interest in the Company
without the consent of the Managing Member; provided that the Managing Member shall not
unreasonably withhold its consent to a Transfer by an IP Member to a Family Related Member of such
IP Member.

     (b) Unless and until the Managing Member consents to the admission of a transferee as a
substituted Non-Managing Member in accordance with this Section 7.3, the transferor shall
remain liable for all liabilities and obligations relating to the transferred beneficial interest,
if any, and the transferee shall become an assignee of only a beneficial interest in Company
profits, losses and distributions of such interest. No consent of any other Non-Managing Member
shall be required as a condition precedent to any Transfer.

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     (c) Unless the Managing Member otherwise determines in its sole discretion, the transferor and
transferee of any Non-Managing Member’s interest shall be jointly and severally obligated to
reimburse the Managing Member and the Company for all reasonable expenses (including attorneys’
fees and expenses) of any Transfer or proposed Transfer of a Non-Managing Member’s interest,
whether or not consummated.

     (d) Any substituted Non-Managing Member admitted to the Company with the consent of the
Managing Member shall succeed to all the rights and be subject to all the obligations of the
transferring or assigning Non-Managing Member with respect to the interest to which such
Non-Managing Member was substituted. The Managing Member may modify
Schedule I hereof to reflect such admittance of any substituted Non-Managing Member.
Such substituted Non-Managing Member shall be treated as having received all of the allocations and
distributions received by the transferring or assigning Non-Managing Member, if any.

     (e) Any Transfer that violates this Section 7.3 shall be void and the purported buyer,
assignee, transferee, pledgee, mortgagee, or other recipient shall have no interest in or rights to
Company assets, profits, losses, or distributions, and neither the Managing Member nor the Company
shall be required to recognize any such purported interest or rights.

7.4 No Termination

     Neither the substitution, death, incompetency, dissolution (whether voluntary or involuntary),
nor bankruptcy of a Non-Managing Member shall affect the existence of the Company, and the Company
shall continue for the Term of the Company until its existence is terminated as provided herein.

7.5 Additional Non-Managing Members

     Additional Non-Managing Members will be admitted only with the consent of the Managing Member
on such terms as agreed upon by the Managing Member and the Person seeking admission to the
Company.

7.6 Reimbursement for Payments on Behalf of a Member

     (a) If the Company is obligated to pay any amount to a governmental agency or body or to any
other Person (or otherwise make a payment) because of a Member’s status or otherwise specifically
attributable to a Member (including, without limitation, federal withholding taxes with respect to
foreign Members, state withholding taxes, state personal property taxes, state unincorporated
business taxes, etc.) then such Member (the “Reimbursing Member”) shall reimburse the
Company in full for the entire amount paid (including, without limitation, any interest, penalties,
and expenses associated with such payment). At the election of the Managing Member, the amount to
be reimbursed may be charged against the Capital Account of the Reimbursing Member, and the Company
shall reduce subsequent distributions which would otherwise be made to the Reimbursing Member until
the Company has recovered the amount to be reimbursed; provided that the amount of such
reduction shall be deemed to have been distributed for all purposes of this Agreement, but such
deemed distribution shall not further reduce the Reimbursing Member’s Capital Account.

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     (b) A Member’s obligation to reimburse the Company under this Section 7.6 shall
survive the termination, dissolution, liquidation, and winding-up of the Company, and for purposes
of this Section 7.6, the Company shall be treated as continuing in existence.

ARTICLE VIII

DURATION AND TERMINATION

8.1 Term

     The Company shall continue until the occurrence of any of the following events: (i) the entry
of an order of dissolution by a court under the LLC Act or (ii) an election by the Managing Member
to dissolve the Company.

8.2 Termination and Liquidation

     (a) The Company shall not terminate immediately upon the expiration of its Term under
Section 8.1, but shall cease to engage in further business except to the extent necessary
to promptly wind-up its affairs, perform existing contracts, and preserve the value of the Program
Assets.

     (b) During the course of winding-up the Company all of the provisions of this Agreement shall
continue to bind the parties and apply to the activities of the Company except as specifically
provided to the contrary, but there shall be no distributions to the Members except as provided in
this Section 8.2.

     (c) Upon the expiration of the Company’s Term, the Managing Member shall take such actions as
it may think fit for winding-up the Company and liquidating the Program Assets, including:

	 	(i)	 	The filing of all certificates and notices of dissolution as
are required by applicable law; and
	 
	 	(ii)	 	The Realization of any Program Asset (unless the Managing
Member intends to distribute such Program Asset in kind); provided that
all such Realizations shall be conducted in an orderly and businesslike manner
so as not to involve undue sacrifice.

The Managing Member in taking such actions may exercise and shall have the benefit of all rights,
powers, and discretions vested in the Managing Member pursuant to the provisions of this Agreement.
If the Managing Member is not able to act as the liquidator of the Company or exercise the powers
inherent thereto, a liquidator shall be appointed by the Residual Member.

     (d) Upon dissolution of the Company, all Company assets shall be distributed or used as
follows and in the following order of priority:

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	 	(i)	 	For the payment of the debts and liabilities of the Company,
including, without limitation, the expenses of liquidation.
	 
	 	(ii)	 	For the setting up of any reserves which the Managing Member
may deem reasonably necessary for any liabilities or obligations of the
Company.
	 
	 	(iii)	 	To the Members in accordance with the provisions of
Article IV.

     (e) The Company shall be terminated only after the Company assets have been distributed as
provided in this Section 8.2.

ARTICLE IX

VALUATION OF COMPANY ASSETS

9.1 Normal Valuation

     For purposes of this Agreement, the value of any asset as of any date (or in the event such
date is a holiday or other day which is not a business day, as of the immediately preceding
business day) shall be valued by the Managing Member in good faith using methods it considers
appropriate.

9.2 Restrictions on Transfer or Blockage

     Any security which is held under a representation that it has been acquired for investment
purposes and not with a view to public sale or distribution, or which is held subject to any other
restriction on transfer, or where the size of the Company’s holdings compared to the trading volume
would adversely affect the marketability of such security, shall be valued at such discount as the
Program Manager deems reasonably necessary to reflect the marketability and value of such security.

ARTICLE X

BOOKS OF ACCOUNTS; MEETINGS

10.1 Books

     The Company shall maintain complete and accurate books of accounts of the Company’s affairs at
the Company’s principal office.

10.2 Fiscal Year

     The fiscal year and taxable year of the Company shall be the calendar year, unless otherwise
determined by the Managing Member.

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10.3 Reports

     The Managing Member shall furnish to each Member the following information and reports
prepared in accordance with U.S. generally accepted accounting principles (“GAAP”):

     (a) As soon as practicable after the end of each fiscal year commencing with the first year in
which the Company is in operation for a full fiscal year, (i) financial statements for the Company
for such year (audited by a firm of independent certified public accountants of
recognized national standing selected by the Managing Member), and (ii) a statement of each
Member’s closing Capital Account balance as of the end of such year; and

     (b) As soon as practicable after the end of each fiscal year, the Company’s United States
federal income tax return, including such Member’s Schedule K-1 for such fiscal year.

ARTICLE XI

MISCELLANEOUS

11.1 Amendments

     This Agreement may be amended by the written consent of the Managing Member, provided
that if such amendment would adversely affect any Carried Interest Member, then the Carried
Interest Member so affected must consent to such amendment. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended by the Managing Member without the consent
of any other Member in order to cure any ambiguity or error, make an inconsequential revision,
provide clarity, comply with any law or regulation or correct or supplement any provision herein
which may be defective or inconsistent with any other provisions herein; provided that,
except with respect to amendments necessary to comply with any law or regulation, such amendment
does not materially and adversely affect any Non-Managing Member.

11.2 Successors

     Except as otherwise provided herein, this Agreement shall inure to the benefit of and be
binding upon the Members and their legal representatives, heirs, successors, and assigns.

11.3 Governing Law; Severability

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Florida, and, to the maximum extent possible, in such manner as to comply with all the terms and
conditions of the LLC Act. If it is determined by a court of competent jurisdiction that any
provision of this Agreement is invalid under applicable law, such provision shall be ineffective
only in such jurisdiction and only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

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11.4 Notices

     All notices, demands, and other communications to be given and delivered under or by reason of
provisions under this Agreement shall be in writing and shall be deemed to have been given on the
date when personally delivered, when mailed by first class mail, when sent by facsimile or
transmitted by email or the internet, or when sent by reputable overnight courier service, in each
case to the recipient at the address, facsimile number or email address set forth in Schedule
I hereof or to such other address, facsimile number, or email address, or to the attention of
such other Person as has been indicated in writing to the Managing Member.

11.5 Arbitration

     The parties to this Agreement shall each use good faith efforts for a period of 30 days (or
such longer time as agreed to by the applicable parties) to try to resolve any controversy,
dispute, or claim arising out of or in connection with this Agreement, or the breach, termination
or validity hereof. Thereafter, if such controversy, dispute, or claim remains, it shall be
settled by final and binding arbitration to be conducted by an arbitration tribunal in Fort
Lauderdale, Florida, pursuant to the rules of the American Arbitration Association. The
arbitration tribunal shall consist of three arbitrators. The party initiating the controversy,
dispute, or claim that led to arbitration shall nominate one arbitrator in the request for
arbitration and the other party shall nominate a second arbitrator in the answer thereto within 30
days of receipt of the request; provided that if there are multiple initiating or answering
parties, the arbitrator selected must be reasonably acceptable to all initiating or answering
parties, as applicable. The two arbitrators so named will then jointly appoint the third
arbitrator. If the answering party fails to nominate its arbitrator within the 30-day period, or
if the arbitrators named by the parties fail to agree on the third arbitrator within 60 days, the
office of the American Arbitration Association in New York, New York shall make the necessary
appointments of such arbitrator(s). The decision or award of the arbitration tribunal (by a
majority determination, or if there is no majority, then by the determination of the third
arbitrator, if any) shall be final, and judgment upon such decision or award may be entered in any
competent court or application may be made to any competent court for judicial acceptance of such
decision or award and an order of enforcement. In the event of any procedural matter not covered
by the aforesaid rules, the procedural law of the State of Florida shall govern.

11.6 Miscellaneous

     This Agreement (including the Appendices hereto) contains the entire agreement among the
parties and supersedes all prior arrangements or understanding with respect thereto. Descriptive
headings are for convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement. This Agreement may be executed in any number of counterparts, any
one of which need not contain the signatures of more than one party, but all of such counterparts
together shall constitute one agreement. Whenever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and the plural, and
pronouns stated in either the masculine, the feminine or the neuter gender shall include the
masculine, the feminine, and the neuter.

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11.7 No Third Party Beneficiaries

     No Person that is not a party hereto shall have any rights or obligations pursuant to this
Agreement. The rights and obligations set forth herein are for the benefit of the parties hereto
only and do not create or grant any rights to third parties.

[ THIS SPACE INTENTIONALLY LEFT BLANK. ]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	MANAGING MEMBER:

SPONSOR MEMBER:

WOODBRIDGE HOLDINGS CORPORATION

 	 
	 	By:  	/s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	RESIDUAL MEMBER:

WOODBRIDGE EXECUTIVE INCENTIVE PLAN 1, LP

 	 
	 	By:  	WOODBRIDGE FUND I, LLC, its General Partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                WOODBRIDGE HOLDINGS CORPORATION,
 	 
	 	 	its Sole Member 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 

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	 	IP MEMBERS:

 	 
	 	/s/ Alan B. Levan
 	 
	 	Alan B. Levan 	 
	 
	 	 	 
	 	                                              /s/ John E. Abdo
 	 
	 	John E. Abdo 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ Seth M. Wise
 	 
	 	Seth M. Wise 	 
	 	 	 

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	 	PROGRAM MANAGER:

WOODBRIDGE HOLDINGS CORPORATION

 	 
	 	By:  	/s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

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Schedule I

Core Communities, LLC

List of Carried Interest Members and Applicable Carry Percentages

	 	 	 	 	 
	Carried
Interest Member	 	Carry Percentage	 
	 
	 	 	 	 
	Sponsor Member
	 	 	35.0	%
	 
	 	 	 	 
	IP Member (divided as listed below)
	 	 	32.5	%
	 
	 	 	 	 
	Alan Levan
	 	 	38.25%	 
	 
	 	 	 	 
	John Abdo
	 	 	38.25%	 
	 
	 	 	 	 
	Seth Wise
	 	 	23.50%	 
	 
	 	 	 	 
	Residual Member
	 	 	32.5	%
	 	 
	TOTAL
	 	 	100.0	%

 

 

Schedule II

Program Expenses

	 	 	 	 	 	 
	 
	 	Amounts Included in Program Expenses	 	 	Amounts Excluded from Program Expenses	 
	 	Salaries and bonuses

Salary for any investment professionals
of the Program Manager, except where
Woodbridge executives are the investment
professionals.

Salaries and cash bonus of direct
dedicated staff members.

	 	 	Salaries and bonuses

Woodbridge Holdings incentive stock
options or stock grants to any investment
professional or dedicated staff member as
part of a Woodbridge Holdings-wide
incentive compensation program.	 
	 	Direct Expenses

Direct dedicated expenses incurred
directly by the Program Manager,
including rent, facilities charges,
equipment and supplies, except where
Woodbridge Holdings executives are the
investment professionals.

Outside legal and accounting expenses
incurred for services rendered with
respect to the Program Manager or the
Company, including formation costs, and
tax return preparation.

Unreimbursed costs of transactions, including due diligence
expenses and the carrying costs of
deposits, to the extent the transaction that generated the cost does
not close.

Travel expenses neither capitalized as
part of the acquisition of a completed
transaction nor borne by the target
company.

Standard charges by internal Woodbridge
Holdings personnel for provision of
back-office support services directly
related to the program or Program Assets
(i.e., providing the accounting services
for the Company, providing human
resources services for the
Company).

Standard charges by BFC Shared Services
for back-office support services directly
related to the program or Program
Assets.

	 	 	Direct Expenses

Time of Investment Committee in
evaluating investment recommendations.	 
	 

 

 

	 	 	 	 	 	 
	 
	 	Amounts Included in Program Expenses	 	 	Amounts Excluded from Program Expenses	 
	 	Interest on borrowings of the Program
Manager, including any that accrued at
the rate of 12% compounded per annum on
amounts received through a pre-approved
line of credit from Woodbridge Overhead
Funding, LLC. For purposes of this
provision, all amounts of funds provided
to the Program Manager shall be treated
as borrowings and shall accrue 12%
interest regardless of whether such funds
were provided in the form of loans,
equity capital, or otherwise.
	 	 	 	 
	 	Allocation of Woodbridge
Holdings Overhead

None.

	 	 	Allocation of Woodbridge
Holdings Overhead

General corporate overhead (i.e., public
company costs, office expenses for
non-dedicated staff, investor relations
and accounting staff not dedicated,
analytical staff providing analytics to
Woodbridge Holdings, management for
oversight of programs and Program
Assets).

Any other overhead expenses not expressly
included on this Schedule II as Program
Expenses.	 
	 

 

 

APPENDIX A: 

Tax and Accounting Provisions

A-1 Definitions

     For purposes of this Appendix A, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit
balance, if any, in such Member’s Capital Account, as of a specified time, after giving effect to
the following adjustments:

     (a) credit to such Member’s Capital Account any amounts that such Member is obligated to
restore or deemed obligated to restore pursuant to Treasury Regulations Section
1.704-1(b)(2)(ii)(c) and the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1)
and Treasury Regulations Section 1.704-2(i)(5); and

     (b) debit to such Member’s Capital Account the items described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     “Book Value” means, with respect to any asset, the asset’s adjusted basis for U.S.
federal income tax purposes, except as follows:

     (a) the initial Book Value of any asset that is not Contributed Property as defined in the
Agreement but is otherwise contributed or deemed contributed to the Company shall be such asset’s
gross fair market value at the time of such contribution as determined by the Managing Member
pursuant to Article IX of the Agreement;

     (b) the initial Book Value of any asset that is Contributed Property as defined in Section
3.1(a) of the Agreement shall be the value set forth in Section 3.1(a) of the
Agreement;

     (c) the Book Value of all Company assets may be adjusted in the discretion of the Managing
Member to equal their respective gross fair market values, as determined by the Managing Member
pursuant to Article IX of the Agreement, at the times specified in Treasury Regulations
Section 1.704-1(b)(2)(iv)(f);

     (d) any adjustments to the adjusted basis of any asset of the Company pursuant to Section 734
or Section 743 of the Code shall be taken into account in determining such asset’s Book Value in a
manner consistent with Treasury Regulations Section 1.704-1(b)(2)(iv)(m);

     (e) the Book Value of any Company asset distributed or deemed distributed by the Company to
any Member shall be adjusted immediately prior to such distribution to equal its
gross fair market value as of the date of distribution, as determined by the Managing Member
pursuant to Article IX of the Agreement; and

A-1

 

     (f) if the Book Value of an asset has been determined pursuant to clauses (a),
(c) or (d) of this definition, to the extent permitted by the Treasury Regulations,
such Book Value shall thereafter be adjusted in the same manner as would the asset’s adjusted basis
for U.S. federal income tax purposes, except that depreciation and amortization deductions shall be
computed based on the asset’s Book Value as so determined, rather than on its adjusted tax basis.

     “Net Profits” and “Net Losses” mean, for any period, the taxable income or
loss, respectively, of the Company for such period, in each case as determined for U.S. federal
income tax purposes, but computed with the following adjustments:

     (a) items of income, gain, loss and deduction (including, without limitation, gain or loss on
the disposition of any Company asset and depreciation or other cost recovery deduction or expense)
shall be computed based upon the Book Value of the Company’s assets rather than upon such assets’
adjusted bases for U.S. federal income tax purposes;

     (b) any tax-exempt income received by the Company shall be deemed for these purposes only to
be an item of gross income;

     (c) any expenditure of the Company described in Section 705(a)(2)(B) of the Code (or treated
as described therein pursuant to Treasury Regulations under Section 704(b) of the Code) shall be
treated as a deductible expense;

     (d) there shall be taken into account any separately stated items under Section 702(a) of the
Code;

     (e) if the Book Value of any Company asset is adjusted pursuant to clauses (c) or
(e) of the definition of “Book Value” above, or pursuant to clause (d) of such
definition (but only to the extent the adjustment is attributable to a distribution of Investment
Proceeds not in liquidation of a Member’s Company interest), the amount of such adjustment shall be
taken into account in the period of adjustment as gain or loss from the disposition or deemed
disposition of such asset for purposes of computing Net Profits and Net Losses; and

     (f) items of income, gain, loss, deduction or credit allocated pursuant to Section A-6
of this Appendix A shall not be taken into account.

     “Tax Matters Partner” has the meaning set forth in Section A-6.

A-2 Maintenance of Capital Accounts

     (a) A Capital Account shall be maintained for each Member in accordance with Section 704(b) of
the Code and Treasury Regulations Sections 1.704-1(b) and 1.704-2. The initial balance of each
Capital Account shall be equal to such Member’s initial capital contribution to the Company.

A-2

 

     (b) The Capital Account of each Member shall be increased by (i) the amount of any cash
contributed by such Member to the capital of the Company, (ii) in the case of any property
contributed by such Member to the capital of the Company, the Book Value of such property (net of
liabilities that the Company is considered to assume or take the property subject to) when
contributed, (iii) the amount of any liabilities of the Company that are assumed by such Member
(except for liabilities described in Section A-2(c)(ii) of this Appendix A that are
assumed by such Member) for purposes of Treasury Regulations Section 1.704-1(b)(2)(iv)(c), (iv) the
Net Profits allocated to such Member, and (v) any gross income and gain allocated to such Member.

     (c) The Capital Account of each Member shall be decreased by (i) the amount of any cash
distribution to such Member when made, (ii) the Book Value of any property distributed to such
Member by the Company (net of liabilities that the Member is considered to assume, or take property
subject to) when distributed, (iii) the amount of any liabilities of such Member that are assumed
by the Company (except for liabilities described in Section A-2(b)(ii) of this Appendix
A that are assumed by the Company) for purposes of Treasury Regulations Section
1.704-1(b)(2)(iv)(c), (iv) the Net Losses allocated to such Member, and (v) any gross deductions
and loss allocated to such Member.

     (d) In the event that all or a portion of an interest in the Company is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent such Capital Account relates to the Transferred interest in the
Company.

     (e) The Capital Account of each Member shall be adjusted to reflect any adjustment to the Book
Value of the Company’s assets attributable to the application of Section 734 of the Code in respect
of a distribution in liquidation of such Member’s interest in the Company to the extent required
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

     (f) It is the intention of the parties that the Capital Accounts of the Members be kept in the
manner required under Section 704(b) of the Code and Treasury Regulations Sections 1.704-1(b) and
1.704-2. To the extent any additional adjustment to the Capital Accounts is required by such
provisions, the Managing Member is hereby authorized to make such adjustment after notice to the
Members.

     (g) Except as expressly required herein, no Member shall be required to restore any negative
balance in its Capital Account. No allocation to any Member of any loss or deduction, whether
attributable to depreciation or otherwise, shall create any obligation of that Member to the
Company or any other Member, even if the allocation reduces such Member’s Capital Account or
creates or increases a deficit in its Capital Account.

A-3

 

A-3 Allocations of Profits and Losses

     (a) After the application of Section A-4, Net Profits and Net Losses for any taxable
year, or portion thereof, shall be allocated among the Members (and credited or debited to their
Capital Accounts) in such manner so that, after taking into account distributions by the Company
and contributions made to the Company through the end of such taxable year and the
allocations of Net Profits and Net Losses for such taxable year, (i) the respective positive
Capital Account balances of the Members would correspond as closely as possible to the amount each
Member would receive as a cash distribution pursuant to Article IV of the Agreement, if the
Company were to liquidate completely immediately after the end of such taxable year and (ii) any
resulting deficit Capital Account balances of the Members would correspond as closely as possible
with the manner in which economic responsibility for Company deficit balances (as determined in
accordance with the principles of Treasury Regulations under Section 704 of the Code) would be
borne by the Members under the terms of this Agreement if the Company were to liquidate completely
immediately after the end of such taxable year. For purposes of the preceding sentence, the amount
of cash to be distributed to each Member, the amount of each Member’s Capital Account and the
amount of each Member’s economic responsibility for Company deficit balances, upon the assumed
liquidation, shall be computed by assuming that in connection with such liquidation, the Company
sold all of its assets for amounts such that no Net Profits or Net Losses result from the sale and
settled all of its liabilities for amounts such that no Net Profits or Net Losses result from the
settlement. For purposes of applying this Section A-3, the Capital Account balance of each
Member shall be increased by such Member’s share of “partnership minimum gain” and “partner minimum
gain” (within the meaning of and in accordance with the Treasury Regulations under Section 704(b)
of the Code). Subject to the other provisions of this Appendix A, an allocation to a
Member of a share of Net Profit or Net Loss shall be treated as an allocation of the same share of
each item of income, gain, loss or deduction that is taken into account in computing Net Profit or
Net Loss.

     (b) If a Member Transfers, acquires, or redeems an interest in the Company during a taxable
year, the Net Profit or Net Loss (and other items referred to in Section A-4 of this
Appendix A) attributable to such interest for such year shall be allocated between the
transferring Member and the transferee (or the other Members in the Company) by any method
permitted under Section 706 of the Code as selected by the Managing Member.

A-4 Regulatory Allocations and Special Allocations

     (a) Notwithstanding any other provision of the Agreement or this Appendix A, (i)
“partner nonrecourse deductions” (as defined in Treasury Regulations Section 1.704-2(i)), if any,
of the Company shall be allocated for each period to the Member that bears the economic risk of
loss within the meaning of Treasury Regulations Section 1.704-2(i), and (ii) “nonrecourse
deductions” (as defined in Treasury Regulations Section 1.704-2(b)) and “excess nonrecourse
liabilities” (as defined in Treasury Regulations Section 1.752-3(a)), if any, of the Company shall
be allocated to the Members in accordance with their respective percentage interests in Net Losses.

     (b) The Agreement and this Appendix A shall be deemed to include “qualified income
offset,” “minimum gain chargeback” and “partner nonrecourse debt minimum gain chargeback”
provisions within the meaning of Treasury Regulations under Section 704(b) of the Code.
Accordingly, notwithstanding any other provision of this Agreement or this Appendix A,
items of gross income shall be allocated to the Members on a priority basis to the extent and in
the manner required by such provisions.

A-4

 

     (c) To the extent that Net Losses or items of loss or deduction otherwise allocable to a
Member hereunder would cause such Member to have an Adjusted Capital Account Deficit as of the end
of the taxable year to which such Net Losses or items of loss or deduction relate (after taking
into account the allocation of all items of income and gain for such taxable period), such Net
Losses or items of loss or deduction shall not be allocated to such Member and instead shall be
allocated to the Members in accordance with Section A-3 of the Agreement as if such Member
were not a Member.

     (d) Any allocations required to be made pursuant to clauses (a), (b), and
(c) above (the “Regulatory Allocations”) (other than allocations, the effect of
which are likely to be offset in the future by other special allocations) shall be taken into
account, to the extent permitted by the Treasury Regulations, in computing subsequent allocations
of income, gain, loss or deduction pursuant to Section A-3 so that the net amount of any
items so allocated and all other items allocated to each Member shall, to the extent possible, be
equal to the amount that would have been allocated to each Member pursuant to Section A-3
had such Regulatory Allocations under this Section A-4 not occurred.

     (e) If any Member is treated for income tax purposes as realizing ordinary income because of
receipt of its interest in the Company (whether under Section 83 of the Code or any similar
provisions of any law, rule or regulations or any other applicable law, rule, regulation or
doctrine) and the Company is entitled to any offsetting deduction, the Company’s deduction shall be
allocated among the Members in such manner as to, as nearly as possible, offset such ordinary
income realized by such Member.

A-5 Tax Allocations

     (a) For federal income tax purposes, except as otherwise provided in this Section A-5,
each item of income, gain, loss, and deduction and credit shall be allocated among the Members in
the same manner as its corresponding item of book income, gain, loss, deduction or credit is
allocated pursuant to this Appendix A.

     (b) In accordance with Sections 704(b) and 704(c) of the Code and the Treasury Regulations
thereunder, income, gain, loss and deduction with respect to any Company asset contributed (or
deemed contributed) to the capital of the Company shall, solely for federal income tax purposes, be
allocated among the Members so as to take into account any variation between the adjusted basis of
such Company asset for federal income tax purposes and its Book Value upon its contribution (or
deemed contribution). If the Book Value of any Company asset is adjusted, subsequent allocations
of taxable income, gain, loss and deduction with respect to such Company asset shall take account
of any variation between the adjusted basis of such Company asset for federal income tax purposes
and the Book Value of such Company asset in the manner prescribed under Code Sections 704(b) and
704(c) and the Treasury Regulations thereunder. The Managing Member shall select the manner by
which variations between Book Value and adjusted basis are taken into account in accordance with
Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder.

A-5

 

     (c) The provisions of this Appendix A (and other related provisions in the Agreement)
pertaining to the allocation of items of Company income, gain, loss, deduction, and
credit shall be interpreted consistently with the Treasury Regulations, and to the extent
unintentionally inconsistent with such Treasury Regulations, shall be deemed to be modified to the
extent necessary to make such provisions consistent with the Treasury Regulations.

A-6 Tax Matters Partner; Management Authority Regarding Tax and Accounting

     (a) The Managing Member is designated the “Tax Matters Partner” (as defined in Section
6231(a)(7) of the Code) to manage administrative tax proceedings conducted at the Company level by
the Internal Revenue Service with respect to Company matters. The Managing Member is specifically
directed and authorized to take whatever steps the Managing Member, in its sole discretion, deems
necessary or desirable to perfect such designation, including, without limitation, filing any forms
or documents with the Internal Revenue Service and taking such other action as may from time to
time be required under Treasury regulations. The Tax Matters Partner shall have full authority to
extend the statute of limitations and control any tax audit or other proceeding on behalf of the
Company. Expenses of administrative proceedings relating to the determination of Company items at
the Company level undertaken by the Tax Matters Partner will be deemed to be Program Expenses.

     (b) All matters concerning (i) allocations of Net Profits and Net Losses and allocations for
tax purposes, (ii) distributions by the Company, including the taxes thereon, and (iii) accounting
procedures and determinations, tax determinations, determinations as to on whose behalf expenses
were incurred and the attribution of fees and expenses to a Program Asset, and other determinations
not specifically and expressly provided for by the terms of this Agreement, shall be determined by
the Managing Member, whose determination shall be final and conclusive as to all the Members absent
manifest clerical error.

     (c) At the Managing Member’s sole discretion, the Managing Member may cause the Company to
make or refrain from making any and all elections permitted by the Code and the Treasury
Regulations and any state, local, or foreign tax elections. Notwithstanding the foregoing, it is
intended that the Company be treated as a partnership for U.S. federal income tax purposes, and
neither the Company nor any Member shall make any election inconsistent with such treatment without
the unanimous written consent of the Members.

A-6

 

APPENDIX B: 

Apportionment and Modification of 

Carried Interest to IP Members

B-1 Definitions

     For purposes of this Appendix B, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Acquisition Date” means, with respect to a Program Asset, the date the Company first
made an investment in such Program Asset (or in the case of a Program Asset that is contributed to
the Company, the date of such contribution).

     “Allocated Reimbursement Payments” means the amount of Reimbursement Payments
allocated by the Managing Member to each Program Asset. Unless the Managing Member adopts another
method (with notification to each other Member), the Managing Member shall allocate the
Reimbursement Payments made with respect to a particular year to and among the Program Assets held
by the Company during that year based on the relative Invested Capital in such Program Assets and
adjusted (on a weighted average basis) to take into account Program Assets that are held for less
than an entire year.

     “Carry Account” has the meaning set forth in Section B-3.

     “Carry Loss” means, with respect to the Realization of any Program Asset, 20% of the
amount, if any, by which the combined Investment Proceeds and Sponsor Proceeds generated by such
Program Asset are less than the sum of the Full Return Amount and the Hurdle Return Amount of such
Program Asset. The Managing Member shall use its reasonable discretion in determining the amount
of Carry Loss (including adjusting previous allocations of Carry Loss) so as to cause the amount of
Carry Loss to accurately reflect the amount by which all Carry Distributions that will ultimately
be apportioned by the Company with respect to all other Program Assets will be reduced, which
determination shall then be binding on the Company and the Members.

     “Carry Profit” means with respect to any particular Program Asset the amount by which
the Investment Proceeds or Sponsor Proceeds generated by that Program Asset produce or lead to the
production of Carry Distributions, as determined by the Managing Member. In general, the Carry
Profit with respect to any Program Asset will equal the sum of the following amounts:

     (a) 0% of that portion of the combined Investment Proceeds and Sponsor Proceeds from such
Program Asset as does not exceed the sum of the applicable Full Return Amount and the applicable
Hurdle Return Amount;

     (b) 80% of that portion of the combined Investment Proceeds and Sponsor Proceeds that is in
excess of the sum of the applicable Full Return Amount and the applicable Hurdle Return Amount but
that is less than the sum of the applicable Full Return Amount and 133% of the applicable Hurdle
Return Amount; and

B-1

 

     (c) to the extent in excess of the sum of clauses (a) and (b) above, (i) 20%
of that portion of the Investment Proceeds that is in excess of the sum of the applicable Full
Return Amount plus (ii) 100% of any Sponsor Proceeds.

The Managing Member shall use its discretion in determining the amount of Carry Profit (including
adjusting previous allocations of Carry Profit) so as to cause the amount of Carry Profit (net of
the allocated Carry Loss) to accurately reflect the amount of Carry Distributions that will
ultimately be distributed and that are allocable to each Program Asset.

     “Cause Event” means with respect to any IP Member,

     (a) any act or omission constituting gross negligence, willful misconduct, or fraud in the
performance of such IP Member’s duties or obligations as an employee of the Program Manager;

     (b) any action or omission that causes there to be a material breach of any applicable
management agreement to which the Program Manager is a party;

     (c) any willful refusal to perform a duty as directed by Woodbridge or any of its subsidiaries
(including the Managing Member) if such duty is within the scope of such IP Member’s duties to the
Program Manager, Woodbridge or any of its subsidiaries; or

     (d) any conviction of any crime constituting a felony in the jurisdiction involved (other than
a motor vehicle felony for which only a non-custodial penalty is imposed), whether or not involving
the Program Manager or the Company.

     “Full Return Amount” means, with respect to a Program Asset, the sum of (i) the
aggregate Invested Capital and (ii) the Allocated Reimbursement Payments, in each case
attributable to such Program Asset.

     “Hurdle Return Amount” means, with respect to a Program Asset, as of any date of
determination, the summation of an amount calculated on a daily basis through the applicable date
of determination equal to 10% per annum, compounded annually, of (i) the aggregate Invested Capital
and the Allocated Reimbursement Payments, in each case attributable to such Program Asset,
minus (ii) the aggregate amount of all Investment Proceeds attributable to such Program
Asset on or prior to such day.

     “Tenured Asset” means, with respect to any IP Member, any Program Asset acquired by
the Company during the period when such Person was an IP Member (and not a Terminated IP Member) or
any other Program Asset in which such Person has been granted a Carry Percentage by the Managing
Member. For the avoidance of doubt, an IP Member will not receive a Carry Percentage with respect
to any asset that is not a Tenured Asset.

     “Terminated IP Member” means any IP Member whose employment with the Woodbridge
Employer is terminated for any reason, whether voluntarily or involuntarily, and with or without
cause. In the Managing Member’s discretion, an IP Member whose employment with the Woodbridge
Employer is terminated contemporaneously with such IP Member becoming employed by another entity
within Woodbridge shall not be treated as having been
terminated, and the new employer shall become the Woodbridge Employer for purposes of this
definition. For purposes of this Agreement, in the case of any Family Related Member, the
termination of employment with the Woodbridge Employer of the IP Member with whom such Family
Related Member is associated shall cause such Family Related Member to become a Terminated IP
Member.

B-2

 

     “Vested Percentage” means, with respect to an IP Member and each Program Asset, that
percentage to be applied in determining the amount of Carry Profit or Carry Loss to be allocated to
any IP Member as set forth in the vesting provisions in Section B-2.

     “Woodbridge Employer” means, with respect to any IP Member, the Program Manager if the
IP Member is an employee of the Program Manager. Otherwise it means the entity within Woodbridge
that is the employer of such IP Member.

B-2 Vesting Provisions 

     (a) Non-Tenured Assets. An IP Member will have a Vested Percentage of 0% in any Program Asset
that is not a Tenured Asset with respect to such Member.

     (b) Tenured Assets. The Vested Percentage of an IP Member with respect to a Tenured Asset
will be as follows:

	 	(i)	 	Distributions or Realizations While Employed. An IP
Member will have a Vested Percentage of 100% in all Carry Profit or Carry Loss
attributable to any Investment Proceeds or Sponsor Proceeds received by the
Company from such Member’s Tenured Assets, or any other consequences of a
Realization of a Tenured Asset, if those proceeds are received or the
Realization occurs prior to the IP Member becoming a Terminated IP Member. For
the avoidance of doubt, an IP Member shall have a Vested Percentage of 100% in
any Carry Loss associated with an unreversed Impairment that arises on or prior
to an IP Member becoming a Terminated IP Member.
	 
	 	(ii)	 	Termination for Cause. An IP Member will have a Vested
Percentage of 0% in all Carry Profit or Carry Loss attributable to any
Investment Proceeds or Sponsor Proceeds received by the Company from such IP
Member’s Tenured Assets, or any other consequences of a Realization of a
Tenured Asset, if those proceeds are received or the Realization occurs after
such IP Member has become a Terminated IP Member because of the occurrence of a
Cause Event with respect to such IP Member.
	 
	 	(iii)	 	Termination Not for Cause. An IP Member will have a
Vested Percentage of 75% in all Carry Profit or Carry Loss attributable to any
Investment Proceeds or Sponsor Proceeds received by the Company from such IP
Member’s Tenured Assets, or any other consequences of a Realization of a
Tenured Asset, if those proceeds are received or the Realization occurs after
such IP Member has become a Terminated IP Member because (i) the Woodbridge
Employer terminated the employment for a reason other
than the occurrence of a Cause Event with respect to such IP Member or (ii)
of the death, permanent disability or legal incapacity of such IP Member.

B-3

 

	 	(iv)	 	Voluntary Resignation. An IP Member will have a Vested
Percentage as determined pursuant to the following sentence in all Carry Profit
or Carry Loss attributable to any Investment Proceeds or Sponsor Proceeds
received by the Company from such IP Member’s Tenured Assets, or any other
consequences of a Realization of a Tenured Asset, if those proceeds are
received or the Realization occurs after such IP Member has become a Terminated
IP Member because the IP Member voluntarily left the employment of the
Woodbridge Employer. For purposes of this clause (iv), the Vested
Percentage shall be determined separately for each Program Asset and shall
equal: (A) 25% upon the Acquisition Date of such Program Asset, (B) an
additional 12.5 percentage points per year upon each of the first four
anniversaries of the Acquisition Date, and (C) the remainder when the Tenured
Asset is Realized.

     (c) Permitted Modifications. Notwithstanding the foregoing, the Managing Member may, after
consultation with the Program Manager, modify this vesting schedule for any additional IP Member
admitted to the Company pursuant to Section 7.5 of the Agreement, including granting an
additional IP Member the right to have a Vested Percentage in Program Assets whose Acquisition Date
preceded the time such additional IP Member was admitted to the Company.

     (d) Permitted Adjustments. As described in Section B-3(b), the Managing Member, in
its discretion, is permitted to make adjustments, including retroactive adjustments, to the
allocations of Carry Profit and Carry Loss. The ability of the Managing Member to make these
adjustments shall not be restricted by the application of the vesting provisions in this
Section B-2.

     (e) Family Related Member. A Family Related Member’s Vested Percentage shall be equivalent to
the Vested Percentage of the IP Member associated with such Family Related Member.

B-3 Determination of Carry Accounts

     (a) Maintenance of Carry Accounts. A separate bookkeeping account (a “Carry Account”)
shall be maintained for each IP Member. Immediately prior to the Company making any Carry
Distributions or upon the Realization of a Program Asset, the Carry Profit (or Carry Loss)
determined with respect to such distribution or Realization shall be credited (or debited, and, if
necessary, to an amount below zero) to the Carry Account of each IP Member in an amount equal to
such IP Member’s Carry Percentage in the Program Asset giving rise to such Carry Profit (or Carry
Loss) multiplied by such IP Member’s Vested Percentage in such Carry Profit (or Carry Loss). An IP
Member’s Carry Account shall be debited by the amount of Carry Distributions made to such IP
Member.

B-4

 

     (b) Adjustments to Carry Accounts. The Managing Member, in its discretion, is permitted to
make adjustments, including retroactive adjustments, to the allocations of Carry Profit and Carry
Loss so that, on an aggregate basis the Carry Accounts of the IP Members more closely match the
aggregate rights of the IP Members to receive Carry Distributions or to make clawback payments as
provided in Article IV of the Agreement. Except to the extent the Managing Member
determines otherwise (with notice to the other Members), the Managing Member intends to cause any
shortfall in the aggregate net Carry Profits (i.e., net of aggregate Carry Losses) as compared to
the aggregate amount of Carry Distributions (net of clawback payments) distributable to the IP
Members in accordance with Article IV of the Agreement to be allocated on a pro rata basis
to each Program Asset that otherwise produced Carry Profit (and among them based on the relative
amounts of Carry Profit).

     (c) Deemed Realization. Solely for purposes of determining an IP Member’s Carry Account, the
Managing Member may, upon the admittance of a new Carried Interest Member or at any other time,
deem there to have been a Realization of one or more Program Assets at the Fair Market Value at
such time of such Program Asset, in which case the deemed Carry Profit or Carry Loss derived from
such deemed Realization shall be allocated among the IP Members and charged to the Carry Accounts
of the IP Members. Any future actual or deemed Realization of a Program Asset shall take into
account the prior deemed Realization or Realizations. Notwithstanding the foregoing, for purposes
of determining an IP Member’s Vested Percentage pursuant to Section B-2, such deemed
Realizations shall be disregarded.

B-4 Distributions to the IP Members

     Subject to the holdback provisions of Section 4.5 of the Agreement, each IP Member
shall be entitled to receive an amount of Carry Distributions equal to the positive balance in his
Carry Account, provided that the sum of all of the Carry Distributions made to date to the
IP Members as a group cannot exceed the product of (A) the total Carry Distributions made to date
times (B) the aggregate Carry Percentages for all of the IP Members (adjusted as necessary
to take into account changes in Carry Percentages since the formation of the Company). If the
amount of Carry Distributions to be made to the IP Members as a group is insufficient to reduce the
positive Carry Account balances of all IP Members to zero, then Carry Distributions made to the IP
Members as a group will be made pro rata among the IP Members based on their relative Carry Account
balances. If the amount of Carry Distributions to be made to the IP Members exceeds the aggregate
positive Capital Account balances of the IP Members, such excess shall be distributed among the IP
Members in the manner that the Managing Member determines most appropriately reflects the IP
Members’ relative Carry Percentages (as adjusted by the Vested Percentages) in the Program Assets
giving rise to the Carry Distributions.

B-5 Responsibility for Gross Clawback Amount

     Each IP Member shall be responsible (only to the extent of Section 4.6(c) of the
Agreement) for a portion of the Gross Clawback Amount equal to the negative balance, if any, in
such IP Member’s Carry Account as of the final liquidating distribution of assets of the Company
pursuant to Section 8.2 of the Agreement.

B-6 83(b) Election

     Each Carried Interest Member shall make a timely election under Section 83(b) of the Code with
respect to such Carried Interest Member’s interest in the Company.

B-5

 

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

PF PROGRAM PARTNERSHIP, LP

[ Previously Named: Woodbridge Equity Fund II LP ]

Date: March 13, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	ARTICLE I
GENERAL PROVISIONS
	 	 	1	 
	 	1.1	 	 	Formation

	 	 	1	 
	 	1.2	 	 	Name

	 	 	2	 
	 	1.3	 	 	Purpose

	 	 	2	 
	 	1.4	 	 	Principal Office

	 	 	2	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II DEFINITIONS; DETERMINATIONS	 	 	2	 
	 	2.1	 	 	Definitions

	 	 	2	 
	 	2.2	 	 	Determinations

	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III INVESTED CAPITAL; CAPITAL ACCOUNTS	 	 	6	 
	 	3.1	 	 	Invested Capital

	 	 	6	 
	 	3.2	 	 	Future Contributions

	 	 	7	 
	 	3.3	 	 	Capital Accounts

	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV DISTRIBUTIONS	 	 	7	 
	 	4.1	 	 	Distribution Policy

	 	 	7	 
	 	4.2	 	 	Reimbursement Payment

	 	 	8	 
	 	4.3	 	 	Priority of Distributions

	 	 	8	 
	 	4.4	 	 	Apportionment of Carry Distributions

	 	 	9	 
	 	4.5	 	 	IP Clawback Reserve

	 	 	10	 
	 	4.6	 	 	Clawback Obligations

	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V PROGRAM MANAGER	 	 	12	 
	 	5.1	 	 	Program Manager

	 	 	12	 
	 	5.2	 	 	Fees

	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI GENERAL PARTNER	 	 	12	 
	 	6.1	 	 	Management Authority

	 	 	12	 
	 	6.2	 	 	No Liability to Partnership or Limited Partners

	 	 	13	 
	 	6.3	 	 	Indemnification

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII LIMITED PARTNERS	 	 	14	 
	 	7.1	 	 	Limited Liability

	 	 	14	 
	 	7.2	 	 	No Participation in Management

	 	 	14	 
	 	7.3	 	 	Transfer of Limited Partnership Interests

	 	 	14	 
	 	7.4	 	 	No Termination

	 	 	15	 
	 	7.5	 	 	Additional Limited Partners

	 	 	15	 

     -i-     

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	 	7.6	 	 	Reimbursement for Payments on Behalf of a Partner

	 	 	15	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VIII DURATION AND TERMINATION	 	 	16	 
	 	8.1	 	 	Term

	 	 	16	 
	 	8.2	 	 	Termination and Liquidation

	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX VALUATION OF PARTNERSHIP ASSETS	 	 	17	 
	 	9.1	 	 	Normal Valuation

	 	 	17	 
	 	9.2	 	 	Restrictions on Transfer or Blockage

	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X BOOKS OF ACCOUNTS; MEETINGS	 	 	18	 
	 	10.1	 	 	Books

	 	 	18	 
	 	10.2	 	 	Fiscal Year

	 	 	18	 
	 	10.3	 	 	Reports

	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	18	 
	 	11.1	 	 	Amendments

	 	 	18	 
	 	11.2	 	 	Successors

	 	 	19	 
	 	11.3	 	 	Governing Law; Severability

	 	 	19	 
	 	11.4	 	 	Notices

	 	 	19	 
	 	11.5	 	 	Arbitration

	 	 	19	 
	 	11.6	 	 	Miscellaneous

	 	 	20	 
	 	11.7	 	 	No Third Party Beneficiaries

	 	 	20	 
	 	 	 	 	 
	 	 	 	 
	APPENDIX A: TAX AND ACCOUNTING PROVISIONS	 	 	A-1	 
	 	A-1	 	 	Definitions

	 	 	A-1	 
	 	A-2	 	 	Maintenance of Capital Accounts

	 	 	A-2	 
	 	A-3	 	 	Allocations of Profits and Losses

	 	 	A-4	 
	 	A-4	 	 	Regulatory Allocations and Special Allocations

	 	 	A-4	 
	 	A-5	 	 	Tax Allocations

	 	 	A-5	 
	 	A-6	 	 	Tax
Matters Partner; Management Authority Regarding Tax and Accounting

	 	A-6

	 	 	 	 	 
	 	 	 	 
	APPENDIX B: APPORTIONMENT AND MODIFICATION OF CARRIED INTEREST TO IP LIMITED PARTNERS	 	 	B-1	 
	 	B-1	 	 	Definitions

	 	 	B-1	 
	 	B-2	 	 	Vesting Provisions

	 	 	B-3	 
	 	B-3	 	 	Determination of Carry Accounts

	 	 	B-4	 
	 	B-4	 	 	Distributions to the IP Limited Partners

	 	 	B-5	 
	 	B-5	 	 	Responsibility for Gross Clawback Amount

	 	 	B-5	 
	 	B-6	 	 	83(b) Election

	 	 	B-5	 

     -iii-     

 

 

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

PF PROGRAM PARTNERSHIP, LP

     THIS AGREEMENT OF LIMITED PARTNERSHIP is deemed to be effective as of March 13, 2009 (the
“Effective Date”), by and among the General Partner, the Sponsor Partner, the IP Limited
Partners, the Program Manager and the Residual Limited Partner (each as defined below).

     WHEREAS, the Partnership (as defined below) was formed pursuant to (a) the Certificate (as
defined below) and (b) an Agreement of Limited Partnership (the “Initial Agreement”),
between the General Partner, as general partner, and Woodbridge Holdings Corporation, a Florida
corporation, as the sole limited partner (the “Initial Limited Partner”);

     WHEREAS, in furtherance of this Agreement, the Initial Limited Partner has transferred its
interest in the Partnership to the Program Manager and the Program Manager has transferred such
interest to the General Partner which hereafter shall be considered the General Partner’s interest;

     WHEREAS, the parties to this Agreement wish to amend and restate the Initial Agreement in its
entirety as hereinafter set forth, and to admit the IP Limited Partners, the Sponsor Partner and
the Residual Limited Partner as partners to the Partnership.

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

GENERAL PROVISIONS

1.1 Formation

     The Partners hereby agree to continue a limited partnership (the “Partnership”)
pursuant to and in accordance with the Delaware Revised Uniform Limited Partnership Act, as amended
from time to time (the “Partnership Act”). The term of the Partnership (the
“Term”) commenced upon the filing of the Certificate of Limited Partnership (the
“Certificate”) with the Secretary of State of Delaware (the date of such filing is referred
to herein as the date of “formation” of the
Partnership) and shall continue until dissolution and termination of the Partnership in
accordance with the provisions of ARTICLE VIII hereof.

 

 

1.2 Name

     As of the date hereof, the Partners hereby agree that the name of the Partnership shall be PF
Program Partnership, LP, and the General Partner shall file a certificate of amendment effecting
such name change. The General Partner shall be entitled to further change the name as the General
Partner may designate from time to time.

1.3 Purpose

     The Partnership is organized for the principal purpose of (i) acquiring, managing, and
supervising the interests in the Program Assets, and (ii) engaging in such other activities
incidental or ancillary thereto as the General Partner deems necessary or advisable.

1.4 Principal Office

     The General Partner shall maintain a principal office in Fort Lauderdale, Florida, or at such
other place or places as the General Partner may from time to time designate.

ARTICLE II

DEFINITIONS; DETERMINATIONS

2.1 Definitions

     Capitalized terms used in this Agreement have the meanings set forth below or as otherwise
specified herein:

     “Agreement” means this Amended and Restated Agreement of Limited Partnership of PF
Program Partnership, LP, as amended or modified from time to time in accordance with its terms.

     “Alternative Clawback Reserve” has the meaning set forth in Section 4.5.

     “Capital Account” is the account established for each Partner in accordance with the
provisions of Appendix A hereto.

     “Capital Proceeds” means any Investment Proceeds received by the Partnership in
respect of a Program Asset that are attributable to a Realization event.

     “Carried Interest Partners” means the Sponsor Partner, the IP Limited Partners, and
the Residual Limited Partner, in their capacities as Partners entitled to receive Carry
Distributions.

     “Carry Distributions” means those distributions paid to the Carried Interest Partners
in their capacities as such pursuant to Section 4.3(a)(ii) and Section
4.3(a)(iii)(B).

-2-

 

     “Carry Percentage” means, with respect to a Carried Interest Partner, its percentage
interest in Carry Distributions as set forth for such Partner on Schedule I hereof.

     “Certificate” has the meaning set forth in Section 1.1.

     “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

     “Contributed Property” means (i) 2,608,696 shares of Series B Convertible Preferred
Stock of Pizza Fusion Holdings, Inc.; (ii) warrants to purchase 1,500,000 shares of such stock; and
(iii) all additional rights to acquire warrants and shares as described in the Purchase Agreement
between Woodbridge Equity Fund II LP and Pizza Fusion Holdings, Inc., dated September 18, 2008.

     “Covered Party” means each of the Partners, a director, officer, partner or member (or
a former director, officer, partner or member) of any Partner, and to the extent approved by the
General Partner in its sole discretion, any other employee of a Partner or an agent acting at the
direction of the General Partner or the Program Manager, and in any such case, the heirs and legal
representatives of any such person.

     “Current Proceeds” means any Investment Proceeds received by the Partnership in
respect of a Program Asset that are not attributable to a Realization event, including dividends,
rents, or interest with respect to such Program Asset.

     “Deal Fees” means those amounts received by the General Partner (or an affiliate of
the General Partner) as break-up fees, director fees, “flip” fees, investment banking, consulting,
or similar transaction fees, but not including any amount received as reimbursement for expenses
directly related to the provision of such services for which the fee is being paid. “Deal Fees”
also means all amounts earned by any employee or agent (in such capacity) of the Program Manager
with respect to a Program Asset or other activities of the Partnership, but not including payments
to such employee or agent from the Program Manager.

     “Effective Date” has the meaning set forth in the Recitals.

     “Fair Market Value” of a security or a Program Asset means the amount that would be
realized as Investment Proceeds if such security or Program Asset had been sold at its “value”
(determined in accordance with Article IX).

     “Family Related Partner” means, with respect to any IP Limited Partner, any Person who
is a spouse or lineal descendent of the parents of such IP Limited Partner or any Person which is a
trust formed by such IP Limited Partner for investment by or for the benefit of such IP Limited
Partner’s spouse or any lineal descendants of the parents of such IP Limited Partner or of such IP
Limited Partner’s spouse and/or any charitable organization; provided that any cause of
action or other dispute arising in relation to a Family Related Partner’s interest may only be
pursued by the IP Limited Partner associated with such Family Related Partner, except if such IP
Limited Partner has died or become legally incapacitated.

     “GAAP” has the meaning set forth in Section 10.3.

-3-

 

     “General Partner” means PF Program GP, LLC, in its capacity as general partner of the
Partnership, and any successor general partner of the Partnership.

     “Gross Clawback Amount” has the meaning specified in Section 4.6.

     “Impairment” means, with respect to a Program Asset, a determination by the General
Partner that the Program Asset is not expected to be able to provide for cash flow or realization
proceeds a return to investors of at least the amount of Invested Capital associated with such
asset as well as a 10% per annum compounded annual return on such Invested Capital. The General
Partner’s determination that a Program Asset has suffered an Impairment for purposes of this
Agreement shall be independent of any determination that the value of the Program Asset is reduced
for purposes of the financial statements prepared under generally accepted accounting principles.

     “Initial Agreement” has the meaning set forth in the Recitals.

     “Initial Limited Partner” has the meaning set forth in the Recitals.

     “Invested Capital” has the meaning set forth in Section 3.1.

     “Investment Proceeds” means the gross investment returns (whether in the form of cash,
securities, or other property) received by the Partnership in respect of the Partnership’s Invested
Capital in any Program Assets (i.e., in its capacity as an investor and not with respect to the
provision of any services with respect to such Program Assets or to any other investor in such
Program Assets). For the avoidance of doubt, the amount of Investment Proceeds shall be determined
without regard to any management fees, carried interest, or similar deductions that may be charged
by the General Partner or the Program Manager to any investment vehicle through which the
Partnership holds any of its investments.

     “IP Clawback Reserve” has the meaning set forth in Section 4.5.

     “IP Limited Partners” means any Persons designated as IP Limited Partners on
Schedule I hereof, in their capacities as limited partners of the Partnership, or any other
Persons that are admitted as IP Limited Partners in accordance with the terms hereof, in each case
for so long as such Persons continue to be IP Limited Partners hereunder, and “IP Limited
Partner” shall mean each of such Persons individually.

     “Limited Partners” means the IP Limited Partners and the Residual Limited Partner, and
“Limited Partner” shall mean each of such Persons individually.

     “Overall
Hurdle Clawback” has the meaning set forth in the limited partnership agreement
governing Woodbridge Executive Incentive Plan 1, LP.

     “Partners” means collectively the General Partner (including in its capacity as
Sponsor Partner), the Limited Partners, the Program Manager and any other Person that is admitted
to the Partnership as a partner in accordance with the terms hereof, and “Partner” shall
mean each of such persons individually.

     “Partnership” has the meaning set forth in Section 1.1.

-4-

 

     “Partnership Act” has the meaning set forth in Section 1.1.

     “Person” means an individual, a partnership (general, limited, or limited liability),
a corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental, quasi-governmental, judicial, or
regulatory entity or any department, agency, or political subdivision thereof.

     “Platform” means all of the program partnerships (or other entities) that are designated as a
“Program Partnership” in accordance with the terms of the governing agreement of Woodbridge
Executive Incentive Plan 1, LP.

     “Portfolio Company” means Pizza Fusion Holdings, Inc. and such other entities, the
interests in which are Program Assets.

     “Preferred Return” has the meaning set forth in Section 4.3.

     “Program Assets” means those assets held by the Partnership as part of the
Partnership’s investment program, and “Program Asset” shall mean each of such Program
Assets individually.

     “Program Expenses” means those costs, expenses, liabilities and obligations relating
to the Partnership’s activities, investments and business (to the extent not borne or reimbursed by
the Portfolio Company) as set forth on Schedule II hereof.

     “Program Manager” means Woodbridge Fund I, LLC.

     “Program
Partnership” means each partnership (or other entity) that is designated as a
“Program Partnership” in accordance with the terms of the governing documents of Woodbridge
Executive Incentive Plan 1, LP. All such partnerships together with the Partnership are the
“Program Partnerships.”

     “Realization” means the sale, redemption, or other disposition of, or any other
receipt of a capital nature, including proceeds from the recapitalization or refinancing at the
investment level (as determined by the General Partner) with respect to the whole or part of, or
the permanent write-off of a Program Asset, and “Realized” shall be construed accordingly.
To the extent a Program Asset has suffered an Impairment of less than the whole of the Program
Asset, a portion of the Program Asset equal to the amount of the Impairment shall be treated as if
sold for no consideration. If the General Partner determines that an Impairment has been reversed,
the General Partner shall adjust the allocations and distributions made by the Partnership so as to
reverse the effects of the prior Impairment.

     “Realized Base Contributions” has the meaning set forth in Section 4.3(a)(i).

     “Regulatory Allocations” has the meaning set forth in Appendix A hereto.

     “Reimbursement Payment” means the special payment to the Program Manager pursuant to
Section 4.2.

     “Reimbursing Partner” has the meaning set forth in Section 7.6(a).

     “Residual Limited Partner” means the Person entitled to receive the amounts of Carry
Distributions not made to the Sponsor Partner or the IP Limited Partners, which Person will be
Woodbridge Executive Incentive Plan 1, LP.

     “Return Distributions” means those distributions to the General Partner other than
Carry Distributions as set forth in Section 4.3.

-5-

 

     “Sponsor Partner” means the Person entitled to receive the amounts of Carry
Distributions apportioned to the Sponsor Partner pursuant to the terms hereof, which Person
initially will be the General Partner, in its capacity as Sponsor Partner.

     “Sponsor Proceeds” means all other proceeds received by the Partnership from or with
respect to its assets other than Investment Proceeds. Sponsor Proceeds include management fees,
carried interest, and Deal Fees charged by the Partnership to other investors in an investment
vehicle through which the Partnership holds its assets; provided, however, that to the
extent the General Partner determines that Deal Fees arising with respect to a Partnership asset
are attributable to the capital invested in that asset by the Partnership, such fees will be
treated as Investment Proceeds, rather than Sponsor Proceeds. For the avoidance of doubt, Deal
Fees attributable to the capital invested by a third party or not attributable to any investment of
capital will be treated as Sponsor Proceeds.

     “Term” has the meaning set forth in Section 1.1.

     “Transfer” means a transfer in any form, including a sale, assignment, conveyance,
pledge, mortgage, encumbrance, hypothecation, exchange, gift, or other disposition, or the act of
so doing, whether voluntarily, by operation of law, pursuant to judicial process, or otherwise as
the context requires.

     “Woodbridge” means Woodbridge Holdings Corporation or any direct or indirect
subsidiary of such corporation.

2.2 Determinations

     Unless otherwise indicated, any determinations or calculations conducted pursuant to this
Agreement shall be determined or calculated as of the date of such determination or calculation.

ARTICLE III

INVESTED CAPITAL; CAPITAL ACCOUNTS

3.1 Invested Capital 

     As of the Effective Date, the Partners shall be required to make the following contributions
to the capital of the Partnership (“Invested Capital”):

     (a) The General Partner shall contribute the Contributed Property to the Partnership, which
for purposes hereof shall be treated as Invested Capital of $3,392,790, and such Contributed
Property will be treated as having a Book Value as defined in Appendix A hereto.

     (b) Each IP Limited Partner shall contribute $250 to the capital of the Partnership.

     (c) The Residual Limited Partner shall contribute $250 to the capital of the Partnership.

-6-

 

     (d) The Program Manager shall contribute $250 to the capital of the Partnership.

The right of each IP Limited Partner, the Residual Limited Partner, and the Sponsor Partner to
receive Carry Distributions represents a profits interest received for services rendered or to be
rendered to or for the benefit of the Partnership.

3.2 Future Contributions

     (a) Other than the required Invested Capital described in Section 3.1, any
reimbursement payment pursuant to Section 7.6, or as may be required by applicable law, no
Partner shall have any further obligation to contribute additional Invested Capital to the
Partnership; provided that the General Partner shall be required to make special
distributions to the Partnership to the extent that such special distributions are necessary to
reduce any IP Limited Partner’s Alternative Clawback Reserve as described in Section
4.2(c).

     (b) The General Partner, in its discretion, whether or not in connection with the admission of
any new Partner to the Partnership in accordance with Section 7.5, may permit a Partner to
contribute additional Invested Capital to the Partnership under such circumstances as may be
determined by the General Partner.

     (c) The General Partner may cause the Partnership to borrow funds, including from Woodbridge,
under such terms as the General Partner may determine, in order to permit the Partnership to meet
its liquidity needs.

3.3 Capital Accounts

     (a) A capital account shall be maintained for each Partner in accordance with the provisions
of Appendix A hereto.

ARTICLE IV

DISTRIBUTIONS

4.1 Distribution Policy

     (a) Except as set forth in Section 4.1(c) and Section 4.4, the General Partner
shall periodically cause excess cash or cash equivalents held in the Partnership to be distributed
to the Limited Partners in accordance with Section 4.3.

     (b) Distributions may be in the form of cash, property, or securities. Except as otherwise
provided herein, for purposes of this Agreement, an in-kind distribution of non-cash property shall
be treated as if an amount of cash equal to the Fair Market Value of such property had been
distributed.

-7-

 

     (c) In determining the amounts that may be available for distribution to the Partners, the
General Partner shall first cause the Partnership to satisfy its current obligations, including its
obligation to make any Reimbursement Payment to the Program Manager in accordance with
Section 4.2. In addition, the General Partner may cause the Partnership to retain such
amounts as the General Partner determines are appropriate to act as reserves for any fixed or
contingent payments or liabilities of the Partnership (including future amounts of Reimbursement
Payments) for which the Partnership may be liable.

4.2 Reimbursement Payment

     Prior to making any distributions to the Partners pursuant to Section 4.3, the
Partnership shall make a reimbursement payment (the “Reimbursement Payment”) to the Program
Manager equal to the amount of Program Expenses (including, for the avoidance of doubt, interest
accruing on the Program Manager’s line of credit used to finance such expenses) borne by, and
required to be paid by, the Program Manager that have yet to be reimbursed by the Partnership to
the Program Manager.

4.3 Priority of Distributions

     After making any Reimbursement Payment pursuant to Section 4.2, except to the extent
specifically provided in this Agreement to the contrary, distributions by the Partnership shall be
made among the Partners as follows:

     (a) Capital Proceeds and Sponsor Proceeds. Distributions designated as Capital Proceeds or
Sponsor Proceeds by the General Partner shall be distributed as follows:

	 	(i)	 	First, 100% to the General Partner as “Return
Distributions” until the General Partner has received aggregate
distributions sufficient to provide the General Partner a 10% per annum
cumulative annually compounded internal rate of return (the “Preferred
Return”) on the General Partner’s Invested Capital attributable to all
Program Assets (or portion thereof) that have been Realized (such Invested
Capital, the “Realized Base Contributions”), provided that for
purposes of determining the Preferred Return, the Invested Capital attributable
to the contribution of the Contributed Property shall be treated as having been
made on September 18, 2008. The General Partner will include as Return
Distributions any amounts received that relate to the investment in such
Program Assets, regardless of whether such amounts are received through, or
outside of, the Partnership. For the avoidance of doubt, an “internal rate of
return” calculation encompasses a return of, as well as a return on, the
Realized Base Contributions.
	 
	 	(ii)	 	Second, 20% to the General Partner (as additional
Return Distributions) and 80% to the Carried Interest Partners (and among them
as provided in Section 4.4) as “Carry Distributions,” until the
aggregate amount of Carry Distributions equals 20% of the excess of (A) the
aggregate amount of Return Distributions and Carry Distributions distributed
over (B) the Realized Base Contributions; and

-8-

 

	 	(iii)	 	Thereafter, between the General Partner and the
Carried Interest Partners as follows:

	 	(A)	 	The General Partner is allocated an additional
amount (as additional Return Distributions) so that the aggregate
amount of Return Distributions distributed to the General Partner
equals the sum of (1) the Realized Base Contributions plus (2)
80% of the amount by which the aggregate Investment Proceeds received
by the Partnership exceeds the Realized Base Contributions; and
	 
	 	(B)	 	The remainder to the Carried Interest Partners
as additional Carry Distributions.

     (b) Current Proceeds. Distributions designated as Current Proceeds by the General Partner
shall be distributed in the same manner as Capital Proceeds and Sponsor Proceeds pursuant to
Section 4.3(a) except that for purposes of applying those provisions with respect to a
particular distribution of Current Proceeds, the Program Asset giving rise to such Current Proceeds
will be deemed to have been Realized for an amount equal to the Invested Capital (and taking into
account any prior unreversed Impairment with respect to such Program Asset) attributable to such
Program Asset immediately prior to the distribution of such Current Proceeds.

4.4 Apportionment of Carry Distributions

     Carry Distributions will be made to and among the Carried Interest Partners in the following
amounts:

     (a) Distributions to the Sponsor Partner. The Sponsor Partner shall in all cases receive 35%
of all Carry Distributions.

     (b) Distributions to the IP Limited Partners. The IP Limited Partners as a group shall receive
a portion of Carry Distributions, which portion shall not exceed the aggregate Carry Percentages of
the IP Limited Partners, but which may be reduced by the vesting and other provisions in
Appendix B hereto. The provisions of Appendix B will govern the determination of
each IP Limited Partner’s share of such Carry Distributions.

     (c) Distributions to the Residual Limited Partner. Carry Distributions not made to the
Sponsor Partner or the IP Limited Partners shall be made to the Residual Limited Partner. For the
avoidance of doubt, any reductions in Carry Distributions to the IP Limited Partners pursuant to
the vesting provisions set forth in Appendix B hereto shall accrue to the benefit of the
Residual Partner.

-9-

 

4.5 IP Clawback Reserve

     (a) Notwithstanding the provisions of Section 4.3 and Section 4.4 and Appendix B hereto, 25%
(adjusted as provided in Section 4.5(b) below) of any Carry Distributions that are available for
distribution to an IP Limited Partner shall be withheld by the Partnership, and a separate
bookkeeping account (an “IP Clawback Reserve”) shall be established for such IP Limited Partner by
the Partnership for tracking deposits, withdrawals, and interest earned with respect to such
account. The Partnership may aggregate each of the IP Clawback Reserves within a single
interest-bearing Partnership bank account.

     (b) Each time that the Partnership is to make a distribution of Carry Distributions,
the General Partner (together with the general partners of each of the other Program Partnerships)
will review the remaining Program Assets and the assets within each other Program Partnership in
the Platform to determine whether any of the cumulative assets have suffered an Impairment that has
not been reversed, and if so, the effect that such Impairment would have on the ability of
Woodbridge (in its capacity as an investor in such program partnership) to receive proceeds from
such Program Partnership sufficient to provide Woodbridge with at least a 10% annual cumulative
compounded internal rate of return on its Invested Capital (as defined by the governing agreement
of such Program Partnership) in such Program Partnership. If the General Partner determines that
the Impairment would prevent such minimum return from being achieved, the General Partner may
increase the percentage (but not in excess of 100%) of Carry Distributions to be contributed to the
IP Clawback Reserve of any Executive IP Partner (as defined below) in order to add to such IP
Clawback Reserve an amount which, when combined with the other reserves being established by the
other Program Partnerships and by Woodbridge Executive Incentive Plan 1, LP with respect to such
Executive IP Partner, will cover such Executive IP Partner’s share of the Overall Hurdle
Clawback that is anticipated to arise.

	 	(i)	 	“Executive IP Partner” shall mean any person who is both an IP Limited
Partner and a limited partner of Woodbridge Executive Incentive Plan 1, LP.
	 
	 	(ii)	 	For the avoidance of doubt, the General Partner shall not increase the
percentage of Carry Distributions to be contributed to the IP Clawback Reserve
of any IP Limited Partner who is not an Executive IP Partner.

     (c) Notwithstanding the foregoing, in the General Partner’s discretion, rather than
depositing amounts in the IP Clawback Reserve for an IP Limited Partner, the General Partner may
cause such amounts to be distributed to the General Partner as additional Return Distributions,
which will be credited to a special bookkeeping account (an “Alternative Clawback Reserve”) for the
benefit of such IP Limited Partner. The balance in the Alternative Clawback Reserve shall be
increased from time to time by an interest factor equal to the interest earned on the IP Clawback
Reserve (or, if there is no IP Clawback Reserve, on the rate of interest that the Partnership would
receive on an interest-bearing bank account).

     (d) As set forth in Section 4.6, at the expiration of the Term of the
Partnership, each IP Limited Partner will be responsible for a share of the Gross Clawback Amount,
if any.

	 	(i)	 	     To satisfy an IP Limited Partner’s share, amounts will first
be taken from such IP Limited Partner’s Alternative Clawback Reserve. To the
extent that such IP Limited Partner’s share is not satisfied, amounts will be
taken from such IP Limited Partner’s IP Clawback Reserve.
	 
	 	(ii)	 	     (A) To the extent amounts in the Alternative Clawback
Reserve are not needed to satisfy the share of an IP Limited Partner who is
not an Executive IP Partner of the Gross Clawback Amount, an amount of Return
Distributions that would otherwise be payable to the General Partner or Carry
Distributions otherwise payable to the Sponsor Partner equal to such excess,
shall instead be specially distributed to the applicable IP Limited Partner
without regard to Section 4.3, which distributions will reduce on a
dollar-for-dollar basis the amount in such IP Limited Partner’s Alternative
Clawback Reserve. If the full amount of such excess cannot be so distributed,
the shortfall shall be contributed by the General Partner to the Partnership
for special distribution to the applicable IP Limited Partner.
	 
	 	(iii)	 	     (B) To the extent amounts in the Alternative Clawback Reserve are not
needed to satisfy the share of an Executive IP Partner of the Gross Clawback
Amount, such excess amounts will be added to the Alternative Clawback Reserve
established for the benefit of such Executive IP Partner by Woodbridge
Executive Incentive Plan 1, LP.
	 
	 	(iv)	 	     (A) For any IP Limited Partner who is not an Executive IP Partner, to
the extent amounts in such IP Limited Partner’s IP Clawback Reserve (including
interest earned thereon) are not needed to fund such IP Limited Partner’s
share of the Gross Clawback Amount, such amounts will be released by the
Partnership to the applicable IP Limited Partner.
	 
	 	 	 	     (B) For any Executive IP Partner, to the extent amounts in such Executive
IP Partner’s IP Clawback Reserve (including interest earned thereon) are
not needed to fund such Executive IP Partner’s share of the Gross Clawback
Amount, such amounts will be added to the Clawback Reserve established for
the benefit of such Executive IP Partner by Woodbridge Executive Incentive
Plan 1, LP.

     (e) Prior to the expiration of the Term of the Partnership, the General Partner, in
its discretion, may release reserved amounts to an IP Limited Partner who is not an Executive IP
Partner by (i) causing special distributions reducing such IP Limited Partner’s Alternative
Clawback Reserve or causing contributions and special distributions, each as described in Section
4.5(d) above, or (ii) distributing amounts to an IP Limited Partner from such IP Limited Partner’s
IP Clawback Reserve, in either case to the extent the General Partner determines that such released
amounts are not necessary to secure such IP Limited Partner’s share of the Gross Clawback Amount,
each as described in Section 4.6. Similarly the General Partner may, in its discretion, move
amounts to the Alternative Clawback Reserve or the Clawback Reserve of an Executive IP
Partner established for the benefit of such Executive IP Partner by Woodbridge
Executive Incentive Plan 1, LP.

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4.6 Clawback Obligations

     (a) Following the final liquidating distribution of assets pursuant to Section 8.2, if
there have been any Carry Distributions, the General Partner shall determine the additional amount
of Return Distributions (the “Gross Clawback Amount”), if any, that would need to have been
distributed to the General Partner in connection with such final liquidating distribution so that
each of the following would have been true:

	 	(i)	 	The General Partner would have received sufficient Return
Distributions to provide it with at least the Preferred Return on the General
Partner’s Invested Capital, as calculated pursuant to Section
4.3(a)(i); and
	 
	 	(ii)	 	The General Partner would have received Return Distributions at
least equal to the amount of its Invested Capital plus 80% of the amount by
which the aggregate Investment Proceeds received by the Partnership exceeded
the General Partner’s Invested Capital.

     (b) Each Carried Interest Partner shall be responsible for returning to the Partnership, for
distribution to the General Partner, its share of the Gross Clawback Amount, determined as follows:

	 	(i)	 	The Sponsor Partner shall be responsible for its Carry
Percentage (i.e., 35%);
	 
	 	(ii)	 	The IP Limited Partners as a group shall be responsible for
their aggregate Carry Percentage of the Gross Clawback Amount, with each such
IP Limited Partner being severally (and not jointly) responsible for the amount
determined pursuant to Appendix B hereto and only to the extent of
clause (c) below; and
	 
	 	(iii)	 	The Residual Limited Partner shall be responsible for its
Carry Percentage of the Gross Clawback Amount;

provided that if Carry Percentages have changed over the Term of the Partnership, the
determination shall be based on the relative amounts of Carry Distributions received over the Term
of the Partnership or any other method determined by the General Partner to appropriately take into
account such variations.

     (c) In no event will an IP Limited Partner be personally liable for a clawback obligation that
exceeds the aggregate amount of such IP Limited Partner’s Alternative Clawback Reserve and IP
Clawback Reserve. In no event shall an IP Limited Partner be responsible for another Partner’s
share of the Gross Clawback Amount.

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     (d) The Residual Limited Partner’s obligation to satisfy its clawback obligation will be
limited to those amounts established as a clawback reserve under the terms of the limited
partnership agreement governing the Residual Limited Partner and will be a several (and not joint)
obligation of the partners in the Residual Limited Partner.

ARTICLE V

PROGRAM MANAGER

5.1 Program Manager

     The Program Manager will be responsible for managing the day-to-day activities of the
Partnership and the Partnership’s assets, subject to the direction of the General Partner;
provided that the Program Manager will have no authority to legally bind the Partnership
without the express consent of the General Partner.

5.2 Fees

     The Program Manager shall not be entitled to any fees, payments, or distributions other than
as expressly provided herein, or as otherwise approved by the General Partner. To the extent the
Program Manager or any employee or agent (in such capacity) of the Program Manager receives any
Deal Fees with respect to a Program Asset, the calculations called for in this Agreement will be
adjusted so that total amounts received by the Program Manager or such employee or agent (in such
capacity) of the Program Manager are the same as if all such Deal Fees had been paid to the
Partnership.

ARTICLE VI

GENERAL PARTNER

6.1 Management Authority

     (a) The management of the Partnership shall be vested exclusively in the General Partner, and
the General Partner shall have full control over the business and affairs of the Partnership. The
General Partner shall have the power on behalf and in the name of the Partnership to carry out any
and all of the objectives and purposes of the Partnership and to perform all acts and enter into
and perform all contracts and other undertakings which the General Partner, in its reasonable
discretion, deems necessary or advisable or incidental thereto, including the power to acquire and
dispose of any security (including marketable securities) or incur indebtedness or guarantee the
indebtedness of the Portfolio Company.

     (b) Third parties dealing with the Partnership can rely conclusively upon the General
Partner’s certification that it is acting on behalf of the Partnership and that its acts are
authorized. The General Partner’s execution of any agreement on behalf of the Partnership is
sufficient to bind the Partnership for all purposes.

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     (c) The General Partner will have the right and power to establish the availability and terms
of any offering of opportunities for an IP Limited Partner or any Family Related Partner or any
other “friend or family member” of an IP Limited Partner to co-invest alongside the Partnership in
all or part of the Partnership’s investments.

6.2 No Liability to Partnership or Limited Partners

     No Covered Party shall be liable to the Partnership or any Partner for any action taken, or
failure to act, on behalf of the Partnership (or on behalf of the General Partner or the Program
Manager with respect to the Partnership) if such Covered Party (a) acted honestly and in good faith
with a view to the best interests of the Partnership, or, as the case may be, to the best interests
of the other entity for which the Covered Party acted as director, officer, employee, agent, or in
a similar capacity at the request of the General Partner or the Program Manager for the benefit of
the Partnership; and (b) in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, the Covered Party had reasonable grounds for believing that the
Covered Party’s conduct was lawful. In addition, any Covered Party who has delegated to any other
Person (other than to another Covered Party) any part of its functions (including participating in
the management of or rendering professional advice or other services in respect of any Program
Asset) shall not be liable, responsible, or accountable in damages or otherwise to the Partnership
or to any Partner for any loss incurred or suffered by reason of any action by such other Person
unless the delegating Covered Party did not (x) act honestly and in good faith with a view to the
best interests of the Partnership, or, as the case may be, to the best interests of the other
entity for which the Covered Party acted as director, officer, employee, agent, or in a similar
capacity at the request of the General Partner or the Program Manager for the benefit of the
Partnership; and (y) in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, have reasonable grounds for believing that the Covered Party’s
conduct was lawful with respect to such delegation. For the avoidance of doubt, nothing in the
immediately preceding sentence shall be deemed to prevent the Partnership, the General Partner or
the Program Manager from asserting a cause of action against the delegate of a Covered Party for
any loss caused by the action, or failure to act, of such delegate and the General Partner shall
cause the Partnership to effectively pursue any such cause of action to the extent it would be in
the reasonable best interests of the Partnership to do so.

6.3 Indemnification

     (a) Subject to Section 6.3(c), the Partnership shall indemnify each Covered Party
against all costs, charges, and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by the Covered Party in respect of any civil, criminal,
administrative, investigative, or other proceeding in which the Covered Party is involved because
of such Covered Party’s association with the Partnership, the General Partner, or the Program
Manager if such Covered Party (i) acted honestly and in good faith with a view to the best
interests of the Partnership or, as the case may be, to the best interests of the other entity for
which the Covered Party acted as director, officer, employee, agent, or in a similar capacity at
the request of the General Partner or the Program Manager and for the benefit of the Partnership;
and (ii) had reasonable grounds for believing that such Covered Party’s conduct was lawful, in
the case of a criminal or administrative action or proceeding that is enforced by a monetary
penalty.

-13-

 

     (b) Subject to Section 6.3(c), the Partnership shall advance moneys to a Covered Party
for the costs, charges, and expenses of a proceeding referred to in Section 6.3(a). The
Covered Party shall repay the moneys if the Covered Party does not fulfill the conditions of
Section 6.3(a).

     (c) Before seeking indemnification from the Partnership, a Covered Party seeking such
indemnification shall use all reasonable efforts to seek indemnification from the following sources
(in the following order of priority): first, from the Portfolio Company, including any insurance
provided by, or purchased on behalf of a Covered Party by, the Portfolio Company; and second, from
the General Partner or the Program Manager, including from any insurance provided by the General
Partner or the Program Manager. To the extent any unpaid indemnification obligation remains after
the Covered Party has received indemnification from the foregoing sources, the Partnership shall
indemnify such Covered Party for such shortfall.

ARTICLE VII

LIMITED PARTNERS

7.1 Limited Liability

     No Limited Partner shall be personally liable for any obligations of the Partnership or have
any obligation to make contributions to the Partnership other than such Limited Partner’s initial
contribution pursuant to Section 3.1 or as required pursuant to Section 4.6 or
Section 7.6; provided that a Limited Partner shall be required to return any
distribution made to it in error. To the extent any Limited Partner is required by the Partnership
Act to return to the Partnership any distributions made to it and does so, such Limited Partner
shall have a right of contribution from each other Limited Partner similarly liable to return
distributions made to it to the extent that such Limited Partner has returned a greater percentage
of the total distributions made to it and required to be returned by it than the percentage of the
total distributions made to such other Limited Partner and so required to be returned by it.

7.2 No Participation in Management

     The Limited Partners (in their capacity as such) shall not participate in the control,
management, direction, or operation of the affairs of the Partnership and shall have no power to
bind the Partnership.

7.3 Transfer of Limited Partnership Interests

     (a) A Limited Partner may not Transfer all or a portion of its interest in the Partnership
without the consent of the General Partner; provided that the General Partner shall not
unreasonably withhold its consent to a Transfer by an IP Limited Partner to a Family Related
Partner of such IP Limited Partner.

-14-

 

     (b) Unless and until the General Partner consents to the admission of a transferee as a
substituted Limited Partner in accordance with this Section 7.3, the transferor shall
remain liable for all liabilities and obligations relating to the transferred beneficial interest,
if any, and the transferee shall become an assignee of only a beneficial interest in Partnership
profits, losses and distributions of such interest. No consent of any other Limited Partner shall
be required as a condition precedent to any Transfer.

     (c) Unless the General Partner otherwise determines in its sole discretion, the transferor and
transferee of any Limited Partner’s interest shall be jointly and severally obligated to reimburse
the General Partner and the Partnership for all reasonable expenses (including attorneys’ fees and
expenses) of any Transfer or proposed Transfer of a Limited Partner’s interest, whether or not
consummated.

     (d) Any substituted Limited Partner admitted to the Partnership with the consent of the
General Partner shall succeed to all the rights and be subject to all the obligations of the
transferring or assigning Limited Partner with respect to the interest to which such Limited
Partner was substituted. The General Partner may modify Schedule I hereof to reflect such
admittance of any substituted Limited Partner. Such substituted Limited Partner shall be treated
as having received all of the allocations and distributions received by the transferring or
assigning Limited Partner, if any.

     (e) Any Transfer that violates this Section 7.3 shall be void and the purported buyer,
assignee, transferee, pledgee, mortgagee, or other recipient shall have no interest in or rights to
Partnership assets, profits, losses, or distributions, and neither the General Partner nor the
Partnership shall be required to recognize any such purported interest or rights.

7.4 No Termination

     Neither the substitution, death, incompetency, dissolution (whether voluntary or involuntary),
nor bankruptcy of a Limited Partner shall affect the existence of the Partnership, and the
Partnership shall continue for the Term of the Partnership until its existence is terminated as
provided herein.

7.5 Additional Limited Partners

     Additional Limited Partners will be admitted only with the consent of the General Partner on
such terms as agreed upon by the General Partner and the Person seeking admission to the
Partnership.

7.6 Reimbursement for Payments on Behalf of a Partner

     (a) If the Partnership is obligated to pay any amount to a governmental agency or body or to
any other Person (or otherwise make a payment) because of a Partner’s status or otherwise
specifically attributable to a Partner (including, without limitation, federal withholding taxes
with respect to foreign Partners, state withholding taxes, state personal property taxes, state
unincorporated business taxes, etc.) then such Partner (the “Reimbursing Partner”) shall
reimburse the Partnership in full for the entire amount paid (including, without limitation, any
interest, penalties, and expenses associated with such payment). At the election of the
General Partner, the amount to be reimbursed may be charged against the Capital Account of the
Reimbursing Partner, and the Partnership shall reduce subsequent distributions which would
otherwise be made to the Reimbursing Partner until the Partnership has recovered the amount to be
reimbursed; provided that the amount of such reduction shall be deemed to have been
distributed for all purposes of this Agreement, but such deemed distribution shall not further
reduce the Reimbursing Partner’s Capital Account.

-15-

 

     (b) A Partner’s obligation to reimburse the Partnership under this Section 7.6 shall
survive the termination, dissolution, liquidation, and winding-up of the Partnership, and for
purposes of this Section 7.6, the Partnership shall be treated as continuing in existence.

ARTICLE VIII

DURATION AND TERMINATION

8.1 Term

     The Partnership shall continue until the occurrence of any of the following events: (i) the
entry of a decree of judicial dissolution under the Act or (ii) an election by the General Partner
to dissolve the Partnership.

8.2 Termination and Liquidation

     (a) The Partnership shall not terminate immediately upon the expiration of its Term under
Section 8.1, but shall cease to engage in further business except to the extent necessary
to promptly wind-up its affairs, perform existing contracts, and preserve the value of the Program
Assets.

     (b) During the course of winding-up the Partnership all of the provisions of this Agreement
shall continue to bind the parties and apply to the activities of the Partnership except as
specifically provided to the contrary, but there shall be no distributions to the Partners except
as provided in this Section 8.2.

     (c) Upon the expiration of the Partnership’s Term, the General Partner shall take such actions
as it may think fit for winding-up the Partnership and liquidating the Program Assets, including:

	 	(i)	 	The filing of all certificates and notices of dissolution as
are required by applicable law; and
	 
	 	(ii)	 	The Realization of any Program Asset (unless the General
Partner intends to distribute such Program Asset in kind); provided
that all such Realizations shall be conducted in an orderly and businesslike
manner so as not to involve undue sacrifice.

-16-

 

The General Partner in taking such actions may exercise and shall have the benefit of all rights,
powers, and discretions vested in the General Partner pursuant to the provisions of this Agreement.
If the General Partner is not able to act as the liquidator of the Partnership or exercise the
powers inherent thereto, a liquidator shall be appointed by the Residual Limited Partner.

     (d) Upon dissolution of the Partnership, all Partnership assets shall be distributed or used
as follows and in the following order of priority:

	 	(i)	 	For the payment of the debts and liabilities of the
Partnership, including, without limitation, the expenses of liquidation.
	 
	 	(ii)	 	For the setting up of any reserves which the General Partner
may deem reasonably necessary for any liabilities or obligations of the
Partnership.
	 
	 	(iii)	 	To the Partners in accordance with the provisions of
Article IV.

     (e) The Partnership shall be terminated only after the Partnership assets have been
distributed as provided in this Section 8.2.

ARTICLE IX

VALUATION OF PARTNERSHIP ASSETS

9.1 Normal Valuation

     For purposes of this Agreement, the value of any asset as of any date (or in the event such
date is a holiday or other day which is not a business day, as of the immediately preceding
business day) shall be valued by the General Partner in good faith using methods it considers
appropriate.

9.2 Restrictions on Transfer or Blockage

     Any security which is held under a representation that it has been acquired for investment
purposes and not with a view to public sale or distribution, or which is held subject to any other
restriction on transfer, or where the size of the Partnership’s holdings compared to the trading
volume would adversely affect the marketability of such security, shall be valued at such discount
as the Program Manager deems reasonably necessary to reflect the marketability and value of such
security.

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ARTICLE X

BOOKS OF ACCOUNTS; MEETINGS

10.1 Books

     The Partnership shall maintain complete and accurate books of accounts of the Partnership’s
affairs at the Partnership’s principal office.

10.2 Fiscal Year

     The fiscal year and taxable year of the Partnership shall be the calendar year, unless
otherwise determined by the General Partner.

10.3 Reports

     The General Partner shall furnish to each Partner the following information and reports
prepared in accordance with U.S. generally accepted accounting principles (“GAAP”):

     (a) As soon as practicable after the end of each fiscal year commencing with the first year in
which the Partnership is in operation for a full fiscal year, (i) financial statements for the
Partnership for such year (audited by a firm of independent certified public accountants of
recognized national standing selected by the General Partner), and (ii) a statement of each
Partner’s closing Capital Account balance as of the end of such year; and

     (b) As soon as practicable after the end of each fiscal year, the Partnership’s United States
federal income tax return, including such Partner’s Schedule K-1 for such fiscal year.

ARTICLE XI

MISCELLANEOUS

11.1 Amendments

     This Agreement may be amended by the written consent of the General Partner, provided
that if such amendment would adversely affect any Carried Interest Partner, then the Carried
Interest Partner so affected must consent to such amendment. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended by the General Partner without the consent
of any other Partner in order to cure any ambiguity or error, make an inconsequential revision,
provide clarity, comply with any law or regulation or correct or supplement any provision herein
which may be defective or inconsistent with any other provisions herein; provided that,
except with respect to amendments necessary to comply with any law or regulation, such amendment
does not materially and adversely affect any Limited Partner.

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11.2 Successors

     Except as otherwise provided herein, this Agreement shall inure to the benefit of and be
binding upon the Partners and their legal representatives, heirs, successors, and assigns.

11.3 Governing Law; Severability

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware, and, to the maximum extent possible, in such manner as to comply with all the terms and
conditions of the Partnership Act. If it is determined by a court of competent jurisdiction that
any provision of this Agreement is invalid under applicable law, such provision shall be
ineffective only in such jurisdiction and only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.

11.4 Notices

     All notices, demands, and other communications to be given and delivered under or by reason of
provisions under this Agreement shall be in writing and shall be deemed to have been given on the
date when personally delivered, when mailed by first class mail, when sent by facsimile or
transmitted by email or the internet, or when sent by reputable overnight courier service, in each
case to the recipient at the address, facsimile number or email address set forth in Schedule
I hereof or to such other address, facsimile number, or email address, or to the attention of
such other Person as has been indicated in writing to the General Partner.

11.5 Arbitration

     The parties to this Agreement shall each use good faith efforts for a period of 30 days (or
such longer time as agreed to by the applicable parties) to try to resolve any controversy,
dispute, or claim arising out of or in connection with this Agreement, or the breach, termination
or validity hereof. Thereafter, if such controversy, dispute, or claim remains, it shall be
settled by final and binding arbitration to be conducted by an arbitration tribunal in Fort
Lauderdale, Florida, pursuant to the rules of the American Arbitration Association. The
arbitration tribunal shall consist of three arbitrators. The party initiating the controversy,
dispute, or claim that led to arbitration shall nominate one arbitrator in the request for
arbitration and the other party shall nominate a second arbitrator in the answer thereto within 30
days of receipt of the request; provided that if there are multiple initiating or answering
parties, the arbitrator selected must be reasonably acceptable to all initiating or answering
parties, as applicable. The two arbitrators so named will then jointly appoint the third
arbitrator. If the answering party fails to nominate its arbitrator within the 30-day period, or
if the arbitrators named by the parties fail to agree on the third arbitrator within 60 days, the
office of the American Arbitration Association in New York, New York shall make the necessary
appointments of such arbitrator(s). The decision or award of the arbitration tribunal (by a
majority determination, or if there is no majority, then by the determination of the third
arbitrator, if any) shall be final, and judgment upon such decision or award may be entered in any
competent court or application may be made to any competent court for judicial acceptance of such
decision or award and an order of enforcement. In the event
of any procedural matter not covered by the aforesaid rules, the procedural law of the State
of Delaware shall govern.

-19-

 

11.6 Miscellaneous

     This Agreement (including the Appendices hereto) contains the entire agreement among the
parties and supersedes all prior arrangements or understanding with respect thereto. Descriptive
headings are for convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement. This Agreement may be executed in any number of counterparts, any
one of which need not contain the signatures of more than one party, but all of such counterparts
together shall constitute one agreement. Whenever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and the plural, and
pronouns stated in either the masculine, the feminine or the neuter gender shall include the
masculine, the feminine, and the neuter.

11.7 No Third Party Beneficiaries

     No Person that is not a party hereto shall have any rights or obligations pursuant to this
Agreement. The rights and obligations set forth herein are for the benefit of the parties hereto
only and do not create or grant any rights to third parties.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	GENERAL PARTNER:

SPONSOR PARTNER:

PF PROGRAM GP, LLC

 	 
	 	By:  	WOODBRIDGE FUND I, LLC,
its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                WOODBRIDGE HOLDINGS CORPORATION,

its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	RESIDUAL LIMITED PARTNER:

WOODBRIDGE EXECUTIVE INCENTIVE PLAN 1, LP

 	 
	 	By:  	WOODBRIDGE FUND I, LLC,
its General Partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                WOODBRIDGE HOLDINGS CORPORATION, its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 

 -21 

 

	 	 	 	 	 

	 	 	 	 	 
	 	IP LIMITED PARTNERS:

 	 
	 	/s/ Alan B. Levan
 	 
	 	Alan B. Levan 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ John E. Abdo
 	 
	 	John E. Abdo 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ Seth M. Wise
 	 
	 	Seth M. Wise 	 
	 	 	 

 -22- 

 

	 	 	 	 	 

	 	 	 	 	 
	 	PROGRAM MANAGER:

WOODBRIDGE FUND I, LLC

 	 
	 	By:  	WOODBRIDGE HOLDINGS CORPORATION,

its sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	INITIAL LIMITED PARTNER:

WOODBRIDGE HOLDINGS CORPORATION

 	 
	 	By:  	/s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 

 -23- 

 

Schedule I

PF Program Partnership, LP

List of Carried Interest Partners and Applicable Carry Percentages

	 	 	 	 	 
	Carried
Interest Partner	 	Carry Percentage	 
	 
	 	 	 	 
	Sponsor Partner
	 	 	35.0	%
	 
	 	 	 	 
	IP Limited Partners (divided as listed below)
	 	 	32.5	%
	 
	 	 	 	 
	Alan Levan
	 	 	38.25%	 
	 
	 	 	 	 
	Jack Abdo
	 	 	38.25%	 
	 
	 	 	 	 
	Seth Wise
	 	 	23.50%	 
	 
	 	 	 	 
	Residual Limited Partner
	 	 	32.5	%
	 
	 	 	 	 
	 
	TOTAL
	 	 	100.0	%

 

 

Schedule II

Program Expenses

	 	 	 	 	 	 
	 
	 	Amounts Included in Program Expenses	 	 	Amounts Excluded from Program Expenses	 
	 	Salaries and bonuses

Salary for any investment professionals
of the Program Manager, except in the
case where Woodbridge Holdings executives
are the investment professionals.

Salaries and cash bonus of direct
dedicated staff members.

	 	 	Salaries and bonuses

Woodbridge Holdings incentive stock
options or stock grants to any investment
professional or dedicated staff member as
part of a Woodbridge Holdings-wide
incentive compensation program.	 
	 	Direct Expenses

Direct dedicated expenses incurred
directly by the Program Manager,
including rent, facilities charges,
equipment and supplies, except in the
case where Woodbridge Holdings executives
are the investment professionals.

Outside legal and accounting expenses
incurred for services rendered with
respect to the Program Manager or the Partnership, including formation
costs, and tax return preparation.

Unreimbursed costs of transactions, including due diligence
expenses and the carrying costs of
deposits, to the extent the transaction that generated the cost does
not close.

Travel expenses neither capitalized as
part of the acquisition of a completed
transaction nor borne by the target
company.

Standard charges by internal Woodbridge
Holdings personnel for provision of
back-office support services directly
related to the program or Program Assets
(i.e., providing the accounting services
for the Partnership, providing
human resources services for the
Partnership).

	 	 	Direct Expenses

Time of Investment Committee in
evaluating investment recommendations.	 
	 

 

 

	 	 	 	 	 	 
	 
	 	Amounts Included in Program Expenses	 	 	Amounts Excluded from Program Expenses	 
	 	Standard charges by BFC Shared Services
for back-office support services directly
related to the program or Program Assets.
Interest on borrowings of the Program
Manager, including any that accrued at
the rate of 12% compounded per annum on
amounts received through a pre-approved
line of credit from Woodbridge
Overhead Funding, LLC. For purposes of
this provision, all amounts of funds
provided to the Program Manager shall be
treated as borrowings and shall accrue
12% interest regardless of whether such
funds were provided in the form of loans,
equity capital, or otherwise.
	 	 	 	 
	 	Allocation of Woodbridge Holdings
Overhead

None.

	 	 	Allocation of Woodbridge
Holdings Overhead

General corporate overhead (i.e., public
company costs, office expenses for
non-dedicated staff, investor relations
and accounting staff not dedicated,
analytical staff providing analytics to
Woodbridge Holdings, management for
oversight of programs and Program
Assets).

Any other overhead expenses not expressly
included on this Schedule II as Program
Expenses.	 
	 

 

 

APPENDIX A: 

Tax and Accounting Provisions

A-1 Definitions

     For purposes of this Appendix A, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit
balance, if any, in such Partner’s Capital Account, as of a specified time, after giving effect to
the following adjustments:

     (a) credit to such Partner’s Capital Account any amounts that such Partner is obligated to
restore or deemed obligated to restore pursuant to Treasury Regulations Section
1.704-1(b)(2)(ii)(c) and the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1)
and Treasury Regulations Section 1.704-2(i)(5); and

     (b) debit to such Partner’s Capital Account the items described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     “Book Value” means, with respect to any asset, the asset’s adjusted basis for U.S.
federal income tax purposes, except as follows:

     (a) the initial Book Value of any asset that is not Contributed Property as defined in the
Agreement but is otherwise contributed or deemed contributed to the Partnership shall be such
asset’s gross fair market value at the time of such contribution as determined by the General
Partner pursuant to Article IX of the Agreement;

     (b) the initial Book Value of any asset that is Contributed Property as defined in Section
3.1(a) of the Agreement shall be the value set forth in Section 3.1(a) of the
Agreement;

     (c) the Book Value of all Partnership assets may be adjusted in the discretion of the General
Partner to equal their respective gross fair market values, as determined by the General Partner
pursuant to Article IX of the Agreement, at the times specified in Treasury Regulations
Section 1.704-1(b)(2)(iv)(f);

     (d) any adjustments to the adjusted basis of any asset of the Partnership pursuant to Section
734 or Section 743 of the Code shall be taken into account in determining such asset’s Book Value
in a manner consistent with Treasury Regulations Section 1.704-1(b)(2)(iv)(m);

     (e) the Book Value of any Partnership asset distributed or deemed distributed by the
Partnership to any Partner shall be adjusted immediately prior to such distribution to equal its
gross fair market value as of the date of distribution, as determined by the General Partner
pursuant to Article IX of the Agreement; and

A-1

 

     (f) if the Book Value of an asset has been determined pursuant to clauses (a),
(c) or (d) of this definition, to the extent permitted by the Treasury Regulations,
such Book Value shall thereafter be adjusted in the same manner as would the asset’s adjusted basis
for U.S. federal income tax purposes, except that depreciation and amortization deductions shall be
computed based on the asset’s Book Value as so determined, rather than on its adjusted tax basis.

     “Net Profits” and “Net Losses” mean, for any period, the taxable income or
loss, respectively, of the Partnership for such period, in each case as determined for U.S. federal
income tax purposes, but computed with the following adjustments:

     (a) items of income, gain, loss and deduction (including, without limitation, gain or loss on
the disposition of any Partnership asset and depreciation or other cost recovery deduction or
expense) shall be computed based upon the Book Value of the Partnership’s assets rather than upon
such assets’ adjusted bases for U.S. federal income tax purposes;

     (b) any tax-exempt income received by the Partnership shall be deemed for these purposes only
to be an item of gross income;

     (c) any expenditure of the Partnership described in Section 705(a)(2)(B) of the Code (or
treated as described therein pursuant to Treasury Regulations under Section 704(b) of the Code)
shall be treated as a deductible expense;

     (d) there shall be taken into account any separately stated items under Section 702(a) of the
Code;

     (e) if the Book Value of any Partnership asset is adjusted pursuant to clauses (c) or
(e) of the definition of “Book Value” above, or pursuant to clause (d) of such
definition (but only to the extent the adjustment is attributable to a distribution of Investment
Proceeds not in liquidation of a Partner’s Partnership interest), the amount of such adjustment
shall be taken into account in the period of adjustment as gain or loss from the disposition or
deemed disposition of such asset for purposes of computing Net Profits and Net Losses; and

     (f) items of income, gain, loss, deduction or credit allocated pursuant to Section A-6
of this Appendix A shall not be taken into account.

     “Tax Matters Partner” has the meaning set forth in Section A-6.

A-2 Maintenance of Capital Accounts

     (a) A Capital Account shall be maintained for each Partner in accordance with Section 704(b)
of the Code and Treasury Regulations Sections 1.704-1(b) and 1.704-2. The initial balance of each
Capital Account shall be equal to such Partner’s initial capital contribution to the Partnership.

A-2

 

     (b) The Capital Account of each Partner shall be increased by (i) the amount of any cash
contributed by such Partner to the capital of the Partnership, (ii) in the case of any property
contributed by such Partner to the capital of the Partnership, the Book Value of such property (net
of liabilities that the Partnership is considered to assume or take the property subject to) when
contributed, (iii) the amount of any liabilities of the Partnership that are assumed by such
Partner (except for liabilities described in Section A-2(c)(ii) of this Appendix A
that are assumed by such Partner) for purposes of Treasury Regulations Section
1.704-1(b)(2)(iv)(c), (iv) the Net Profits allocated to such Partner, and (v) any gross income and
gain allocated to such Partner.

     (c) The Capital Account of each Partner shall be decreased by (i) the amount of any cash
distribution to such Partner when made, (ii) the Book Value of any property distributed to such
Partner by the Partnership (net of liabilities that the Partner is considered to assume, or take
property subject to) when distributed, (iii) the amount of any liabilities of such Partner that are
assumed by the Partnership (except for liabilities described in Section A-2(b)(ii) of this
Appendix A that are assumed by the Partnership) for purposes of Treasury Regulations
Section 1.704-1(b)(2)(iv)(c), (iv) the Net Losses allocated to such Partner, and (v) any gross
deductions and loss allocated to such Partner.

     (d) In the event that all or a portion of an interest in the Partnership is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent such Capital Account relates to the Transferred Partnership interest.

     (e) The Capital Account of each Partner shall be adjusted to reflect any adjustment to the
Book Value of the Partnership’s assets attributable to the application of Section 734 of the Code
in respect of a distribution in liquidation of such Partner’s Partnership interest to the extent
required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

     (f) It is the intention of the parties that the Capital Accounts of the Partners be kept in
the manner required under Section 704(b) of the Code and Treasury Regulations Sections 1.704-1(b)
and 1.704-2. To the extent any additional adjustment to the Capital Accounts is required by such
provisions, the General Partner is hereby authorized to make such adjustment after notice to the
Partners.

     (g) Except as expressly required herein, no Partner shall be required to restore any negative
balance in its Capital Account. No allocation to any Partner of any loss or deduction, whether
attributable to depreciation or otherwise, shall create any obligation of that Partner to the
Partnership or any other Partner, even if the allocation reduces such Partner’s Capital Account or
creates or increases a deficit in its Capital Account.

A-3

 

A-3 Allocations of Profits and Losses

     (a) After the application of Section A-4, Net Profits and Net Losses for any taxable
year, or portion thereof, shall be allocated among the Partners (and credited or debited to their
Capital Accounts) in such manner so that, after taking into account distributions by the
Partnership and contributions made to the Partnership through the end of such taxable year and the
allocations of Net Profits and Net Losses for such taxable year, (i) the respective positive
Capital Account balances of the Partners would correspond as closely as possible to the amount
each Partner would receive as a cash distribution pursuant to Article IV of the Agreement,
if the Partnership were to liquidate completely immediately after the end of such taxable year and
(ii) any resulting deficit Capital Account balances of the Partners would correspond as closely as
possible with the manner in which economic responsibility for Partnership deficit balances (as
determined in accordance with the principles of Treasury Regulations under Section 704 of the Code)
would be borne by the Partners under the terms of this Agreement if the Partnership were to
liquidate completely immediately after the end of such taxable year. For purposes of the preceding
sentence, the amount of cash to be distributed to each Partner, the amount of each Partner’s
Capital Account and the amount of each Partner’s economic responsibility for Partnership deficit
balances, upon the assumed liquidation, shall be computed by assuming that in connection with such
liquidation, the Partnership sold all of its assets for amounts such that no Net Profits or Net
Losses result from the sale and settled all of its liabilities for amounts such that no Net Profits
or Net Losses result from the settlement. For purposes of applying this Section A-3, the
Capital Account balance of each Partner shall be increased by such Partner’s share of “partnership
minimum gain” and “partner minimum gain” (within the meaning of and in accordance with the Treasury
Regulations under Section 704(b) of the Code). Subject to the other provisions of this
Appendix A, an allocation to a Partner of a share of Net Profit or Net Loss shall be
treated as an allocation of the same share of each item of income, gain, loss or deduction that is
taken into account in computing Net Profit or Net Loss.

     (b) If a Partner Transfers, acquires, or redeems an interest in the Partnership during a
taxable year, the Net Profit or Net Loss (and other items referred to in Section A-4 of
this Appendix A) attributable to such interest for such year shall be allocated between the
transferring Partner and the transferee (or the other Partners in the Partnership) by any method
permitted under Section 706 of the Code as selected by the General Partner.

A-4 Regulatory Allocations and Special Allocations

     (a) Notwithstanding any other provision of the Agreement or this Appendix A, (i)
“partner nonrecourse deductions” (as defined in Treasury Regulations Section 1.704-2(i)), if any,
of the Partnership shall be allocated for each period to the Partner that bears the economic risk
of loss within the meaning of Treasury Regulations Section 1.704-2(i), and (ii) “nonrecourse
deductions” (as defined in Treasury Regulations Section 1.704-2(b)) and “excess nonrecourse
liabilities” (as defined in Treasury Regulations Section 1.752-3(a)), if any, of the Partnership
shall be allocated to the Partners in accordance with their respective percentage interests in Net
Losses.

     (b) The Agreement and this Appendix A shall be deemed to include “qualified income
offset,” “minimum gain chargeback” and “partner nonrecourse debt minimum gain chargeback”
provisions within the meaning of Treasury Regulations under Section 704(b) of the Code.
Accordingly, notwithstanding any other provision of this Agreement or this Appendix A,
items of gross income shall be allocated to the Partners on a priority basis to the extent and in
the manner required by such provisions.

A-4

 

     (c) To the extent that Net Losses or items of loss or deduction otherwise allocable to a
Partner hereunder would cause such Partner to have an Adjusted Capital Account Deficit as of
the end of the taxable year to which such Net Losses or items of loss or deduction relate
(after taking into account the allocation of all items of income and gain for such taxable period),
such Net Losses or items of loss or deduction shall not be allocated to such Partner and instead
shall be allocated to the Partners in accordance with Section A-3 of the Agreement as if
such Partner were not a Partner.

     (d) Any allocations required to be made pursuant to clauses (a), (b), and
(c) above (the “Regulatory Allocations”) (other than allocations, the effect of
which are likely to be offset in the future by other special allocations) shall be taken into
account, to the extent permitted by the Treasury Regulations, in computing subsequent allocations
of income, gain, loss or deduction pursuant to Section A-3 so that the net amount of any
items so allocated and all other items allocated to each Partner shall, to the extent possible, be
equal to the amount that would have been allocated to each Partner pursuant to Section A-3
had such Regulatory Allocations under this Section A-4 not occurred.

     (e) If any Partner is treated for income tax purposes as realizing ordinary income because of
receipt of its Partnership interest (whether under Section 83 of the Code or any similar provisions
of any law, rule or regulations or any other applicable law, rule, regulation or doctrine) and the
Partnership is entitled to any offsetting deduction, the Partnership’s deduction shall be allocated
among the Partners in such manner as to, as nearly as possible, offset such ordinary income
realized by such Partner.

A-5 Tax Allocations

     (a) For federal income tax purposes, except as otherwise provided in this Section A-5,
each item of income, gain, loss, and deduction and credit shall be allocated among the Partners in
the same manner as its corresponding item of book income, gain, loss, deduction or credit is
allocated pursuant to this Appendix A.

     (b) In accordance with Sections 704(b) and 704(c) of the Code and the Treasury Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership asset contributed (or
deemed contributed) to the capital of the Partnership shall, solely for federal income tax
purposes, be allocated among the Partners so as to take into account any variation between the
adjusted basis of such Partnership asset for federal income tax purposes and its Book Value upon
its contribution (or deemed contribution). If the Book Value of any Partnership asset is adjusted,
subsequent allocations of taxable income, gain, loss and deduction with respect to such Partnership
asset shall take account of any variation between the adjusted basis of such Partnership asset for
federal income tax purposes and the Book Value of such Partnership asset in the manner prescribed
under Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder. The General Partner
shall select the manner by which variations between Book Value and adjusted basis are taken into
account in accordance with Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder.

A-5

 

     (c) The provisions of this Appendix A (and other related provisions in the Agreement)
pertaining to the allocation of items of Partnership income, gain, loss, deduction, and credit
shall be interpreted consistently with the Treasury Regulations, and to the extent
unintentionally inconsistent with such Treasury Regulations, shall be deemed to be modified to
the extent necessary to make such provisions consistent with the Treasury Regulations.

A-6 Tax Matters Partner; Management Authority Regarding Tax and Accounting

     (a) The General Partner is designated the “Tax Matters Partner” (as defined in Section
6231(a)(7) of the Code) to manage administrative tax proceedings conducted at the partnership level
by the Internal Revenue Service with respect to Partnership matters. The General Partner is
specifically directed and authorized to take whatever steps the General Partner, in its sole
discretion, deems necessary or desirable to perfect such designation, including, without
limitation, filing any forms or documents with the Internal Revenue Service and taking such other
action as may from time to time be required under Treasury regulations. The Tax Matters Partner
shall have full authority to extend the statute of limitations and control any tax audit or other
proceeding on behalf of the Partnership. Expenses of administrative proceedings relating to the
determination of Partnership items at the Partnership level undertaken by the Tax Matters Partner
will be deemed to be Program Expenses.

     (b) All matters concerning (i) allocations of Net Profits and Net Losses and allocations for
tax purposes, (ii) distributions by the Partnership, including the taxes thereon, and (iii)
accounting procedures and determinations, tax determinations, determinations as to on whose behalf
expenses were incurred and the attribution of fees and expenses to a Program Asset, and other
determinations not specifically and expressly provided for by the terms of this Agreement, shall be
determined by the General Partner, whose determination shall be final and conclusive as to all the
Partners absent manifest clerical error.

     (c) At the General Partner’s sole discretion, the General Partner may cause the Partnership to
make or refrain from making any and all elections permitted by the Code and the Treasury
Regulations and any state, local, or foreign tax elections. Notwithstanding the foregoing, it is
intended that the Partnership be treated as a partnership for U.S. federal income tax purposes, and
neither the Partnership nor any Partner shall make any election inconsistent with such treatment
without the unanimous written consent of the Partners.

A-6

 

APPENDIX B: 

Apportionment and Modification of 

Carried Interest to IP Limited Partners

B-1 Definitions

     For purposes of this Appendix B, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Acquisition Date” means, with respect to a Program Asset, the date the Partnership
first made an investment in such Program Asset (or in the case of a Program Asset that is
contributed to the Partnership, the date of such contribution).

     “Allocated Reimbursement Payments” means the amount of Reimbursement Payments
allocated by the General Partner to each Program Asset. Unless the General Partner adopts another
method (with notification to each other Partner), the General Partner shall allocate the
Reimbursement Payments made with respect to a particular year to and among the Program Assets held
by the Partnership during that year based on the relative Invested Capital in such Program Assets
and adjusted (on a weighted average basis) to take into account Program Assets that are held for
less than an entire year.

     “Carry Account” has the meaning set forth in Section B-3.

     “Carry Loss” means, with respect to the Realization of any Program Asset, 20% of the
amount, if any, by which the combined Investment Proceeds and Sponsor Proceeds generated by such
Program Asset are less than the sum of the Full Return Amount and the Hurdle Return Amount of such
Program Asset. The General Partner shall use its reasonable discretion in determining the amount
of Carry Loss (including adjusting previous allocations of Carry Loss) so as to cause the amount of
Carry Loss to accurately reflect the amount by which all Carry Distributions that will ultimately
be apportioned by the Partnership with respect to all other Program Assets will be reduced, which
determination shall then be binding on the Partnership and the Partners.

     “Carry Profit” means, with respect to any particular Program Asset, the amount by
which the Investment Proceeds or Sponsor Proceeds generated by that Program Asset produce or lead
to the production of Carry Distributions, as determined by the General Partner. In general, the
Carry Profit with respect to any Program Asset will equal the sum of the following amounts:

     (a) 0% of that portion of the combined Investment Proceeds and Sponsor Proceeds from such
Program Asset as does not exceed the sum of the applicable Full Return Amount and the applicable
Hurdle Return Amount;

     (b) 80% of that portion of the combined Investment Proceeds and Sponsor Proceeds that is in
excess of the sum of the applicable Full Return Amount and the applicable Hurdle Return Amount but
that is less than the sum of the applicable Full Return Amount and 133% of the applicable Hurdle
Return Amount; and

B-1

 

     (c) to the extent in excess of the sum of clauses (a) and (b) above, (i) 20%
of that portion of the Investment Proceeds that is in excess of the sum of the applicable Full
Return Amount plus (ii) 100% of any Sponsor Proceeds.

The General Partner shall use its discretion in determining the amount of Carry Profit (including
adjusting previous allocations of Carry Profit) so as to cause the amount of Carry Profit (net of
the allocated Carry Loss) to accurately reflect the amount of Carry Distributions that will
ultimately be distributed and that are allocable to each Program Asset.

     “Cause Event” means with respect to any IP Limited Partner,

     (a) any act or omission constituting gross negligence, willful misconduct, or fraud in the
performance of such IP Limited Partner’s duties or obligations as an employee of the Program
Manager;

     (b) any action or omission that causes there to be a material breach of any applicable
management agreement to which the Program Manager is a party;

     (c) any willful refusal to perform a duty as directed by Woodbridge or any of its subsidiaries
(including the General Partner) if such duty is within the scope of such IP Limited Partner’s
duties to the Program Manager, Woodbridge or any of its subsidiaries; or

     (d) any conviction of any crime constituting a felony in the jurisdiction involved (other than
a motor vehicle felony for which only a non-custodial penalty is imposed), whether or not involving
the Program Manager or the Partnership.

     “Full Return Amount” means, with respect to a Program Asset, the sum of (i) the
aggregate Invested Capital and (ii) the Allocated Reimbursement Payments, in each case
attributable to such Program Asset.

     “Hurdle Return Amount” means, with respect to a Program Asset, as of any date of
determination, the summation of an amount calculated on a daily basis through the applicable date
of determination equal to 10% per annum, compounded annually, of (i) the aggregate Invested Capital
and the Allocated Reimbursement Payments, in each case attributable to such Program Asset,
minus (ii) the aggregate amount of all Investment Proceeds attributable to such Program
Asset on or prior to such day.

     “Tenured Asset” means, with respect to any IP Limited Partner, any Program Asset
acquired by the Partnership during the period when such Person was an IP Limited Partner (and not a
Terminated IP Limited Partner) or any other Program Asset in which such Person has been granted a
Carry Percentage by the General Partner. For the avoidance of doubt, an IP Limited Partner will
not receive a Carry Percentage with respect to any asset that is not a Tenured Asset.

B-2

 

     “Terminated IP Limited Partner” means any IP Limited Partner whose employment with the
Woodbridge Employer is terminated for any reason, whether voluntarily or involuntarily, and with or
without cause. In the General Partner’s discretion, an IP Limited Partner whose employment with
the Woodbridge Employer is terminated contemporaneously with such IP Limited Partner becoming
employed by another entity within Woodbridge shall not be treated as
having been terminated, and the new employer shall become the Woodbridge Employer for purposes
of this definition. For purposes of this Agreement, in the case of any Family Related Partner, the
termination of employment with the Woodbridge Employer of the IP Limited Partner with whom such
Family Related Partner is associated shall cause such Family Related Partner to become a Terminated
IP Limited Partner.

     “Vested Percentage” means, with respect to an IP Limited Partner and each Program
Asset, that percentage to be applied in determining the amount of Carry Profit or Carry Loss to be
allocated to any IP Limited Partner as set forth in the vesting provisions in Section B-2.

     “Woodbridge Employer” means, with respect to any IP Limited Partner, the Program
Manager if the IP Limited Partner is an employee of the Program Manager. Otherwise it means the
entity within Woodbridge that is the employer of such IP Limited Partner.

B-2 Vesting Provisions 

     (a) Non-Tenured Assets. An IP Limited Partner will have a Vested Percentage of 0% in any
Program Asset that is not a Tenured Asset with respect to such Partner.

     (b) Tenured Assets. The Vested Percentage of an IP Limited Partner with respect to a Tenured
Asset will be as follows:

	 	(i)	 	Distributions or Realizations While Employed. An IP
Limited Partner will have a Vested Percentage of 100% in all Carry Profit or
Carry Loss attributable to any Investment Proceeds or Sponsor Proceeds received
by the Partnership from such Partner’s Tenured Assets, or any other
consequences of a Realization of a Tenured Asset, if those proceeds are
received or the Realization occurs prior to the IP Limited Partner becoming a
Terminated IP Limited Partner. For the avoidance of doubt, an IP Limited
Partner shall have a Vested Percentage of 100% in any Carry Loss associated
with an unreversed Impairment that arises on or prior to an IP Limited Partner
becoming a Terminated IP Limited Partner.
	 
	 	(ii)	 	Termination for Cause. An IP Limited Partner will have
a Vested Percentage of 0% in all Carry Profit or Carry Loss attributable to any
Investment Proceeds or Sponsor Proceeds received by the Partnership from such
IP Limited Partner’s Tenured Assets, or any other consequences of a Realization
of a Tenured Asset, if those proceeds are received or the Realization occurs
after such IP Limited Partner has become a Terminated IP Limited Partner
because of the occurrence of a Cause Event with respect to such IP Limited
Partner.
	 
	 	(iii)	 	Termination Not for Cause. An IP Limited Partner will
have a Vested Percentage of 75% in all Carry Profit or Carry Loss attributable
to any Investment Proceeds or Sponsor Proceeds received by the Partnership from
such IP Limited Partner’s Tenured Assets, or any other consequences of a
Realization of a Tenured Asset, if those proceeds are received or the
Realization occurs after such IP Limited Partner has become a Terminated
IP Limited Partner because (i) the Woodbridge Employer terminated the
employment for a reason other than the occurrence of a Cause Event with
respect to such IP Limited Partner or (ii) of the death, permanent
disability or legal incapacity of such IP Limited Partner.

B-3

 

	 	(iv)	 	Voluntary Resignation. An IP Limited Partner will have
a Vested Percentage as determined pursuant to the following sentence in all
Carry Profit or Carry Loss attributable to any Investment Proceeds or Sponsor
Proceeds received by the Partnership from such IP Limited Partner’s Tenured
Assets, or any other consequences of a Realization of a Tenured Asset, if those
proceeds are received or the Realization occurs after such IP Limited Partner
has become a Terminated IP Limited Partner because the IP Limited Partner
voluntarily left the employment of the Woodbridge Employer. For purposes of
this clause (iv), the Vested Percentage shall be determined separately
for each Program Asset and shall equal: (A) 25% upon the Acquisition Date of
such Program Asset, (B) an additional 12.5 percentage points per year upon each
of the first four anniversaries of the Acquisition Date, and (C) the remainder
when the Tenured Asset is Realized.

     (c) Permitted Modifications. Notwithstanding the foregoing, the General Partner may, after
consultation with the Program Manager, modify this vesting schedule for any additional IP Limited
Partner admitted to the Partnership pursuant to Section 7.5 of the Agreement, including
granting an additional IP Limited Partner the right to have a Vested Percentage in Program Assets
whose Acquisition Date preceded the time such additional IP Limited Partner was admitted to the
Partnership.

     (d) Permitted Adjustments. As described in Section B-3(b), the General Partner, in
its discretion, is permitted to make adjustments, including retroactive adjustments, to the
allocations of Carry Profit and Carry Loss. The ability of the General Partner to make these
adjustments shall not be restricted by the application of the vesting provisions in this
Section B-2.

     (e) Family Related Partner. A Family Related Partner’s Vested Percentage shall be equivalent
to the Vested Percentage of the IP Limited Partner associated with such Family Related Partner.

B-3 Determination of Carry Accounts

     (a) Maintenance of Carry Accounts. A separate bookkeeping account (a “Carry Account”)
shall be maintained for each IP Limited Partner. Immediately prior to the Partnership making any
Carry Distributions or upon the Realization of a Program Asset, the Carry Profit (or Carry Loss)
determined with respect to such distribution or Realization shall be credited (or debited, and, if
necessary, to an amount below zero) to the Carry Account of each IP Limited Partner in an amount
equal to such IP Limited Partner’s Carry Percentage in the Program Asset giving rise to such Carry
Profit (or Carry Loss) multiplied by such IP Limited Partner’s Vested Percentage in such Carry
Profit (or Carry Loss). An IP Limited Partner’s Carry Account shall be debited by the amount of
Carry Distributions made to such IP Limited Partner.

B-4

 

     (b) Adjustments to Carry Accounts. The General Partner, in its discretion, is permitted to
make adjustments, including retroactive adjustments, to the allocations of Carry Profit and Carry
Loss so that, on an aggregate basis the Carry Accounts of the IP Limited Partners more closely
match the aggregate rights of the IP Limited Partners to receive Carry Distributions or to make
clawback payments as provided in Article IV of the Agreement. Except to the extent the
General Partner determines otherwise (with notice to the other Partners), the General Partner
intends to cause any shortfall in the aggregate net Carry Profits (i.e., net of aggregate Carry
Losses) as compared to the aggregate amount of Carry Distributions (net of clawback payments)
distributable to the IP Limited Partners in accordance with Article IV of the Agreement to
be allocated on a pro rata basis to each Program Asset that otherwise produced Carry Profit (and
among them based on the relative amounts of Carry Profit).

     (c) Deemed Realization. Solely for purposes of determining an IP Limited Partner’s Carry
Account, the General Partner may, upon the admittance of a new Carried Interest Partner or at any
other time, deem there to have been a Realization of one or more Program Assets at the Fair Market
Value at such time of such Program Asset, in which case the deemed Carry Profit or Carry Loss
derived from such deemed Realization shall be allocated among the IP Limited Partners and charged
to the Carry Accounts of the IP Limited Partners. Any future actual or deemed Realization of a
Program Asset shall take into account the prior deemed Realization or Realizations.
Notwithstanding the foregoing, for purposes of determining an IP Limited Partner’s Vested
Percentage pursuant to Section B-2, such deemed Realizations shall be disregarded.

B-4 Distributions to the IP Limited Partners

     Subject to the holdback provisions of Section 4.5 of the Agreement, each IP Limited
Partner shall be entitled to receive an amount of Carry Distributions equal to the positive balance
in his Carry Account, provided that the sum of all of the Carry Distributions made to date
to the IP Limited Partners as a group cannot exceed the product of (A) the total Carry
Distributions made to date times (B) the aggregate Carry Percentages for all of the IP
Limited Partners (adjusted as necessary to take into account changes in Carry Percentages since the
formation of the Partnership). If the amount of Carry Distributions to be made to the IP Limited
Partners as a group is insufficient to reduce the positive Carry Account balances of all IP Limited
Partners to zero, then Carry Distributions made to the IP Limited Partners as a group will be made
pro rata among the IP Limited Partners based on their relative Carry Account balances. If the
amount of Carry Distributions to be made to the IP Limited Partners exceeds the aggregate positive
Capital Account balances of the IP Limited Partners, such excess shall be distributed among the IP
Limited Partners in the manner that the General Partner determines most appropriately reflects the
IP Limited Partners’ relative Carry Percentages (as adjusted by the Vested Percentages) in the
Program Assets giving rise to the Carry Distributions.

B-5 Responsibility for Gross Clawback Amount

     Each IP Limited Partner shall be responsible (only to the extent of Section 4.6(c) of
the Agreement) for a portion of the Gross Clawback Amount equal to the negative balance, if any, in
such IP Limited Partner’s Carry Account as of the final liquidating distribution of assets of the
Partnership pursuant to Section 8.2 of the Agreement.

B-6 83(b) Election

     Each Carried Interest Partner shall make a timely election under Section 83(b) of the Code
with respect to such Carried Interest Partner’s interest in the Partnership.

B-5

 

AGREEMENT OF LIMITED PARTNERSHIP

OF

BLUEGREEN PROGRAM PARTNERSHIP, LP

Date: March 13, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	ARTICLE I GENERAL PROVISIONS	 	 	1	 
	 	1.1	 	 	Formation

	 	 	1	 
	 	1.2	 	 	Name

	 	 	1	 
	 	1.3	 	 	Purpose

	 	 	2	 
	 	1.4	 	 	Principal Office

	 	 	2	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II DEFINITIONS; DETERMINATIONS	 	 	2	 
	 	2.1	 	 	Definitions

	 	 	2	 
	 	2.2	 	 	Determinations

	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III INVESTED CAPITAL; CAPITAL ACCOUNTS	 	 	6	 
	 	3.1	 	 	Invested Capital

	 	 	6	 
	 	3.2	 	 	Future Contributions

	 	 	6	 
	 	3.3	 	 	Capital Accounts

	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV DISTRIBUTIONS	 	 	7	 
	 	4.1	 	 	Distribution Policy

	 	 	7	 
	 	4.2	 	 	Reimbursement Payment

	 	 	7	 
	 	4.3	 	 	Priority of Distributions

	 	 	8	 
	 	4.4	 	 	Apportionment of Carry Distributions

	 	 	9	 
	 	4.5	 	 	IP Clawback Reserve

	 	 	9	 
	 	4.6	 	 	Clawback Obligations

	 	 	10	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V PROGRAM MANAGER	 	 	11	 
	 	5.1	 	 	Program Manager

	 	 	11	 
	 	5.2	 	 	Fees

	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI GENERAL PARTNER	 	 	12	 
	 	6.1	 	 	Management Authority

	 	 	12	 
	 	6.2	 	 	No Liability to Partnership or Limited Partners

	 	 	12	 
	 	6.3	 	 	Indemnification

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII LIMITED PARTNERS	 	 	14	 
	 	7.1	 	 	Limited Liability

	 	 	14	 
	 	7.2	 	 	No Participation in Management

	 	 	14	 
	 	7.3	 	 	Transfer of Limited Partnership Interests

	 	 	14	 
	 	7.4	 	 	No Termination

	 	 	15	 
	 	7.5	 	 	Additional Limited Partners

	 	 	15	 
	 	7.6	 	 	Reimbursement for Payments on Behalf of a Partner

	 	 	15	 

     -i-     

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	ARTICLE VIII DURATION AND TERMINATION	 	 	16	 
	 	8.1	 	 	Term

	 	 	16	 
	 	8.2	 	 	Termination and Liquidation

	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX VALUATION OF PARTNERSHIP ASSETS	 	 	17	 
	 	9.1	 	 	Normal Valuation

	 	 	17	 
	 	9.2	 	 	Restrictions on Transfer or Blockage

	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X BOOKS OF ACCOUNTS; MEETINGS	 	 	17	 
	 	10.1	 	 	Books

	 	 	17	 
	 	10.2	 	 	Fiscal Year

	 	 	17	 
	 	10.3	 	 	Reports

	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	18	 
	 	11.1	 	 	Amendments

	 	 	18	 
	 	11.2	 	 	Successors

	 	 	18	 
	 	11.3	 	 	Governing Law; Severability

	 	 	18	 
	 	11.4	 	 	Notices

	 	 	18	 
	 	11.5	 	 	Arbitration

	 	 	19	 
	 	11.6	 	 	Miscellaneous

	 	 	19	 
	 	11.7	 	 	No Third Party Beneficiaries

	 	 	19	 
	 	 	 	 	 
	 	 	 	 
	APPENDIX A: Tax and Accounting Provisions	 	 	A-1	 
	 	A-1	 	 	Definitions

	 	 	A-1	 
	 	A-2	 	 	Maintenance of Capital Accounts

	 	 	A-2	 
	 	A-3	 	 	Allocations of Profits and Losses

	 	 	A-4	 
	 	A-4	 	 	Regulatory Allocations and Special Allocations

	 	 	A-4	 
	 	A-5	 	 	Tax Allocations

	 	 	A-5	 
	 	A-6	 	 	Tax Matters Partner; Management Authority Regarding
Tax and Accounting

	 	 	A-6	 
	 	 	 	 	 
	 	 	 	 
	APPENDIX B: APPORTIONMENT AND MODIFICATION OF CARRIED INTEREST TO IP LIMITED PARTNERS	 		 B-1	
	 	B-1	 	 	Definitions

	 	 	B-1	 
	 	B-2	 	 	Vesting Provisions

	 	 	B-3	 
	 	B-3	 	 	Determination of Carry Accounts

	 	 	B-4	 
	 	B-4	 	 	Distributions to the IP Limited Partners

	 	 	B-5	 
	 	B-5	 	 	Responsibility for Gross Clawback Amount

	 	 	B-5	 
	 	B-6	 	 	83(b) Election

	 	 	B-5	 

     -ii-     

 

 

AGREEMENT OF LIMITED PARTNERSHIP

OF

BLUEGREEN PROGRAM PARTNERSHIP, LP

     THIS AGREEMENT OF LIMITED PARTNERSHIP is deemed to be effective as of March 13, 2009 (the
“Effective Date”), by and among the General Partner, the Sponsor Partner, the IP Limited
Partners, the Program Manager and the Residual Limited Partner (each as defined below).

     WHEREAS, the Partnership (as defined below) was formed pursuant to the Certificate (as defined
below);

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

GENERAL PROVISIONS

1.1 Formation

     The Partners hereby agree to form a limited partnership (the “Partnership”) pursuant
to and in accordance with the Florida Revised Uniform Limited Partnership Act of 2005, as amended
from time to time (the “Partnership Act”). The term of the Partnership (the
“Term”) commenced upon the filing of the Certificate of Limited Partnership (the
“Certificate”) with the Secretary of State of Florida (the date of such filing is referred
to herein as the date of “formation” of the Partnership) and shall continue until dissolution and
termination of the Partnership in accordance with the provisions of ARTICLE VIII hereof.

1.2 Name

     As of the date hereof, the General Partner has filed the Certificate contemporaneously with
the execution of this Agreement and the Partners hereby agree that the name of the Partnership
shall be Bluegreen Program Partnership, LP, or such other name or names as the General Partner may
designate from time to time.

 

 

1.3 Purpose

     The Partnership is organized for the principal purpose of (i) acquiring, managing, and
supervising the interests in the Program Assets, and (ii) engaging in such other activities
incidental or ancillary thereto as the General Partner deems necessary or advisable.

1.4 Principal Office

     The General Partner shall maintain a principal office in Fort Lauderdale, Florida, or at such
other place or places as the General Partner may from time to time designate.

ARTICLE II

DEFINITIONS; DETERMINATIONS

2.1 Definitions

     Capitalized terms used in this Agreement have the meanings set forth below or as otherwise
specified herein:

     “Agreement” means this Agreement of Limited Partnership of Bluegreen Program
Partnership, LP, as amended or modified from time to time in accordance with its terms.

     “Alternative Clawback Reserve” has the meaning set forth in Section 4.5.

     “Capital Account” is the account established for each Partner in accordance with the
provisions of Appendix A hereto.

     “Capital Proceeds” means any Investment Proceeds received by the Partnership in
respect of a Program Asset that are attributable to a Realization event.

     “Carried Interest Partners” means the Sponsor Partner, the IP Limited Partners, and
the Residual Limited Partner, in their capacities as Partners entitled to receive Carry
Distributions.

     “Carry Distributions” means those distributions paid to the Carried Interest Partners
in their capacities as such pursuant to Section 4.3(a)(ii) and Section
4.3(a)(iii)(B).

     “Carry Percentage” means, with respect to a Carried Interest Partner, its percentage
interest in Carry Distributions as set forth for such Partner on Schedule I hereof.

     “Certificate” has the meaning set forth in Section 1.1.

     “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

     “Contributed Property” means 100 percent of the shares of common stock of Bluegreen
Corporation constituting all of the shares of Bluegreen Corporation currently held by Woodbridge.

-2-

 

     “Covered Party” means each of the Partners, a director, officer, partner or member (or
a former director, officer, partner or member) of any Partner, and to the extent approved by the
General Partner in its sole discretion, any other employee of a Partner or an agent acting at the
direction of the General Partner or the Program Manager, and in any such case, the heirs and legal
representatives of any such person.

     “Current Proceeds” means any Investment Proceeds received by the Partnership in
respect of a Program Asset that are not attributable to a Realization event, including dividends,
rents, or interest with respect to such Program Asset.

     “Deal Fees” means those amounts received by the General Partner (or an affiliate of
the General Partner) as break-up fees, director fees, “flip” fees, investment banking, consulting,
or similar transaction fees, but not including any amount received as reimbursement for expenses
directly related to the provision of such services for which the fee is being paid. “Deal Fees”
also means all amounts earned by any employee or agent (in such capacity) of the Program Manager
with respect to a Program Asset or other activities of the Partnership, but not including payments
to such employee or agent from the Program Manager.

     “Effective Date” has the meaning set forth in the Recitals.

     “Fair Market Value” of a security or a Program Asset means the amount that would be
realized as Investment Proceeds if such security or Program Asset had been sold at its “value”
(determined in accordance with Article IX).

     “Family Related Partner” means, with respect to any IP Limited Partner, any Person who
is a spouse or lineal descendent of the parents of such IP Limited Partner or any Person which is a
trust formed by such IP Limited Partner for investment by or for the benefit of such IP Limited
Partner’s spouse or any lineal descendants of the parents of such IP Limited Partner or of such IP
Limited Partner’s spouse and/or any charitable organization; provided that any cause of
action or other dispute arising in relation to a Family Related Partner’s interest may only be
pursued by the IP Limited Partner associated with such Family Related Partner, except if such IP
Limited Partner has died or become legally incapacitated.

     “GAAP” has the meaning set forth in Section 10.3.

     “General Partner” means Bluegreen Program GP, LLC, in its capacity as general partner
of the Partnership, and any successor general partner of the Partnership.

     “Gross Clawback Amount” has the meaning specified in Section 4.6.

     “Impairment” means, with respect to a Program Asset, a determination by the General
Partner that the Program Asset is not expected to be able to provide for cash flow or realization
proceeds a return to investors of at least the amount of Invested Capital associated with such
asset as well as a 10% per annum compounded annual return on such Invested Capital. The General
Partner’s determination that a Program Asset has suffered an Impairment for purposes of this
Agreement shall be independent of any determination that the value of the Program Asset is reduced
for purposes of the financial statements prepared under generally accepted accounting principles.

-3-

 

     “Invested Capital” has the meaning set forth in Section 3.1.

     “Investment Proceeds” means the gross investment returns (whether in the form of cash,
securities, or other property) received by the Partnership in respect of the Partnership’s Invested
Capital in any Program Assets (i.e., in its capacity as an investor and not with respect to the
provision of any services with respect to such Program Assets or to any other investor in such
Program Assets). For the avoidance of doubt, the amount of Investment Proceeds shall be determined
without regard to any management fees, carried interest, or similar deductions that may be charged
by the General Partner or the Program Manager to any investment vehicle through which the
Partnership holds any of its investments.

     “IP Clawback Reserve” has the meaning set forth in Section 4.5.

     “IP Limited Partners” means any Persons designated as IP Limited Partners on
Schedule I hereof, in their capacities as limited partners of the Partnership, or any other
Persons that are admitted as IP Limited Partners in accordance with the terms hereof, in each case
for so long as such Persons continue to be IP Limited Partners hereunder, and “IP Limited
Partner” shall mean each of such Persons individually.

     “Limited Partners” means the IP Limited Partners and the Residual Limited Partner, and
“Limited Partner” shall mean each of such Persons individually.

     “Overall
Hurdle Clawback” has the meaning set forth in the limited partnership agreement
governing Woodbridge Executive Incentive Plan 1, LP.

     “Partners” means collectively the General Partner (including in its capacity as
Sponsor Partner), the Limited Partners, the Program Manager and any other Person that is admitted
to the Partnership as a partner in accordance with the terms hereof, and “Partner” shall
mean each of such persons individually.

     “Partnership” has the meaning set forth in Section 1.1.

     “Partnership Act” has the meaning set forth in Section 1.1.

     “Platform” means all of the program partnerships (or other entities) that are designated as a
“Program Partnership” in accordance with the terms of the governing agreement of Woodbridge
Executive Incentive Plan 1, LP.

     “Person” means an individual, a partnership (general, limited, or limited liability),
a corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental, quasi-governmental, judicial, or
regulatory entity or any department, agency, or political subdivision thereof.

     “Portfolio Company” means Bluegreen Corporation and such other entities, the interests
in which are Program Assets.

     “Preferred Return” has the meaning set forth in Section 4.3.

     “Program Assets” means those assets held by the Partnership as part of the
Partnership’s investment program, and “Program Asset” shall mean each of such Program
Assets individually.

     “Program Expenses” means those costs, expenses, liabilities and obligations relating
to the Partnership’s activities, investments and business (to the extent not borne or reimbursed by
the Portfolio Company) as set forth on Schedule II hereof.

-4-

 

     “Program Manager” means Woodbridge Fund I, LLC.

     “Program
Partnership” means each partnership (or other entity) that is designated as a
“Program Partnership” in accordance with the terms of the governing documents of Woodbridge
Executive Incentive Plan 1, LP. All such partnerships together with the Partnership are the
“Program Partnerships.”

     “Realization” means the sale, redemption, or other disposition of, or any other
receipt of a capital nature, including proceeds from the recapitalization or refinancing at the
investment level (as determined by the General Partner) with respect to the whole or part of, or
the permanent write-off of a Program Asset, and “Realized” shall be construed accordingly.
To the extent a Program Asset has suffered an Impairment of less than the whole of the Program
Asset, a portion of the Program Asset equal to the amount of the Impairment shall be treated as if
sold for no consideration. If the General Partner determines that an Impairment has been reversed,
the General Partner shall adjust the allocations and distributions made by the Partnership so as to
reverse the effects of the prior Impairment.

     “Realized Base Contributions” has the meaning set forth in Section 4.3(a)(i).

     “Regulatory Allocations” has the meaning set forth in Appendix A hereto.

     “Reimbursement Payment” means the special payment to the Program Manager pursuant to
Section 4.2.

     “Reimbursing Partner” has the meaning set forth in Section 7.6(a).

     “Residual Limited Partner” means the Person entitled to receive the amounts of Carry
Distributions not made to the Sponsor Partner or the IP Limited Partners, which Person will be
Woodbridge Executive Incentive Plan 1, LP.

     “Return Distributions” means those distributions to the General Partner other than
Carry Distributions as set forth in Section 4.3.

     “Sponsor Partner” means the Person entitled to receive the amounts of Carry
Distributions apportioned to the Sponsor Partner pursuant to the terms hereof, which Person
initially will be the General Partner, in its capacity as Sponsor Partner.

     “Sponsor Proceeds” means all other proceeds received by the Partnership from or with
respect to its assets other than Investment Proceeds. Sponsor Proceeds include management fees,
carried interest, and Deal Fees charged by the Partnership to other investors in an investment
vehicle through which the Partnership holds its assets; provided, however, that to the
extent the General Partner determines that Deal Fees arising with respect to a Partnership asset
are attributable to the capital invested in that asset by the Partnership, such fees will be
treated as Investment Proceeds, rather than Sponsor Proceeds. For the avoidance of doubt, Deal
Fees attributable to the capital invested by a third party or not attributable to any investment of
capital will be treated as Sponsor Proceeds.

     “Term” has the meaning set forth in Section 1.1.

     “Transfer” means a transfer in any form, including a sale, assignment, conveyance,
pledge, mortgage, encumbrance, hypothecation, exchange, gift, or other disposition, or the act of
so doing, whether voluntarily, by operation of law, pursuant to judicial process, or otherwise as
the context requires.

-5-

 

     “Woodbridge” means Woodbridge Holdings Corporation or any direct or indirect
subsidiary of such corporation.

2.2 Determinations

     Unless otherwise indicated, any determinations or calculations conducted pursuant to this
Agreement shall be determined or calculated as of the date of such determination or calculation.

ARTICLE III

INVESTED CAPITAL; CAPITAL ACCOUNTS

3.1 Invested Capital 

     As of the Effective Date, the Partners shall be required to make the following contributions
to the capital of the Partnership (“Invested Capital”):

     (a) The General Partner shall contribute the Contributed Property to the Partnership, which
for purposes hereof shall be treated as Invested Capital of $120,667,123.00, and such Contributed
Property will be treated as having a Book Value as defined in Appendix A hereto.

     (b) Each IP Limited Partner shall contribute $250 to the capital of the Partnership.

     (c) The Residual Limited Partner shall contribute $250 to the capital of the Partnership.

     (d) The Program Manager shall contribute $250 to the capital of the Partnership.

The right of each IP Limited Partner, the Residual Limited Partner, and the Sponsor Partner to
receive Carry Distributions represents a profits interest received for services rendered or to be
rendered to or for the benefit of the Partnership.

3.2 Future Contributions

     (a) Other than the required Invested Capital described in Section 3.1, any
reimbursement payment pursuant to Section 7.6, or as may be required by applicable law, no
Partner shall have any further obligation to contribute additional Invested Capital to the
Partnership; provided that the General Partner shall be required to make special
distributions to the Partnership to the extent that such special distributions are necessary to
reduce any IP Limited Partner’s Alternative Clawback Reserve as described in Section
4.2(c).

     (b) The General Partner, in its discretion, whether or not in connection with the admission of
any new Partner to the Partnership in accordance with Section 7.5, may permit a Partner to
contribute additional Invested Capital to the Partnership under such circumstances as may be
determined by the General Partner.

-6-

 

     (c) The General Partner may cause the Partnership to borrow funds, including from Woodbridge,
under such terms as the General Partner may determine, in order to permit the Partnership to meet
its liquidity needs.

3.3 Capital Accounts

     (a) A capital account shall be maintained for each Partner in accordance with the provisions
of Appendix A hereto.

ARTICLE IV

DISTRIBUTIONS

4.1 Distribution Policy

     (a) Except as set forth in Section 4.1(c) and Section 4.4, the General Partner
shall periodically cause excess cash or cash equivalents held in the Partnership to be distributed
to the Limited Partners in accordance with Section 4.3.

     (b) Distributions may be in the form of cash, property, or securities. Except as otherwise
provided herein, for purposes of this Agreement, an in-kind distribution of non-cash property shall
be treated as if an amount of cash equal to the Fair Market Value of such property had been
distributed.

     (c) In determining the amounts that may be available for distribution to the Partners, the
General Partner shall first cause the Partnership to satisfy its current obligations, including its
obligation to make any Reimbursement Payment to the Program Manager in accordance with Section
4.2. In addition, the General Partner may cause the Partnership to retain such amounts as the
General Partner determines is appropriate to act as reserves for any fixed or contingent payments
or liabilities of the Partnership (including future amounts of Reimbursement Payments) for which
the Partnership may be liable.

4.2 Reimbursement Payment

     Prior to making any distributions to the Partners pursuant to Section 4.3, the
Partnership shall make a reimbursement payment (the “Reimbursement Payment”) to the Program
Manager equal to the amount of Program Expenses (including, for the avoidance of doubt, interest
accruing on the Program Manager’s line of credit used to finance such expenses) borne by, and
required to be paid by, the Program Manager that have yet to be reimbursed by the Partnership to
the Program Manager.

-7-

 

4.3 Priority of Distributions

     After making any Reimbursement Payment pursuant to Section 4.2, except to the extent
specifically provided in this Agreement to the contrary, distributions by the Partnership shall be
made among the Partners as follows:

     (a) Capital Proceeds and Sponsor Proceeds. Distributions designated as Capital Proceeds or
Sponsor Proceeds by the General Partner shall be distributed as follows:

	 	(i)	 	First, 100% to the General Partner as “Return
Distributions” until the General Partner has received aggregate
distributions sufficient to provide the General Partner a 10% per annum
cumulative annually compounded internal rate of return (the “Preferred
Return”) on the General Partner’s Invested Capital attributable to all
Program Assets (or portion thereof) that have been Realized (such Invested
Capital, the “Realized Base Contributions”), provided that for
purposes of determining the Preferred Return, the Invested Capital attributable
to the contribution of the Contributed Property shall be treated as having been
made on September 1, 2008 (notwithstanding that such date pre-dates the date of
this Agreement). The General Partner will include as Return Distributions any
amounts received that relate to the investment in such Program Assets,
regardless of whether such amounts are received through, or outside of, the
Partnership. For the avoidance of doubt, an “internal rate of return”
calculation encompasses a return of, as well as a return on, the Realized Base
Contributions.
	 
	 	(ii)	 	Second, 20% to the General Partner (as additional
Return Distributions) and 80% to the Carried Interest Partners (and among them
as provided in Section 4.4) as “Carry Distributions,” until the
aggregate amount of Carry Distributions equals 20% of the excess of (A) the
aggregate amount of Return Distributions and Carry Distributions distributed
over (B) the Realized Base Contributions; and
	 
	 	(iii)	 	Thereafter, between the General Partner and the
Carried Interest Partners as follows:

	 	(A)	 	The General Partner is allocated an additional
amount (as additional Return Distributions) so that the aggregate
amount of Return Distributions distributed to the General Partner
equals the sum of (1) the Realized Base Contributions plus (2)
80% of the amount by which the aggregate Investment Proceeds received
by the Partnership exceeds the Realized Base Contributions; and
	 
	 	(B)	 	The remainder to the Carried Interest Partners
as additional Carry Distributions.

-8-

 

     (b) Current Proceeds. Distributions designated as Current Proceeds by the General Partner
shall be distributed in the same manner as Capital Proceeds and Sponsor Proceeds pursuant to
Section 4.3(a) except that for purposes of applying those provisions with respect to a
particular distribution of Current Proceeds, the Program Asset giving rise to such Current Proceeds
will be deemed to have been Realized for an amount equal to the Invested Capital (and taking into
account any prior unreversed Impairment with respect to such Program Asset) attributable to such
Program Asset immediately prior to the distribution of such Current Proceeds.

4.4 Apportionment of Carry Distributions

     Carry Distributions will be made to and among the Carried Interest Partners in the following
amounts:

     (a) Distributions to the Sponsor Partner. The Sponsor Partner shall in all cases receive 35%
of all Carry Distributions.

     (b) Distributions to the IP Limited Partners. The IP Limited Partners as a group shall receive
a portion of Carry Distributions, which portion shall not exceed the aggregate Carry Percentages of
the IP Limited Partners, but which may be reduced by the vesting and other provisions in
Appendix B hereto. The provisions of Appendix B will govern the determination of
each IP Limited Partner’s share of such Carry Distributions.

     (c) Distributions to the Residual Limited Partner. Carry Distributions not made to the
Sponsor Partner or the IP Limited Partners shall be made to the Residual Limited Partner. For the
avoidance of doubt, any reductions in Carry Distributions to the IP Limited Partners pursuant to
the vesting provisions set forth in Appendix B hereto shall accrue to the benefit of the
Residual Partner.

4.5 IP Clawback Reserve

     (a) Notwithstanding the provisions of Section 4.3 and Section 4.4 and Appendix B hereto, 25%
(adjusted as provided in Section 4.5(b) below) of any Carry Distributions that are available for
distribution to an IP Limited Partner shall be withheld by the Partnership, and a separate
bookkeeping account (an “IP Clawback Reserve”) shall be established for such IP Limited Partner by
the Partnership for tracking deposits, withdrawals, and interest earned with respect to such
account. The Partnership may aggregate each of the IP Clawback Reserves within a single
interest-bearing Partnership bank account.

     (b) Each time that the Partnership is to make a distribution of Carry Distributions,
the General Partner (together with the general partners of each of the other Program Partnerships)
will review the remaining Program Assets and the assets within each other Program Partnership in
the Platform to determine whether any of the cumulative assets have suffered an Impairment that has
not been reversed, and if so, the effect that such Impairment would have on the ability of
Woodbridge (in its capacity as an investor in such program partnership) to receive proceeds from
such Program Partnership sufficient to provide Woodbridge with at least a 10% annual cumulative
compounded internal rate of return on its Invested Capital (as defined by the governing agreement
of such Program Partnership) in such Program Partnership. If the General Partner determines that
the Impairment would prevent such minimum return from being achieved, the General Partner may
increase the percentage (but not in excess of 100%) of Carry Distributions to be contributed to the
IP Clawback Reserve of any Executive IP Partner (as defined below) in order to add to such IP
Clawback Reserve an amount which, when combined with the other reserves being established by the
other Program Partnerships and by Woodbridge Executive Incentive Plan 1, LP with respect to such
Executive IP Partner, will cover such Executive IP Partner’s share of the Overall Hurdle
Clawback that is anticipated to arise.

-9-

 

	 	(i)	 	     “Executive IP Partner” shall mean any person who is both an IP Limited
Partner and a limited partner of Woodbridge Executive Incentive Plan 1, LP.
	 
	 	(ii)	 	     For the avoidance of doubt, the General Partner shall not increase the
percentage of Carry Distributions to be contributed to the IP Clawback Reserve
of any IP Limited Partner who is not an Executive IP Partner.

     (c) Notwithstanding the foregoing, in the General Partner’s discretion, rather than
depositing amounts in the IP Clawback Reserve for an IP Limited Partner, the General Partner may
cause such amounts to be distributed to the General Partner as additional Return Distributions,
which will be credited to a special bookkeeping account (an “Alternative Clawback Reserve”) for the
benefit of such IP Limited Partner. The balance in the Alternative Clawback Reserve shall be
increased from time to time by an interest factor equal to the interest earned on the IP Clawback
Reserve (or, if there is no IP Clawback Reserve, on the rate of interest that the Partnership would
receive on an interest-bearing bank account).

     (d) As set forth in Section 4.6, at the expiration of the Term of the
Partnership, each IP Limited Partner will be responsible for a share of the Gross Clawback Amount,
if any.

	 	(i)	 	     To satisfy an IP Limited Partner’s share, amounts will first
be taken from such IP Limited Partner’s Alternative Clawback Reserve. To the
extent that such IP Limited Partner’s share is not satisfied, amounts will be
taken from such IP Limited Partner’s IP Clawback Reserve.
	 
	 	(ii)	 	     (A) To the extent amounts in the Alternative Clawback
Reserve are not needed to satisfy the share of an IP Limited Partner who is
not an Executive IP Partner of the Gross Clawback Amount, an amount of Return
Distributions that would otherwise be payable to the General Partner or Carry
Distributions otherwise payable to the Sponsor Partner equal to such excess,
shall instead be specially distributed to the applicable IP Limited Partner
without regard to Section 4.3, which distributions will reduce on a
dollar-for-dollar basis the amount in such IP Limited Partner’s Alternative
Clawback Reserve. If the full amount of such excess cannot be so distributed,
the shortfall shall be contributed by the General Partner to the Partnership
for special distribution to the applicable IP Limited Partner.
	 
	 	(iii)	 	     (B) To the extent amounts in the Alternative Clawback Reserve are not
needed to satisfy the share of an Executive IP Partner of the Gross Clawback
Amount, such excess amounts will be added to the Alternative Clawback Reserve
established for the benefit of such Executive IP Partner by Woodbridge
Executive Incentive Plan 1, LP.
	 
	 	(iv)	 	     (A) For any IP Limited Partner who is not an Executive IP Partner, to
the extent amounts in such IP Limited Partner’s IP Clawback Reserve (including
interest earned thereon) are not needed to fund such IP Limited Partner’s
share of the Gross Clawback Amount, such amounts will be released by the
Partnership to the applicable IP Limited Partner.
	 
	 	 	 	     (B) For any Executive IP Partner, to the extent amounts in such Executive
IP Partner’s IP Clawback Reserve (including interest earned thereon) are
not needed to fund such Executive IP Partner’s share of the Gross Clawback
Amount, such amounts will be added to the Clawback Reserve established for
the benefit of such Executive IP Partner by Woodbridge Executive Incentive
Plan 1, LP.

     (e) Prior to the expiration of the Term of the Partnership, the General Partner, in
its discretion, may release reserved amounts to an IP Limited Partner who is not an Executive IP
Partner by (i) causing special distributions reducing such IP Limited Partner’s Alternative
Clawback Reserve or causing contributions and special distributions, each as described in Section
4.5(d) above, or (ii) distributing amounts to an IP Limited Partner from such IP Limited Partner’s
IP Clawback Reserve, in either case to the extent the General Partner determines that such released
amounts are not necessary to secure such IP Limited Partner’s share of the Gross Clawback Amount,
each as described in Section 4.6. Similarly the General Partner may, in its discretion, move
amounts to the Alternative Clawback Reserve or the Clawback Reserve of an Executive IP
Partner established for the benefit of such Executive IP Partner by Woodbridge
Executive Incentive Plan 1, LP.

4.6 Clawback Obligations

     (a) Following the final liquidating distribution of assets pursuant to Section 8.2, if
there have been any Carry Distributions, the General Partner shall determine the additional amount
of Return Distributions (the “Gross Clawback Amount”), if any, that would need to have been
distributed to the General Partner in connection with such final liquidating distribution so that
each of the following would have been true:

	 	(i)	 	The General Partner would have received sufficient Return
Distributions to provide it with at least the Preferred Return on the General
Partner’s Invested Capital, as calculated pursuant to Section
4.3(a)(i); and

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	 	(ii)	 	The General Partner would have received Return Distributions at
least equal to the amount of its Invested Capital plus 80% of the amount by
which the aggregate Investment Proceeds received by the Partnership exceeded
the General Partner’s Invested Capital.

     (b) Each Carried Interest Partner shall be responsible for returning to the Partnership, for
distribution to the General Partner, its share of the Gross Clawback Amount, determined as follows:

	 	(i)	 	The Sponsor Partner shall be responsible for its Carry
Percentage (i.e., 35%);
	 
	 	(ii)	 	The IP Limited Partners as a group shall be responsible for
their aggregate Carry Percentage of the Gross Clawback Amount, with each such
IP Limited Partner being severally (and not jointly) responsible for the amount
determined pursuant to Appendix B hereto and only to the extent of
clause (c) below; and
	 
	 	(iii)	 	The Residual Limited Partner shall be responsible for its
Carry Percentage of the Gross Clawback Amount;

provided that if Carry Percentages have changed over the Term of the Partnership, the
determination shall be based on the relative amounts of Carry Distributions received over the Term
of the Partnership or any other method determined by the General Partner to appropriately take into
account such variations.

     (c) In no event will an IP Limited Partner be personally liable for a clawback obligation that
exceeds the aggregate amount of such IP Limited Partner’s Alternative Clawback Reserve and IP
Clawback Reserve. In no event shall an IP Limited Partner be responsible for another Partner’s
share of the Gross Clawback Amount.

     (d) The Residual Limited Partner’s obligation to satisfy its clawback obligation will be
limited to those amounts established as a clawback reserve under the terms of the limited
partnership agreement governing the Residual Limited Partner and will be a several (and not joint)
obligation of the partners in the Residual Limited Partner.

ARTICLE V

PROGRAM MANAGER

5.1 Program Manager

     The Program Manager will be responsible for managing the day-to-day activities of the
Partnership and the Partnership’s assets, subject to the direction of the General Partner;
provided that the Program Manager will have no authority to legally bind the Partnership
without the express consent of the General Partner.

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5.2 Fees

     The Program Manager shall not be entitled to any fees, payments, or distributions other than
as expressly provided herein, or as otherwise approved by the General Partner. To the extent the
Program Manager or any employee or agent (in such capacity) of the Program Manager receives any
Deal Fees with respect to a Program Asset, the calculations called for in this Agreement will be
adjusted so that total amounts received by the Program Manager or such employee or agent (in such
capacity) of the Program Manager are the same as if all such Deal Fees had been paid to the
Partnership.

ARTICLE VI

GENERAL PARTNER

6.1 Management Authority

     (a) The management of the Partnership shall be vested exclusively in the General Partner, and
the General Partner shall have full control over the business and affairs of the Partnership. The
General Partner shall have the power on behalf and in the name of the Partnership to carry out any
and all of the objectives and purposes of the Partnership and to perform all acts and enter into
and perform all contracts and other undertakings which the General Partner, in its reasonable
discretion, deems necessary or advisable or incidental thereto, including the power to acquire and
dispose of any security (including marketable securities) or incur indebtedness or guarantee the
indebtedness of the Portfolio Company.

     (b) Third parties dealing with the Partnership can rely conclusively upon the General
Partner’s certification that it is acting on behalf of the Partnership and that its acts are
authorized. The General Partner’s execution of any agreement on behalf of the Partnership is
sufficient to bind the Partnership for all purposes.

     (c) The General Partner will have the right and power to establish the availability and terms
of any offering of opportunities for an IP Limited Partner or any Family Related Partner or any
other “friend or family member” of an IP Limited Partner to co-invest alongside the Partnership in
all or part of the Partnership’s investments.

6.2 No Liability to Partnership or Limited Partners

     No Covered Party shall be liable to the Partnership or any Partner for any action taken, or
failure to act, on behalf of the Partnership (or on behalf of the General Partner or the Program
Manager with respect to the Partnership) if such Covered Party (a) acted honestly and in good faith
with a view to the best interests of the Partnership, or, as the case may be, to the best interests
of the other entity for which the Covered Party acted as director, officer, employee, agent, or in
a similar capacity at the request of the General Partner or the Program Manager for the benefit of
the Partnership; and (b) in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, the Covered Party had reasonable grounds for believing that the
Covered Party’s conduct was lawful. In addition, any Covered Party who has delegated to any other
Person (other than to another Covered Party) any part of its functions
(including participating in the management of or

-12-

 

rendering professional advice or other
services in respect of any Program Asset) shall not be liable, responsible, or accountable in
damages or otherwise to the Partnership or to any Partner for any loss incurred or suffered by
reason of any action by such other Person unless the delegating Covered Party did not (x) act
honestly and in good faith with a view to the best interests of the Partnership, or, as the case
may be, to the best interests of the other entity for which the Covered Party acted as director,
officer, employee, agent, or in a similar capacity at the request of the General Partner or the
Program Manager for the benefit of the Partnership; and (y) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, have reasonable grounds
for believing that the Covered Party’s conduct was lawful with respect to such delegation. For the
avoidance of doubt, nothing in the immediately preceding sentence shall be deemed to prevent the
Partnership, the General Partner or the Program Manager from asserting a cause of action against
the delegate of a Covered Party for any loss caused by the action, or failure to act, of such
delegate and the General Partner shall cause the Partnership to effectively pursue any such cause
of action to the extent it would be in the reasonable best interests of the Partnership to do so.

6.3 Indemnification

     (a) Subject to Section 6.3(c), the Partnership shall indemnify each Covered Party
against all costs, charges, and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by the Covered Party in respect of any civil, criminal,
administrative, investigative, or other proceeding in which the Covered Party is involved because
of such Covered Party’s association with the Partnership, the General Partner, or the Program
Manager if such Covered Party (i) acted honestly and in good faith with a view to the best
interests of the Partnership or, as the case may be, to the best interests of the other entity for
which the Covered Party acted as director, officer, employee, agent, or in a similar capacity at
the request of the General Partner or the Program Manager and for the benefit of the Partnership;
and (ii) had reasonable grounds for believing that such Covered Party’s conduct was lawful, in the
case of a criminal or administrative action or proceeding that is enforced by a monetary penalty.

     (b) Subject to Section 6.3(c), the Partnership shall advance moneys to a Covered Party
for the costs, charges, and expenses of a proceeding referred to in Section 6.3(a). The
Covered Party shall repay the moneys if the Covered Party does not fulfill the conditions of
Section 6.3(a).

     (c) Before seeking indemnification from the Partnership, a Covered Party seeking such
indemnification shall use all reasonable efforts to seek indemnification from the following sources
(in the following order of priority): first, from the Portfolio Company, including any insurance
provided by, or purchased on behalf of a Covered Party by, the Portfolio Company; and second, from
the General Partner or the Program Manager, including from any insurance provided by the General
Partner or the Program Manager. To the extent any unpaid indemnification obligation remains after
the Covered Party has received indemnification from the foregoing sources, the Partnership shall
indemnify such Covered Party for such shortfall.

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ARTICLE VII

LIMITED PARTNERS

7.1 Limited Liability

     No Limited Partner shall be personally liable for any obligations of the Partnership or have
any obligation to make contributions to the Partnership other than such Limited Partner’s initial
contribution pursuant to Section 3.1 or as required pursuant to Section 4.6 or
Section 7.6; provided that a Limited Partner shall be required to return any
distribution made to it in error. To the extent any Limited Partner is required by the Partnership
Act to return to the Partnership any distributions made to it and does so, such Limited Partner
shall have a right of contribution from each other Limited Partner similarly liable to return
distributions made to it to the extent that such Limited Partner has returned a greater percentage
of the total distributions made to it and required to be returned by it than the percentage of the
total distributions made to such other Limited Partner and so required to be returned by it.

7.2 No Participation in Management

     The Limited Partners (in their capacity as such) shall not participate in the control,
management, direction, or operation of the affairs of the Partnership and shall have no power to
bind the Partnership.

7.3 Transfer of Limited Partnership Interests

     (a) A Limited Partner may not Transfer all or a portion of its interest in the Partnership
without the consent of the General Partner; provided that the General Partner shall not
unreasonably withhold its consent to a Transfer by an IP Limited Partner to a Family Related
Partner of such IP Limited Partner.

     (b) Unless and until the General Partner consents to the admission of a transferee as a
substituted Limited Partner in accordance with this Section 7.3, the transferor shall
remain liable for all liabilities and obligations relating to the transferred beneficial interest,
if any, and the transferee shall become an assignee of only a beneficial interest in Partnership
profits, losses and distributions of such interest. No consent of any other Limited Partner shall
be required as a condition precedent to any Transfer.

     (c) Unless the General Partner otherwise determines in its sole discretion, the transferor and
transferee of any Limited Partner’s interest shall be jointly and severally obligated to reimburse
the General Partner and the Partnership for all reasonable expenses (including attorneys’ fees and
expenses) of any Transfer or proposed Transfer of a Limited Partner’s interest, whether or not
consummated.

     (d) Any substituted Limited Partner admitted to the Partnership with the consent of the
General Partner shall succeed to all the rights and be subject to all the obligations of the
transferring or assigning Limited Partner with respect to the interest to which such Limited
Partner was substituted. The General Partner may modify Schedule I hereof to reflect such
admittance of any substituted Limited Partner. Such substituted Limited Partner shall be treated
as having received all of the allocations and distributions received by the transferring or
assigning Limited Partner, if any.

-14-

 

     (e) Any Transfer that violates this Section 7.3 shall be void and the purported buyer,
assignee, transferee, pledgee, mortgagee, or other recipient shall have no interest in or rights to
Partnership assets, profits, losses, or distributions, and neither the General Partner nor the
Partnership shall be required to recognize any such purported interest or rights.

7.4 No Termination

     Neither the substitution, death, incompetency, dissolution (whether voluntary or involuntary),
nor bankruptcy of a Limited Partner shall affect the existence of the Partnership, and the
Partnership shall continue for the Term of the Partnership until its existence is terminated as
provided herein.

7.5 Additional Limited Partners

     Additional Limited Partners will be admitted only with the consent of the General Partner on
such terms as agreed upon by the General Partner and the Person seeking admission to the
Partnership.

7.6 Reimbursement for Payments on Behalf of a Partner

     (a) If the Partnership is obligated to pay any amount to a governmental agency or body or to
any other Person (or otherwise make a payment) because of a Partner’s status or otherwise
specifically attributable to a Partner (including, without limitation, federal withholding taxes
with respect to foreign Partners, state withholding taxes, state personal property taxes, state
unincorporated business taxes, etc.) then such Partner (the “Reimbursing Partner”) shall
reimburse the Partnership in full for the entire amount paid (including, without limitation, any
interest, penalties, and expenses associated with such payment). At the election of the General
Partner, the amount to be reimbursed may be charged against the Capital Account of the Reimbursing
Partner, and the Partnership shall reduce subsequent distributions which would otherwise be made to
the Reimbursing Partner until the Partnership has recovered the amount to be reimbursed;
provided that the amount of such reduction shall be deemed to have been distributed for all
purposes of this Agreement, but such deemed distribution shall not further reduce the Reimbursing
Partner’s Capital Account.

     (b) A Partner’s obligation to reimburse the Partnership under this Section 7.6 shall
survive the termination, dissolution, liquidation, and winding-up of the Partnership, and for
purposes of this Section 7.6, the Partnership shall be treated as continuing in existence.

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ARTICLE VIII

DURATION AND TERMINATION

8.1 Term

     The Partnership shall continue until the occurrence of any of the following events: (i) the
entry of a decree of judicial dissolution under the Act or (ii) an election by the General Partner
to dissolve the Partnership.

8.2 Termination and Liquidation

     (a) The Partnership shall not terminate immediately upon the expiration of its Term under
Section 8.1, but shall cease to engage in further business except to the extent necessary
to promptly wind-up its affairs, perform existing contracts, and preserve the value of the Program
Assets.

     (b) During the course of winding-up the Partnership all of the provisions of this Agreement
shall continue to bind the parties and apply to the activities of the Partnership except as
specifically provided to the contrary, but there shall be no distributions to the Partners except
as provided in this Section 8.2.

     (c) Upon the expiration of the Partnership’s Term, the General Partner shall take such actions
as it may think fit for winding-up the Partnership and liquidating the Program Assets, including:

	 	(i)	 	The filing of all certificates and notices of dissolution as
are required by applicable law; and
	 
	 	(ii)	 	The Realization of any Program Asset (unless the General
Partner intends to distribute such Program Asset in kind); provided
that all such Realizations shall be conducted in an orderly and businesslike
manner so as not to involve undue sacrifice.

The General Partner in taking such actions may exercise and shall have the benefit of all rights,
powers, and discretions vested in the General Partner pursuant to the provisions of this Agreement.
If the General Partner is not able to act as the liquidator of the Partnership or exercise the
powers inherent thereto, a liquidator shall be appointed by the Residual Limited Partner.

     (d) Upon dissolution of the Partnership, all Partnership assets shall be distributed or used
as follows and in the following order of priority:

	 	(i)	 	For the payment of the debts and liabilities of the
Partnership, including, without limitation, the expenses of liquidation.
	 
	 	(ii)	 	For the setting up of any reserves which the General Partner
may deem reasonably necessary for any liabilities or obligations of the
Partnership.

-16-

 

	 	(iii)	 	To the Partners in accordance with the provisions of
Article IV.

     (e) The Partnership shall be terminated only after the Partnership assets have been
distributed as provided in this Section 8.2.

ARTICLE IX

VALUATION OF PARTNERSHIP ASSETS

9.1 Normal Valuation

     For purposes of this Agreement, the value of any asset as of any date (or in the event such
date is a holiday or other day which is not a business day, as of the immediately preceding
business day) shall be valued by the General Partner in good faith using methods it considers
appropriate.

9.2 Restrictions on Transfer or Blockage

     Any security which is held under a representation that it has been acquired for investment
purposes and not with a view to public sale or distribution, or which is held subject to any other
restriction on transfer, or where the size of the Partnership’s holdings compared to the trading
volume would adversely affect the marketability of such security, shall be valued at such discount
as the Program Manager deems reasonably necessary to reflect the marketability and value of such
security.

ARTICLE X

BOOKS OF ACCOUNTS; MEETINGS

10.1 Books

     The Partnership shall maintain complete and accurate books of accounts of the Partnership’s
affairs at the Partnership’s principal office.

10.2 Fiscal Year

     The fiscal year and taxable year of the Partnership shall be the calendar year, unless
otherwise determined by the General Partner.

10.3 Reports

     The General Partner shall furnish to each Partner the following information and reports
prepared in accordance with U.S. generally accepted accounting principles (“GAAP”):

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     (a) As soon as practicable after the end of each fiscal year commencing with the first year in
which the Partnership is in operation for a full fiscal year, (i) financial statements for the
Partnership for such year (audited by a firm of independent certified public accountants of
recognized national standing selected by the General Partner), and (ii) a statement of each
Partner’s closing Capital Account balance as of the end of such year; and

     (b) As soon as practicable after the end of each fiscal year, the Partnership’s United States
federal income tax return, including such Partner’s Schedule K-1 for such fiscal year.

ARTICLE XI

MISCELLANEOUS

11.1 Amendments

     This Agreement may be amended by the written consent of the General Partner, provided
that if such amendment would adversely affect any Carried Interest Partner, then the Carried
Interest Partner so affected must consent to such amendment. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended by the General Partner without the consent
of any other Partner in order to cure any ambiguity or error, make an inconsequential revision,
provide clarity, comply with any law or regulation or correct or supplement any provision herein
which may be defective or inconsistent with any other provisions herein; provided that,
except with respect to amendments necessary to comply with any law or regulation, such amendment
does not materially and adversely affect any Limited Partner.

11.2 Successors

     Except as otherwise provided herein, this Agreement shall inure to the benefit of and be
binding upon the Partners and their legal representatives, heirs, successors, and assigns.

11.3 Governing Law; Severability

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Florida, and, to the maximum extent possible, in such manner as to comply with all the terms and
conditions of the Partnership Act. If it is determined by a court of competent jurisdiction that
any provision of this Agreement is invalid under applicable law, such provision shall be
ineffective only in such jurisdiction and only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.

11.4 Notices

     All notices, demands, and other communications to be given and delivered under or by reason of
provisions under this Agreement shall be in writing and shall be deemed to have been given on the
date when personally delivered, when mailed by first class mail, when sent by facsimile or
transmitted by email or the internet, or when sent by reputable overnight courier service, in each
case to the recipient at the address, facsimile number or email address set forth in Schedule
I hereof or to such other address, facsimile number, or email address, or to the attention of
such other Person as has been indicated in writing to the General Partner.

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11.5 Arbitration

     The parties to this Agreement shall each use good faith efforts for a period of 30 days (or
such longer time as agreed to by the applicable parties) to try to resolve any controversy,
dispute, or claim arising out of or in connection with this Agreement, or the breach, termination
or validity hereof. Thereafter, if such controversy, dispute, or claim remains, it shall be
settled by final and binding arbitration to be conducted by an arbitration tribunal in Fort
Lauderdale, Florida, pursuant to the rules of the American Arbitration Association. The
arbitration tribunal shall consist of three arbitrators. The party initiating the controversy,
dispute, or claim that led to arbitration shall nominate one arbitrator in the request for
arbitration and the other party shall nominate a second arbitrator in the answer thereto within 30
days of receipt of the request; provided that if there are multiple initiating or answering
parties, the arbitrator selected must be reasonably acceptable to all initiating or answering
parties, as applicable. The two arbitrators so named will then jointly appoint the third
arbitrator. If the answering party fails to nominate its arbitrator within the 30-day period, or
if the arbitrators named by the parties fail to agree on the third arbitrator within 60 days, the
office of the American Arbitration Association in New York, New York shall make the necessary
appointments of such arbitrator(s). The decision or award of the arbitration tribunal (by a
majority determination, or if there is no majority, then by the determination of the third
arbitrator, if any) shall be final, and judgment upon such decision or award may be entered in any
competent court or application may be made to any competent court for judicial acceptance of such
decision or award and an order of enforcement. In the event of any procedural matter not covered
by the aforesaid rules, the procedural law of the State of Florida shall govern.

11.6 Miscellaneous

     This Agreement (including the Appendices hereto) contains the entire agreement among the
parties and supersedes all prior arrangements or understanding with respect thereto. Descriptive
headings are for convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement. This Agreement may be executed in any number of counterparts, any
one of which need not contain the signatures of more than one party, but all of such counterparts
together shall constitute one agreement. Whenever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and the plural, and
pronouns stated in either the masculine, the feminine or the neuter gender shall include the
masculine, the feminine, and the neuter.

11.7 No Third Party Beneficiaries

     No Person that is not a party hereto shall have any rights or obligations pursuant to this
Agreement. The rights and obligations set forth herein are for the benefit of the parties hereto
only and do not create or grant any rights to third parties.

-19-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	GENERAL PARTNER:

SPONSOR PARTNER:

BLUEGREEN PROGRAM GP, LLC

 	 
	 	By:  	WOODBRIDGE FUND I, LLC,
its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                WOODBRIDGE HOLDINGS CORPORATION,
its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	RESIDUAL LIMITED PARTNER:

WOODBRIDGE EXECUTIVE INCENTIVE PLAN 1, LP

 	 
	 	By:  	WOODBRIDGE FUND I, LLC,
its General Partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                WOODBRIDGE HOLDINGS CORPORATION,
its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 

 -20- 

 

	 	 	 	 	 

	 	 	 	 	 
	 	IP LIMITED PARTNERS:

 	 
	 	/s/ Alan B. Levan
 	 
	 	Alan B. Levan 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ John E. Abdo
 	 
	 	John E. Abdo 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ Seth M. Wise
 	 
	 	Seth M. Wise 	 
	 	 	 

 -21- 

 

	 	 	 	 	 

	 	 	 	 	 
	 	PROGRAM MANAGER:

WOODBRIDGE FUND I, LLC

 	 
	 	By:  	WOODBRIDGE HOLDINGS CORPORATION,

its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 

 -22- 

 

	 	 	 	 	 

Schedule I

Bluegreen Program Partnership, LP

List of Carried Interest Partners and Applicable Carry Percentages

	 	 	 	 	 
	Carried
Interest Partner	 	Carry Percentage	 
	 
	 	 	 	 
	Sponsor Partner
	 	 	35.0	%
	 
	 	 	 	 
	IP Limited Partners (divided as listed below)
	 	 	32.5	%
	 
	 	 	 	 
	Alan Levan
	 	 	38.25%	 
	 
	 	 	 	 
	Jack Abdo
	 	 	38.25%	 
	 
	 	 	 	 
	Seth Wise
	 	 	23.50%	 
	 
	 	 	 	 
	Residual Limited Partner
	 	 	32.5	%
	 
	 	 	 	 
	 
	TOTAL
	 	 	100.0	%

 

 

Schedule II

Program Expenses

	 	 	 	 	 	 
	 
	 	Amounts Included in Program Expenses	 	 	Amounts Excluded from Program Expenses	 
	 	Salaries and bonuses

Salary for any investment professionals
of the Program Manager, except in the
case where Woodbridge Holdings executives
are the investment professionals.
Salaries and cash bonus of direct
dedicated staff members.

	 	 	Salaries and bonuses

Woodbridge Holdings incentive stock
options or stock grants to any investment
professional or dedicated staff member as
part of a Woodbridge Holdings-wide
incentive compensation program.	 
	 	Direct Expenses

Direct dedicated expenses incurred
directly by the Program Manager,
including rent, facilities charges,
equipment and supplies, except in the
case where Woodbridge Holdings executives
are the investment professionals.

Outside legal and accounting expenses
incurred for services rendered with
respect to the Program Manager or the Partnership, including formation
costs, and tax return preparation.

Unreimbursed costs of transactions, including due diligence
expenses and the carrying costs of
deposits, to the extent the transaction that generated the cost does
not close.

Travel expenses neither capitalized as
part of the acquisition of a completed
transaction nor borne by the target
company.

Standard charges by internal Woodbridge
Holdings personnel for provision of
back-office support services directly
related to the program or Program Assets
(i.e., providing the accounting services
for the Partnership, providing
human resources services for the
Partnership).

	 	 	Direct Expenses

Time of Investment Committee in
evaluating investment recommendations.	 
	 

 

 

	 	 	 	 	 	 
	 
	 	Amounts Included in Program Expenses	 	 	Amounts Excluded from Program Expenses	 
	 	Standard charges by BFC Shared Services
for back-office support services directly
related to the program or Program Assets.
Interest on borrowings of the Program
Manager, including any that accrued at
the rate of 12% compounded per annum on
amounts received through a pre-approved
line of credit from Woodbridge
Overhead Funding, LLC. For purposes of
this provision, all amounts of funds
provided to the Program Manager shall be
treated as borrowings and shall accrue
12% interest regardless of whether such
funds were provided in the form of loans,
equity capital, or otherwise.
	 	 	 	 
	 	Allocation of Woodbridge
Holdings Overhead

None.

	 	 	Allocation of Woodbridge Holdings Overhead

General corporate overhead (i.e., public
company costs, office expenses for
non-dedicated staff, investor relations
and accounting staff not dedicated,
analytical staff providing analytics to
Woodbridge Holdings, management for
oversight of programs and Program
Assets).

Any other overhead expenses not expressly
included on this Schedule II as Program
Expenses.	 
	 

 

 

APPENDIX A: 

Tax and Accounting Provisions

A-1 Definitions

     For purposes of this Appendix A, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit
balance, if any, in such Partner’s Capital Account, as of a specified time, after giving effect to
the following adjustments:

     (a) credit to such Partner’s Capital Account any amounts that such Partner is obligated to
restore or deemed obligated to restore pursuant to Treasury Regulations Section
1.704-1(b)(2)(ii)(c) and the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1)
and Treasury Regulations Section 1.704-2(i)(5); and

     (b) debit to such Partner’s Capital Account the items described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     “Book Value” means, with respect to any asset, the asset’s adjusted basis for U.S.
federal income tax purposes, except as follows:

     (a) the initial Book Value of any asset that is not Contributed Property as defined in the
Agreement but is otherwise contributed or deemed contributed to the Partnership shall be such
asset’s gross fair market value at the time of such contribution as determined by the General
Partner pursuant to Article IX of the Agreement;

     (b) the initial Book Value of any asset that is Contributed Property as defined in Section
3.1(a) of the Agreement shall be the value set forth in Section 3.1(a) of the
Agreement;

     (c) the Book Value of all Partnership assets may be adjusted in the discretion of the General
Partner to equal their respective gross fair market values, as determined by the General Partner
pursuant to Article IX of the Agreement, at the times specified in Treasury Regulations
Section 1.704-1(b)(2)(iv)(f);

     (d) any adjustments to the adjusted basis of any asset of the Partnership pursuant to Section
734 or Section 743 of the Code shall be taken into account in determining such asset’s Book Value
in a manner consistent with Treasury Regulations Section 1.704-1(b)(2)(iv)(m);

     (e) the Book Value of any Partnership asset distributed or deemed distributed by the
Partnership to any Partner shall be adjusted immediately prior to such distribution to equal its
gross fair market value as of the date of distribution, as determined by the General Partner
pursuant to Article IX of the Agreement; and

A-1

 

     (f) if the Book Value of an asset has been determined pursuant to clauses (a),
(c) or (d) of this definition, to the extent permitted by the Treasury Regulations,
such Book Value shall thereafter be adjusted in the same manner as would the asset’s adjusted basis
for U.S. federal income tax purposes, except that depreciation and amortization deductions shall be
computed based on the asset’s Book Value as so determined, rather than on its adjusted tax basis.

     “Net Profits” and “Net Losses” mean, for any period, the taxable income or
loss, respectively, of the Partnership for such period, in each case as determined for U.S. federal
income tax purposes, but computed with the following adjustments:

     (a) items of income, gain, loss and deduction (including, without limitation, gain or loss on
the disposition of any Partnership asset and depreciation or other cost recovery deduction or
expense) shall be computed based upon the Book Value of the Partnership’s assets rather than upon
such assets’ adjusted bases for U.S. federal income tax purposes;

     (b) any tax-exempt income received by the Partnership shall be deemed for these purposes only
to be an item of gross income;

     (c) any expenditure of the Partnership described in Section 705(a)(2)(B) of the Code (or
treated as described therein pursuant to Treasury Regulations under Section 704(b) of the Code)
shall be treated as a deductible expense;

     (d) there shall be taken into account any separately stated items under Section 702(a) of the
Code;

     (e) if the Book Value of any Partnership asset is adjusted pursuant to clauses (c) or
(e) of the definition of “Book Value” above, or pursuant to clause (d) of such
definition (but only to the extent the adjustment is attributable to a distribution of Investment
Proceeds not in liquidation of a Partner’s Partnership interest), the amount of such adjustment
shall be taken into account in the period of adjustment as gain or loss from the disposition or
deemed disposition of such asset for purposes of computing Net Profits and Net Losses; and

     (f) items of income, gain, loss, deduction or credit allocated pursuant to Section A-6
of this Appendix A shall not be taken into account.

     “Tax Matters Partner” has the meaning set forth in Section A-6.

A-2 Maintenance of Capital Accounts

     (a) A Capital Account shall be maintained for each Partner in accordance with Section 704(b)
of the Code and Treasury Regulations Sections 1.704-1(b) and 1.704-2. The initial balance of each
Capital Account shall be equal to such Partner’s initial capital contribution to the Partnership.

A-2

 

     (b) The Capital Account of each Partner shall be increased by (i) the amount of any cash
contributed by such Partner to the capital of the Partnership, (ii) in the case of any property
contributed by such Partner to the capital of the Partnership, the Book Value of such property (net
of liabilities that the Partnership is considered to assume or take the property subject to) when
contributed, (iii) the amount of any liabilities of the Partnership that are assumed by such
Partner (except for liabilities described in Section A-2(c)(ii) of this Appendix A
that are assumed by such Partner) for purposes of Treasury Regulations Section
1.704-1(b)(2)(iv)(c), (iv) the Net Profits allocated to such Partner, and (v) any gross income and
gain allocated to such Partner.

     (c) The Capital Account of each Partner shall be decreased by (i) the amount of any cash
distribution to such Partner when made, (ii) the Book Value of any property distributed to such
Partner by the Partnership (net of liabilities that the Partner is considered to assume, or take
property subject to) when distributed, (iii) the amount of any liabilities of such Partner that are
assumed by the Partnership (except for liabilities described in Section A-2(b)(ii) of this
Appendix A that are assumed by the Partnership) for purposes of Treasury Regulations
Section 1.704-1(b)(2)(iv)(c), (iv) the Net Losses allocated to such Partner, and (v) any gross
deductions and loss allocated to such Partner.

     (d) In the event that all or a portion of an interest in the Partnership is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent such Capital Account relates to the Transferred Partnership interest.

     (e) The Capital Account of each Partner shall be adjusted to reflect any adjustment to the
Book Value of the Partnership’s assets attributable to the application of Section 734 of the Code
in respect of a distribution in liquidation of such Partner’s Partnership interest to the extent
required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

     (f) It is the intention of the parties that the Capital Accounts of the Partners be kept in
the manner required under Section 704(b) of the Code and Treasury Regulations Sections 1.704-1(b)
and 1.704-2. To the extent any additional adjustment to the Capital Accounts is required by such
provisions, the General Partner is hereby authorized to make such adjustment after notice to the
Partners.

     (g) Except as expressly required herein, no Partner shall be required to restore any negative
balance in its Capital Account. No allocation to any Partner of any loss or deduction, whether
attributable to depreciation or otherwise, shall create any obligation of that Partner to the
Partnership or any other Partner, even if the allocation reduces such Partner’s Capital Account or
creates or increases a deficit in its Capital Account.

A-3

 

A-3 Allocations of Profits and Losses

     (a) After the application of Section A-4, Net Profits and Net Losses for any taxable
year, or portion thereof, shall be allocated among the Partners (and credited or debited to their
Capital Accounts) in such manner so that, after taking into account distributions by the
Partnership and contributions made to the Partnership through the end of such taxable year and the
allocations of Net Profits and Net Losses for such taxable year, (i) the respective positive
Capital Account balances of the Partners would correspond as closely as possible to the amount
each Partner would receive as a cash distribution pursuant to Article IV of the Agreement,
if the Partnership were to liquidate completely immediately after the end of such taxable year and
(ii) any resulting deficit Capital Account balances of the Partners would correspond as closely as
possible with the manner in which economic responsibility for Partnership deficit balances (as
determined in accordance with the principles of Treasury Regulations under Section 704 of the Code)
would be borne by the Partners under the terms of this Agreement if the Partnership were to
liquidate completely immediately after the end of such taxable year. For purposes of the preceding
sentence, the amount of cash to be distributed to each Partner, the amount of each Partner’s
Capital Account and the amount of each Partner’s economic responsibility for Partnership deficit
balances, upon the assumed liquidation, shall be computed by assuming that in connection with such
liquidation, the Partnership sold all of its assets for amounts such that no Net Profits or Net
Losses result from the sale and settled all of its liabilities for amounts such that no Net Profits
or Net Losses result from the settlement. For purposes of applying this Section A-3, the
Capital Account balance of each Partner shall be increased by such Partner’s share of “partnership
minimum gain” and “partner minimum gain” (within the meaning of and in accordance with the Treasury
Regulations under Section 704(b) of the Code). Subject to the other provisions of this
Appendix A, an allocation to a Partner of a share of Net Profit or Net Loss shall be
treated as an allocation of the same share of each item of income, gain, loss or deduction that is
taken into account in computing Net Profit or Net Loss.

     (b) If a Partner Transfers, acquires, or redeems an interest in the Partnership during a
taxable year, the Net Profit or Net Loss (and other items referred to in Section A-4 of
this Appendix A) attributable to such interest for such year shall be allocated between the
transferring Partner and the transferee (or the other Partners in the Partnership) by any method
permitted under Section 706 of the Code as selected by the General Partner.

A-4 Regulatory Allocations and Special Allocations

     (a) Notwithstanding any other provision of the Agreement or this Appendix A, (i)
“partner nonrecourse deductions” (as defined in Treasury Regulations Section 1.704-2(i)), if any,
of the Partnership shall be allocated for each period to the Partner that bears the economic risk
of loss within the meaning of Treasury Regulations Section 1.704-2(i), and (ii) “nonrecourse
deductions” (as defined in Treasury Regulations Section 1.704-2(b)) and “excess nonrecourse
liabilities” (as defined in Treasury Regulations Section 1.752-3(a)), if any, of the Partnership
shall be allocated to the Partners in accordance with their respective percentage interests in Net
Losses.

     (b) The Agreement and this Appendix A shall be deemed to include “qualified income
offset,” “minimum gain chargeback” and “partner nonrecourse debt minimum gain chargeback”
provisions within the meaning of Treasury Regulations under Section 704(b) of the Code.
Accordingly, notwithstanding any other provision of this Agreement or this Appendix A,
items of gross income shall be allocated to the Partners on a priority basis to the extent and in
the manner required by such provisions.

A-4

 

     (c) To the extent that Net Losses or items of loss or deduction otherwise allocable to a
Partner hereunder would cause such Partner to have an Adjusted Capital Account Deficit as of
the end of the taxable year to which such Net Losses or items of loss or deduction relate
(after taking into account the allocation of all items of income and gain for such taxable period),
such Net Losses or items of loss or deduction shall not be allocated to such Partner and instead
shall be allocated to the Partners in accordance with Section A-3 of the Agreement as if
such Partner were not a Partner.

     (d) Any allocations required to be made pursuant to clauses (a), (b), and
(c) above (the “Regulatory Allocations”) (other than allocations, the effect of
which are likely to be offset in the future by other special allocations) shall be taken into
account, to the extent permitted by the Treasury Regulations, in computing subsequent allocations
of income, gain, loss or deduction pursuant to Section A-3 so that the net amount of any
items so allocated and all other items allocated to each Partner shall, to the extent possible, be
equal to the amount that would have been allocated to each Partner pursuant to Section A-3
had such Regulatory Allocations under this Section A-4 not occurred.

     (e) If any Partner is treated for income tax purposes as realizing ordinary income because of
receipt of its Partnership interest (whether under Section 83 of the Code or any similar provisions
of any law, rule or regulations or any other applicable law, rule, regulation or doctrine) and the
Partnership is entitled to any offsetting deduction, the Partnership’s deduction shall be allocated
among the Partners in such manner as to, as nearly as possible, offset such ordinary income
realized by such Partner.

A-5 Tax Allocations

     (a) For federal income tax purposes, except as otherwise provided in this Section A-5,
each item of income, gain, loss, and deduction and credit shall be allocated among the Partners in
the same manner as its corresponding item of book income, gain, loss, deduction or credit is
allocated pursuant to this Appendix A.

     (b) In accordance with Sections 704(b) and 704(c) of the Code and the Treasury Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership asset contributed (or
deemed contributed) to the capital of the Partnership shall, solely for federal income tax
purposes, be allocated among the Partners so as to take into account any variation between the
adjusted basis of such Partnership asset for federal income tax purposes and its Book Value upon
its contribution (or deemed contribution). If the Book Value of any Partnership asset is adjusted,
subsequent allocations of taxable income, gain, loss and deduction with respect to such Partnership
asset shall take account of any variation between the adjusted basis of such Partnership asset for
federal income tax purposes and the Book Value of such Partnership asset in the manner prescribed
under Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder. The General Partner
shall select the manner by which variations between Book Value and adjusted basis are taken into
account in accordance with Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder.

A-5

 

     (c) The provisions of this Appendix A (and other related provisions in the Agreement)
pertaining to the allocation of items of Partnership income, gain, loss, deduction, and credit
shall be interpreted consistently with the Treasury Regulations, and to the extent
unintentionally inconsistent with such Treasury Regulations, shall be deemed to be modified to
the extent necessary to make such provisions consistent with the Treasury Regulations.

A-6 Tax Matters Partner; Management Authority Regarding Tax and Accounting

     (a) The General Partner is designated the “Tax Matters Partner” (as defined in Section
6231(a)(7) of the Code) to manage administrative tax proceedings conducted at the partnership level
by the Internal Revenue Service with respect to Partnership matters. The General Partner is
specifically directed and authorized to take whatever steps the General Partner, in its sole
discretion, deems necessary or desirable to perfect such designation, including, without
limitation, filing any forms or documents with the Internal Revenue Service and taking such other
action as may from time to time be required under Treasury regulations. The Tax Matters Partner
shall have full authority to extend the statute of limitations and control any tax audit or other
proceeding on behalf of the Partnership. Expenses of administrative proceedings relating to the
determination of Partnership items at the Partnership level undertaken by the Tax Matters Partner
will be deemed to be Program Expenses.

     (b) All matters concerning (i) allocations of Net Profits and Net Losses and allocations for
tax purposes, (ii) distributions by the Partnership, including the taxes thereon, and (iii)
accounting procedures and determinations, tax determinations, determinations as to on whose behalf
expenses were incurred and the attribution of fees and expenses to a Program Asset, and other
determinations not specifically and expressly provided for by the terms of this Agreement, shall be
determined by the General Partner, whose determination shall be final and conclusive as to all the
Partners absent manifest clerical error.

     (c) At the General Partner’s sole discretion, the General Partner may cause the Partnership to
make or refrain from making any and all elections permitted by the Code and the Treasury
Regulations and any state, local, or foreign tax elections. Notwithstanding the foregoing, it is
intended that the Partnership be treated as a partnership for U.S. federal income tax purposes, and
neither the Partnership nor any Partner shall make any election inconsistent with such treatment
without the unanimous written consent of the Partners.

A-6

 

APPENDIX B: 

Apportionment and Modification of 

Carried Interest to IP Limited Partners

B-1 Definitions

     For purposes of this Appendix B, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Acquisition Date” means, with respect to a Program Asset, the date the Partnership
first made an investment in such Program Asset (or in the case of a Program Asset that is
contributed to the Partnership, the date of such contribution).

     “Allocated Reimbursement Payments” means the amount of Reimbursement Payments
allocated by the General Partner to each Program Asset. Unless the General Partner adopts another
method (with notification to each other Partner), the General Partner shall allocate the
Reimbursement Payments made with respect to a particular year to and among the Program Assets held
by the Partnership during that year based on the relative Invested Capital in such Program Assets
and adjusted (on a weighted average basis) to take into account Program Assets that are held for
less than an entire year.

     “Carry Account” has the meaning set forth in Section B-3.

     “Carry Loss” means, with respect to the Realization of any Program Asset, 20% of the
amount, if any, by which the combined Investment Proceeds and Sponsor Proceeds generated by such
Program Asset are less than the sum of the Full Return Amount and the Hurdle Return Amount of such
Program Asset. The General Partner shall use its reasonable discretion in determining the amount
of Carry Loss (including adjusting previous allocations of Carry Loss) so as to cause the amount of
Carry Loss to accurately reflect the amount by which all Carry Distributions that will ultimately
be apportioned by the Partnership with respect to all other Program Assets will be reduced, which
determination shall then be binding on the Partnership and the Partners.

     “Carry Profit” means, with respect to any particular Program Asset, the amount by
which the Investment Proceeds or Sponsor Proceeds generated by that Program Asset produce or lead
to the production of Carry Distributions, as determined by the General Partner. In general, the
Carry Profit with respect to any Program Asset will equal the sum of the following amounts:

     (a) 0% of that portion of the combined Investment Proceeds and Sponsor Proceeds from such
Program Asset as does not exceed the sum of the applicable Full Return Amount and the applicable
Hurdle Return Amount;

     (b) 80% of that portion of the combined Investment Proceeds and Sponsor Proceeds that is in
excess of the sum of the applicable Full Return Amount and the applicable Hurdle Return Amount but
that is less than the sum of the applicable Full Return Amount and 133% of the applicable Hurdle
Return Amount; and

B-1

 

     (c) to the extent in excess of the sum of clauses (a) and (b) above, (i) 20%
of that portion of the Investment Proceeds that is in excess of the sum of the applicable Full
Return Amount plus (ii) 100% of any Sponsor Proceeds.

The General Partner shall use its discretion in determining the amount of Carry Profit (including
adjusting previous allocations of Carry Profit) so as to cause the amount of Carry Profit (net of
the allocated Carry Loss) to accurately reflect the amount of Carry Distributions that will
ultimately be distributed and that are allocable to each Program Asset.

     “Cause Event” means with respect to any IP Limited Partner,

     (a) any act or omission constituting gross negligence, willful misconduct, or fraud in the
performance of such IP Limited Partner’s duties or obligations as an employee of the Program
Manager;

     (b) any action or omission that causes there to be a material breach of any applicable
management agreement to which the Program Manager is a party;

     (c) any willful refusal to perform a duty as directed by Woodbridge or any of its subsidiaries
(including the General Partner) if such duty is within the scope of such IP Limited Partner’s
duties to the Program Manager, Woodbridge or any of its subsidiaries; or

     (d) any conviction of any crime constituting a felony in the jurisdiction involved (other than
a motor vehicle felony for which only a non-custodial penalty is imposed), whether or not involving
the Program Manager or the Partnership.

     “Full Return Amount” means, with respect to a Program Asset, the sum of (i) the
aggregate Invested Capital and (ii) the Allocated Reimbursement Payments, in each case
attributable to such Program Asset.

     “Hurdle Return Amount” means, with respect to a Program Asset, as of any date of
determination, the summation of an amount calculated on a daily basis through the applicable date
of determination equal to 10% per annum, compounded annually, of (i) the aggregate Invested Capital
and the Allocated Reimbursement Payments, in each case attributable to such Program Asset,
minus (ii) the aggregate amount of all Investment Proceeds attributable to such Program
Asset on or prior to such day.

     “Tenured Asset” means, with respect to any IP Limited Partner, any Program Asset
acquired by the Partnership during the period when such Person was an IP Limited Partner (and not a
Terminated IP Limited Partner) or any other Program Asset in which such Person has been granted a
Carry Percentage by the General Partner. For the avoidance of doubt, an IP Limited Partner will
not receive a Carry Percentage with respect to any asset that is not a Tenured Asset.

B-2

 

     “Terminated IP Limited Partner” means any IP Limited Partner whose employment with the
Woodbridge Employer is terminated for any reason, whether voluntarily or involuntarily, and with or
without cause. In the General Partner’s discretion, an IP Limited Partner whose employment with
the Woodbridge Employer is terminated contemporaneously with such IP Limited Partner becoming
employed by another entity within Woodbridge shall not be treated as
having been terminated, and the new employer shall become the Woodbridge Employer for purposes
of this definition. For purposes of this Agreement, in the case of any Family Related Partner, the
termination of employment with the Woodbridge Employer of the IP Limited Partner with whom such
Family Related Partner is associated shall cause such Family Related Partner to become a Terminated
IP Limited Partner.

     “Vested Percentage” means, with respect to an IP Limited Partner and each Program
Asset, that percentage to be applied in determining the amount of Carry Profit or Carry Loss to be
allocated to any IP Limited Partner as set forth in the vesting provisions in Section B-2.

     “Woodbridge Employer” means, with respect to any IP Limited Partner, the Program
Manager if the IP Limited Partner is an employee of the Program Manager. Otherwise it means the
entity within Woodbridge that is the employer of such IP Limited Partner.

B-2 Vesting Provisions 

     (a) Non-Tenured Assets. An IP Limited Partner will have a Vested Percentage of 0% in any
Program Asset that is not a Tenured Asset with respect to such Partner.

     (b) Tenured Assets. The Vested Percentage of an IP Limited Partner with respect to a Tenured
Asset will be as follows:

	 	(i)	 	Distributions or Realizations While Employed. An IP
Limited Partner will have a Vested Percentage of 100% in all Carry Profit or
Carry Loss attributable to any Investment Proceeds or Sponsor Proceeds received
by the Partnership from such Partner’s Tenured Assets, or any other
consequences of a Realization of a Tenured Asset, if those proceeds are
received or the Realization occurs prior to the IP Limited Partner becoming a
Terminated IP Limited Partner. For the avoidance of doubt, an IP Limited
Partner shall have a Vested Percentage of 100% in any Carry Loss associated
with an unreversed Impairment that arises on or prior to an IP Limited Partner
becoming a Terminated IP Limited Partner.
	 
	 	(ii)	 	Termination for Cause. An IP Limited Partner will have
a Vested Percentage of 0% in all Carry Profit or Carry Loss attributable to any
Investment Proceeds or Sponsor Proceeds received by the Partnership from such
IP Limited Partner’s Tenured Assets, or any other consequences of a Realization
of a Tenured Asset, if those proceeds are received or the Realization occurs
after such IP Limited Partner has become a Terminated IP Limited Partner
because of the occurrence of a Cause Event with respect to such IP Limited
Partner.
	 
	 	(iii)	 	Termination Not for Cause. An IP Limited Partner will
have a Vested Percentage of 75% in all Carry Profit or Carry Loss attributable
to any Investment Proceeds or Sponsor Proceeds received by the Partnership from
such IP Limited Partner’s Tenured Assets, or any other consequences of a
Realization of a Tenured Asset, if those proceeds are received or the
Realization occurs after such IP Limited Partner has become a Terminated
IP Limited Partner because (i) the Woodbridge Employer terminated the
employment for a reason other than the occurrence of a Cause Event with
respect to such IP Limited Partner or (ii) of the death, permanent
disability or legal incapacity of such IP Limited Partner.

B-3

 

	 	(iv)	 	Voluntary Resignation. An IP Limited Partner will have
a Vested Percentage as determined pursuant to the following sentence in all
Carry Profit or Carry Loss attributable to any Investment Proceeds or Sponsor
Proceeds received by the Partnership from such IP Limited Partner’s Tenured
Assets, or any other consequences of a Realization of a Tenured Asset, if those
proceeds are received or the Realization occurs after such IP Limited Partner
has become a Terminated IP Limited Partner because the IP Limited Partner
voluntarily left the employment of the Woodbridge Employer. For purposes of
this clause (iv), the Vested Percentage shall be determined separately
for each Program Asset and shall equal: (A) 25% upon the Acquisition Date of
such Program Asset, (B) an additional 12.5 percentage points per year upon each
of the first four anniversaries of the Acquisition Date, and (C) the remainder
when the Tenured Asset is Realized.

     (c) Permitted Modifications. Notwithstanding the foregoing, the General Partner may, after
consultation with the Program Manager, modify this vesting schedule for any additional IP Limited
Partner admitted to the Partnership pursuant to Section 7.5 of the Agreement, including
granting an additional IP Limited Partner the right to have a Vested Percentage in Program Assets
whose Acquisition Date preceded the time such additional IP Limited Partner was admitted to the
Partnership.

     (d) Permitted Adjustments. As described in Section B-3(b), the General Partner, in
its discretion, is permitted to make adjustments, including retroactive adjustments, to the
allocations of Carry Profit and Carry Loss. The ability of the General Partner to make these
adjustments shall not be restricted by the application of the vesting provisions in this
Section B-2.

     (e) Family Related Partner. A Family Related Partner’s Vested Percentage shall be equivalent
to the Vested Percentage of the IP Limited Partner associated with such Family Related Partner.

B-3 Determination of Carry Accounts

     (a) Maintenance of Carry Accounts. A separate bookkeeping account (a “Carry Account”)
shall be maintained for each IP Limited Partner. Immediately prior to the Partnership making any
Carry Distributions or upon the Realization of a Program Asset, the Carry Profit (or Carry Loss)
determined with respect to such distribution or Realization shall be credited (or debited, and, if
necessary, to an amount below zero) to the Carry Account of each IP Limited Partner in an amount
equal to such IP Limited Partner’s Carry Percentage in the Program Asset giving rise to such Carry
Profit (or Carry Loss) multiplied by such IP Limited Partner’s Vested Percentage in such Carry
Profit (or Carry Loss). An IP Limited Partner’s Carry Account shall be debited by the amount of
Carry Distributions made to such IP Limited Partner.

B-4

 

     (b) Adjustments to Carry Accounts. The General Partner, in its discretion, is permitted to
make adjustments, including retroactive adjustments, to the allocations of Carry Profit and Carry
Loss so that, on an aggregate basis the Carry Accounts of the IP Limited Partners more closely
match the aggregate rights of the IP Limited Partners to receive Carry Distributions or to make
clawback payments as provided in Article IV of the Agreement. Except to the extent the
General Partner determines otherwise (with notice to the other Partners), the General Partner
intends to cause any shortfall in the aggregate net Carry Profits (i.e., net of aggregate Carry
Losses) as compared to the aggregate amount of Carry Distributions (net of clawback payments)
distributable to the IP Limited Partners in accordance with Article IV of the Agreement to
be allocated on a pro rata basis to each Program Asset that otherwise produced Carry Profit (and
among them based on the relative amounts of Carry Profit).

     (c) Deemed Realization. Solely for purposes of determining an IP Limited Partner’s Carry
Account, the General Partner may, upon the admittance of a new Carried Interest Partner or at any
other time, deem there to have been a Realization of one or more Program Assets at the Fair Market
Value at such time of such Program Asset, in which case the deemed Carry Profit or Carry Loss
derived from such deemed Realization shall be allocated among the IP Limited Partners and charged
to the Carry Accounts of the IP Limited Partners. Any future actual or deemed Realization of a
Program Asset shall take into account the prior deemed Realization or Realizations.
Notwithstanding the foregoing, for purposes of determining an IP Limited Partner’s Vested
Percentage pursuant to Section B-2, such deemed Realizations shall be disregarded.

B-4 Distributions to the IP Limited Partners

     Subject to the holdback provisions of Section 4.5 of the Agreement, each IP Limited
Partner shall be entitled to receive an amount of Carry Distributions equal to the positive balance
in his Carry Account, provided that the sum of all of the Carry Distributions made to date
to the IP Limited Partners as a group cannot exceed the product of (A) the total Carry
Distributions made to date times (B) the aggregate Carry Percentages for all of the IP
Limited Partners (adjusted as necessary to take into account changes in Carry Percentages since the
formation of the Partnership). If the amount of Carry Distributions to be made to the IP Limited
Partners as a group is insufficient to reduce the positive Carry Account balances of all IP Limited
Partners to zero, then Carry Distributions made to the IP Limited Partners as a group will be made
pro rata among the IP Limited Partners based on their relative Carry Account balances. If the
amount of Carry Distributions to be made to the IP Limited Partners exceeds the aggregate positive
Capital Account balances of the IP Limited Partners, such excess shall be distributed among the IP
Limited Partners in the manner that the General Partner determines most appropriately reflects the
IP Limited Partners’ relative Carry Percentages (as adjusted by the Vested Percentages) in the
Program Assets giving rise to the Carry Distributions.

B-5 Responsibility for Gross Clawback Amount

     Each IP Limited Partner shall be responsible (only to the extent of Section 4.6(c) of
the Agreement) for a portion of the Gross Clawback Amount equal to the negative balance, if any, in
such IP Limited Partner’s Carry Account as of the final liquidating distribution of assets of the
Partnership pursuant to Section 8.2 of the Agreement.

B-6 83(b) Election

     Each Carried Interest Partner shall make a timely election under Section 83(b) of the Code
with respect to such Carried Interest Partner’s interest in the Partnership.

B-5

 

AMENDED AND RESTATED

LIMITED LIABILITY LIMITED PARTNERSHIP AGREEMENT

OF

ODI PROGRAM PARTNERSHIP, LLLP

[ Previously Named: Woodbridge Equity Fund LLLP ]

 

Date: March 13, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	ARTICLE I GENERAL PROVISIONS	 	 	1	 
	 	1.1	 	 	Formation

	 	 	1	 
	 	1.2	 	 	Name

	 	 	2	 
	 	1.3	 	 	Purpose

	 	 	2	 
	 	1.4	 	 	Principal Office

	 	 	2	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE II DEFINITIONS; DETERMINATIONS	 	 	2	 
	 	2.1	 	 	Definitions

	 	 	2	 
	 	2.2	 	 	Determinations

	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE III INVESTED CAPITAL; CAPITAL ACCOUNTS	 	 	6	 
	 	3.1	 	 	Invested Capital

	 	 	6	 
	 	3.2	 	 	Future Contributions

	 	 	7	 
	 	3.3	 	 	Capital Accounts

	 	 	7	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IV DISTRIBUTIONS	 	 	7	 
	 	4.1	 	 	Distribution Policy

	 	 	7	 
	 	4.2	 	 	Reimbursement Payment

	 	 	8	 
	 	4.3	 	 	Priority of Distributions

	 	 	8	 
	 	4.4	 	 	Apportionment of Carry Distributions

	 	 	9	 
	 	4.5	 	 	IP Clawback Reserve

	 	 	10	 
	 	4.6	 	 	Clawback Obligations

	 	 	11	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE V PROGRAM MANAGER	 	 	12	 
	 	5.1	 	 	Program Manager

	 	 	12	 
	 	5.2	 	 	Fees

	 	 	12	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VI GENERAL PARTNER	 	 	12	 
	 	6.1	 	 	Management Authority

	 	 	12	 
	 	6.2	 	 	No Liability to Partnership or Limited Partners

	 	 	13	 
	 	6.3	 	 	Indemnification

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VII LIMITED PARTNERS	 	 	14	 
	 	7.1	 	 	Limited Liability

	 	 	14	 
	 	7.2	 	 	No Participation in Management

	 	 	14	 
	 	7.3	 	 	Transfer of Limited Partnership Interests

	 	 	15	 
	 	7.4	 	 	No Termination

	 	 	15	 
	 	7.5	 	 	Additional Limited Partners

	 	 	15	 

     -i-     

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	 
	 	7.6	 	 	Reimbursement for Payments on Behalf of a Partner

	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE VIII DURATION AND TERMINATION	 	 	17	 
	 	8.1	 	 	Term

	 	 	16	 
	 	8.2	 	 	Termination and Liquidation

	 	 	16	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE IX VALUATION OF PARTNERSHIP ASSETS	 	 	17	 
	 	9.1	 	 	Normal Valuation

	 	 	17	 
	 	9.2	 	 	Restrictions on Transfer or Blockage

	 	 	17	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE X BOOKS OF ACCOUNTS; MEETINGS	 	 	18	 
	 	10.1	 	 	Books

	 	 	18	 
	 	10.2	 	 	Fiscal Year

	 	 	18	 
	 	10.3	 	 	Reports

	 	 	18	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	18	 
	 	11.1	 	 	Amendments

	 	 	18	 
	 	11.2	 	 	Successors

	 	 	19	 
	 	11.3	 	 	Governing Law; Severability

	 	 	19	 
	 	11.4	 	 	Notices

	 	 	19	 
	 	11.5	 	 	Arbitration

	 	 	19	 
	 	11.6	 	 	Miscellaneous

	 	 	20	 
	 	11.7	 	 	No Third Party Beneficiaries

	 	 	20	 
	 	 	 	 	 
	 	 	 	 
	APPENDIX A: TAX AND ACCOUNTING PROVISIONS	 	 	A-1	 
	 	A-1	 	 	Definitions

	 	 	A-1	 
	 	A-2	 	 	Maintenance of Capital Accounts

	 	 	A-2	 
	 	A-3	 	 	Allocations of Profits and Losses

	 	 	A-4	 
	 	A-4	 	 	Regulatory Allocations and Special Allocations

	 	 	A-4	 
	 	A-5	 	 	Tax Allocations

	 	 	A-5	 
	 	A-6	 	 	Tax Matters Partner; Management Authority Regarding
Tax and Accounting

	 	 	A-6	 
	 	 	 	 	 
	 	 	 	 
	APPENDIX B: APPORTIONMENT AND MODIFICATION OF CARRIED INTEREST TO IP LIMITED PARTNERS	 	 	B-1	 
	 	B-1	 	 	Definitions

	 	 	B-1	 
	 	B-2	 	 	Vesting Provisions

	 	 	B-3	 
	 	B-3	 	 	Determination of Carry Accounts

	 	 	B-4	 
	 	B-4	 	 	Distributions to the IP Limited Partners

	 	 	B-5	 
	 	B-5	 	 	Responsibility for Gross Clawback Amount

	 	 	B-5	 
	 	B-6	 	 	83(b) Election

	 	 	B-5	 

     -ii-     

 

 

AMENDED AND RESTATED

LIMITED LIABILITY LIMITED PARTNERSHIP AGREEMENT

OF

ODI PROGRAM PARTNERSHIP, LLLP

     THIS AGREEMENT OF LIMITED LIABILITY LIMITED PARTNERSHIP is deemed to be effective as of March
13, 2009 (the “Effective Date”) among the General Partner, the Limited Partners, the
Program Manager, and the Initial Limited Partner.

     WHEREAS, the Partnership (as defined below) was formed pursuant to (a) the Certificate (as
defined below) and (b) an Agreement of Limited Liability Limited Partnership dated as of March 13,
2008 (the “Initial Agreement”), between the General Partner, as general partner, and
Woodbridge Holdings Corporation, a Florida corporation, as the sole limited partner (the
“Initial Limited Partner”);

     WHEREAS, in furtherance of this Agreement, the Initial Limited Partner has transferred its
interest in the Partnership to the Program Manager and the Program Manager has transferred such
interest to the General Partner which hereafter shall be considered the General Partner’s interest;

     WHEREAS, the parties to this Agreement wish to amend and restate the Initial Agreement in its
entirety as hereinafter set forth, and to admit the IP Limited Partners, the Sponsor Partner and
the Residual Limited Partner as partners to the Partnership.

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

GENERAL PROVISIONS

1.1 Formation

     The
Partners hereby agree to continue a limited liability limited partnership (the “Partnership”)
pursuant to and in accordance with the Florida Revised Uniform Limited Partnership Act of 2005, as
amended from time to time (the “Partnership Act”). The term of the Partnership (the
“Term”) commenced upon the filing of the Certificate of Limited Partnership (the
“Certificate”) with the Secretary of State of Florida (the date of such filing is referred
to herein as the date of
“formation” of the Partnership) and shall continue until dissolution and termination of the
Partnership in accordance with the provisions of ARTICLE VIII hereof.

 

 

1.2 Name

     As of the date hereof, the Partners hereby agree that the name of the Partnership shall be
changed from Woodbridge Equity Fund LLLP to ODI Program Partnership, LLLP, and the General Partner
shall file a certificate of amendment effecting such name change. The General Partner shall be
entitled to further change the name to such other name or names as the General Partner may
designate from time to time.

1.3 Purpose

     The Partnership is organized for the principal purpose of (i) acquiring, managing, and
supervising the interests in the Program Assets, and (ii) engaging in such other activities
incidental or ancillary thereto as the General Partner deems necessary or advisable.

1.4 Principal Office

     The General Partner shall maintain a principal office in Fort Lauderdale, Florida, or at such
other place or places as the General Partner may from time to time designate.

ARTICLE II

DEFINITIONS; DETERMINATIONS

2.1 Definitions

     Capitalized terms used in this Agreement have the meanings set forth below or as otherwise
specified herein:

     “Agreement” means this Amended and Restated Limited Liability Limited Partnership of
ODI Program Partnership, LLLP, as amended or modified from time to time in accordance with its
terms.

     “Alternative Clawback Reserve” has the meaning set forth in Section 4.5.

     “Capital Account” is the account established for each Partner in accordance with the
provisions of Appendix A hereto.

     “Capital Proceeds” means any Investment Proceeds received by the Partnership in
respect of a Program Asset that are attributable to a Realization event.

     “Carried Interest Partners” means the Sponsor Partner, the IP Limited Partners, and
the Residual Limited Partner, in their capacities as Partners entitled to receive Carry
Distributions.

-2-

 

     “Carry Distributions” means those distributions paid to the Carried Interest Partners
in their capacities as such pursuant to Section 4.3(a)(ii) and Section
4.3(a)(iii)(B).

     “Carry Percentage” means, with respect to a Carried Interest Partner, its percentage
interest in Carry Distributions as set forth for such Partner on Schedule I hereof.

     “Certificate” has the meaning set forth in Section 1.1.

     “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

     “Contributed Property” means 1,435,000 shares of common stock of Office Depot, Inc.

     “Covered Party” means each of the Partners, a director, officer, partner or member (or
a former director, officer, partner or member) of any Partner, and to the extent approved by the
General Partner in its sole discretion, any other employee of a Partner or an agent acting at the
direction of the General Partner or the Program Manager, and in any such case, the heirs and legal
representatives of any such person.

     “Current Proceeds” means any Investment Proceeds received by the Partnership in
respect of a Program Asset that are not attributable to a Realization event, including dividends,
rents, or interest with respect to such Program Asset.

     “Deal Fees” means those amounts received by the General Partner (or an affiliate of
the General Partner) as break-up fees, director fees, “flip” fees, investment banking, consulting,
or similar transaction fees, but not including any amount received as reimbursement for expenses
directly related to the provision of such services for which the fee is being paid. “Deal Fees”
also means all amounts earned by any employee or agent (in such capacity) of the Program Manager
with respect to a Program Asset or other activities of the Partnership, but not including payments
to such employee or agent from the Program Manager.

     “Effective Date” has the meaning set forth in the Recitals.

     “Fair Market Value” of a security or a Program Asset means the amount that would be
realized as Investment Proceeds if such security or Program Asset had been sold at its “value”
(determined in accordance with Article IX).

     “Family Related Partner” means, with respect to any IP Limited Partner, any Person who
is a spouse or lineal descendent of the parents of such IP Limited Partner or any Person which is a
trust formed by such IP Limited Partner for investment by or for the benefit of such IP Limited
Partner’s spouse or any lineal descendants of the parents of such IP Limited Partner or of such IP
Limited Partner’s spouse and/or any charitable organization; provided that any cause of
action or other dispute arising in relation to a Family Related Partner’s interest may only be
pursued by the IP Limited Partner associated with such Family Related Partner, except if such IP
Limited Partner has died or become legally incapacitated.

     “GAAP” has the meaning set forth in Section 10.3.

-3-

 

     “General Partner” means ODI Program GP Corporation, in its capacity as general partner
of the Partnership, and any successor general partner of the Partnership.

     “Gross Clawback Amount” has the meaning specified in Section 4.6.

     “Impairment” means, with respect to a Program Asset, a determination by the General
Partner that the Program Asset is not expected to be able to provide for cash flow or realization
proceeds a return to investors of at least the amount of Invested Capital associated with such
asset as well as a 10% per annum compounded annual return on such Invested Capital. The General
Partner’s determination that a Program Asset has suffered an Impairment for purposes of this
Agreement shall be independent of any determination that the value of the Program Asset is reduced
for purposes of the financial statements prepared under generally accepted accounting principles.

     “Initial Agreement” has the meaning set forth in the Recitals.

     “Initial Limited Partner” has the meaning set forth in the Recitals.

     “Invested Capital” has the meaning set forth in Section 3.1.

     “Investment Proceeds” means the gross investment returns (whether in the form of cash,
securities, or other property) received by the Partnership in respect of the Partnership’s Invested
Capital in any Program Assets (i.e., in its capacity as an investor and not with respect to the
provision of any services with respect to such Program Assets or to any other investor in such
Program Assets). For the avoidance of doubt, the amount of Investment Proceeds shall be determined
without regard to any management fees, carried interest, or similar deductions that may be charged
by the General Partner or the Program Manager to any investment vehicle through which the
Partnership holds any of its investments.

     “IP Clawback Reserve” has the meaning set forth in Section 4.5.

     “IP Limited Partners” means any Persons designated as IP Limited Partners on
Schedule I hereof, in their capacities as limited partners of the Partnership, or any other
Persons that are admitted as IP Limited Partners in accordance with the terms hereof, in each case
for so long as such Persons continue to be IP Limited Partners hereunder, and “IP Limited
Partner” shall mean each of such Persons individually.

     “Limited Partners” means the IP Limited Partners and the Residual Limited Partner, and
“Limited Partner” shall mean each of such Persons individually.

     “Overall
Hurdle Clawback” has the meaning set forth in the limited partnership agreement
governing Woodbridge Executive Incentive Plan 1, LP.

     “Partners” means collectively the General Partner (including in its capacity as
Sponsor Partner), the Limited Partners, the Program Manager and any other Person that is admitted
to the Partnership as a partner in accordance with the terms hereof, and “Partner” shall
mean each of such persons individually.

     “Partnership” has the meaning set forth in Section 1.1.

-4-

 

     “Partnership Act” has the meaning set forth in Section 1.1.

     “Person” means an individual, a partnership (general, limited, or limited liability),
a corporation, a limited liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental, quasi-governmental, judicial, or
regulatory entity or any department, agency, or political subdivision thereof.

     “Platform” means all of the program partnerships (or other entities) that are designated as a
“Program Partnership” in accordance with the terms of the governing agreement of Woodbridge
Executive Incentive Plan 1, LP.

     “Portfolio Company” means Office Depot, Inc. and such other entities, the interests in
which are Program Assets.

     “Preferred Return” has the meaning set forth in Section 4.3.

     “Program Assets” means those assets held by the Partnership as part of the
Partnership’s investment program, and “Program Asset” shall mean each of such Program
Assets individually.

     “Program Expenses” means those costs, expenses, liabilities and obligations relating
to the Partnership’s activities, investments and business (to the extent not borne or reimbursed by
the Portfolio Company) as set forth on Schedule II hereof.

     “Program Manager” means Woodbridge Fund I, LLC.

     “Program
Partnership” means each partnership (or other entity) that is designated as a
“Program Partnership” in accordance with the terms of the governing documents of Woodbridge
Executive Incentive Plan 1, LP. All such partnerships together with the Partnership are the
“Program Partnerships.”

     “Realization” means the sale, redemption, or other disposition of, or any other
receipt of a capital nature, including proceeds from the recapitalization or refinancing at the
investment level (as determined by the General Partner) with respect to the whole or part of, or
the permanent write-off of a Program Asset, and “Realized” shall be construed accordingly.
To the extent a Program Asset has suffered an Impairment of less than the whole of the Program
Asset, a portion of the Program Asset equal to the amount of the Impairment shall be treated as if
sold for no consideration. If the General Partner determines that an Impairment has been reversed,
the General Partner shall adjust the allocations and distributions made by the Partnership so as to
reverse the effects of the prior Impairment.

     “Realized Base Contributions” has the meaning set forth in Section 4.3(a)(i).

     “Regulatory Allocations” has the meaning set forth in Appendix A hereto.

     “Reimbursement Payment” means the special payment to the Program Manager pursuant to
Section 4.2.

     “Reimbursing Partner” has the meaning set forth in Section 7.6(a).

     “Residual Limited Partner” means the Person entitled to receive the amounts of Carry
Distributions not made to the Sponsor Partner or the IP Limited Partners, which Person will be
Woodbridge Executive Incentive Plan 1, LP.

     “Return Distributions” means those distributions to the General Partner other than
Carry Distributions as set forth in Section 4.3.

-5-

 

     “Sponsor Partner” means the Person entitled to receive the amounts of Carry
Distributions apportioned to the Sponsor Partner pursuant to the terms hereof, which Person
initially will be the General Partner, in its capacity as Sponsor Partner.

     “Sponsor Proceeds” means all other proceeds received by the Partnership from or with
respect to its assets other than Investment Proceeds. Sponsor Proceeds include management fees,
carried interest, and Deal Fees charged by the Partnership to other investors in an investment
vehicle through which the Partnership holds its assets; provided, however, that to the
extent the General Partner determines that Deal Fees arising with respect to a Partnership asset
are attributable to the capital invested in that asset by the Partnership, such fees will be
treated as Investment Proceeds, rather than Sponsor Proceeds. For the avoidance of doubt, Deal
Fees attributable to the capital invested by a third party or not attributable to any investment of
capital will be treated as Sponsor Proceeds.

     “Term” has the meaning set forth in Section 1.1.

     “Transfer” means a transfer in any form, including a sale, assignment, conveyance,
pledge, mortgage, encumbrance, hypothecation, exchange, gift, or other disposition, or the act of
so doing, whether voluntarily, by operation of law, pursuant to judicial process, or otherwise as
the context requires.

     “Woodbridge” means Woodbridge Holdings Corporation or any direct or indirect
subsidiary of such corporation.

2.2 Determinations

     Unless otherwise indicated, any determinations or calculations conducted pursuant to this
Agreement shall be determined or calculated as of the date of such determination or calculation.

ARTICLE III

INVESTED CAPITAL; CAPITAL ACCOUNTS

3.1 Invested Capital 

     As of the Effective Date, the Partners shall be required to make the following contributions
to the capital of the Partnership (“Invested Capital”):

     (a) The General Partner has contributed (or is deemed to have contributed) the Contributed
Property to the Partnership, which for purposes hereof shall be treated as Invested Capital of
$18,763,454 and such Contributed Property will be treated as having a Book Value as defined in
Appendix A hereto.

     (b) Each IP Limited Partner shall contribute $250 to the capital of the Partnership.

-6-

 

     (c) The Residual Limited Partner shall contribute $250 to the capital of the Partnership.

     (d) The Program Manager shall contribute $250 to the capital of the Partnership.

The right of each IP Limited Partner, the Residual Limited Partner, and the Sponsor Partner to
receive Carry Distributions represents a profits interest received for services rendered or to be
rendered to or for the benefit of the Partnership.

3.2 Future Contributions

     (a) Other than the required Invested Capital described in Section 3.1, any
reimbursement payment pursuant to Section 7.6, or as may be required by applicable law, no
Partner shall have any further obligation to contribute additional Invested Capital to the
Partnership; provided that the General Partner shall be required to make special
distributions to the Partnership to the extent that such special distributions are necessary to
reduce any IP Limited Partner’s Alternative Clawback Reserve as described in Section
4.2(c).

     (b) The General Partner, in its discretion, whether or not in connection with the admission of
any new Partner to the Partnership in accordance with Section 7.5, may permit a Partner to
contribute additional Invested Capital to the Partnership under such circumstances as may be
determined by the General Partner.

     (c) The General Partner may cause the Partnership to borrow funds, including from Woodbridge,
under such terms as the General Partner may determine, in order to permit the Partnership to meet
its liquidity needs.

3.3 Capital Accounts

     (a) A capital account shall be maintained for each Partner in accordance with the provisions
of Appendix A hereto.

ARTICLE IV

DISTRIBUTIONS

4.1 Distribution Policy

     (a) Except as set forth in Section 4.1(c) and Section 4.4, the General Partner
shall periodically cause excess cash or cash equivalents held in the Partnership to be distributed
to the Limited Partners in accordance with Section 4.3.

     (b) Distributions may be in the form of cash, property, or securities. Except as otherwise
provided herein, for purposes of this Agreement, an in-kind distribution of non-cash property shall
be treated as if an amount of cash equal to the Fair Market Value of such property had been
distributed.

-7-

 

     (c) In determining the amounts that may be available for distribution to the Partners, the
General Partner shall first cause the Partnership to satisfy its current obligations, including its
obligation to make any Reimbursement Payment to the Program Manager in accordance with Section
4.2. In addition, the General Partner may cause the Partnership to retain such amounts as the
General Partner determines are appropriate to act as reserves for any fixed or contingent payments
or liabilities of the Partnership (including future amounts of Reimbursement Payments) for which
the Partnership may be liable.

4.2 Reimbursement Payment

     Prior to making any distributions to the Partners pursuant to Section 4.3, the
Partnership shall make a reimbursement payment (the “Reimbursement Payment”) to the Program
Manager equal to the amount of Program Expenses (including, for the avoidance of doubt, interest
accruing on the Program Manager’s line of credit used to finance such expenses) borne by, and
required to be paid by, the Program Manager that have yet to be reimbursed by the Partnership to
the Program Manager.

4.3 Priority of Distributions

     After making any Reimbursement Payment pursuant to Section 4.2, except to the extent
specifically provided in this Agreement to the contrary, distributions by the Partnership shall be
made among the Partners as follows:

     (a) Capital Proceeds and Sponsor Proceeds. Distributions designated as Capital Proceeds or
Sponsor Proceeds by the General Partner shall be distributed as follows:

	 	(i)	 	First, 100% to the General Partner as “Return
Distributions” until the General Partner has received aggregate
distributions sufficient to provide the General Partner a 10% per annum
cumulative annually compounded internal rate of return (the “Preferred
Return”) on the General Partner’s Invested Capital attributable to all
Program Assets (or portion thereof) that have been Realized (such Invested
Capital, the “Realized Base Contributions”), provided that for
purposes of determining the Preferred Return, the Invested Capital attributable
to the contribution of the Contributed Property shall be treated as having been
made on September 1, 2008. The General Partner will include as Return
Distributions any amounts received that relate to the investment in such
Program Assets, regardless of whether such amounts are received through, or
outside of, the Partnership. For the avoidance of doubt, an “internal rate of
return” calculation encompasses a return of, as well as a return on, the
Realized Base Contributions.
	 
	 	(ii)	 	Second, 20% to the General Partner (as additional
Return Distributions) and 80% to the Carried Interest Partners (and among them
as provided in Section 4.4) as “Carry Distributions,” until the
aggregate amount of Carry Distributions equals 20% of the excess of (A) the
aggregate amount of
Return Distributions and Carry Distributions distributed over (B)
the Realized Base Contributions; and

-8-

 

	 	(iii)	 	Thereafter, between the General Partner and the
Carried Interest Partners as follows:

	 	(A)	 	The General Partner is allocated an additional
amount (as additional Return Distributions) so that the aggregate
amount of Return Distributions distributed to the General Partner
equals the sum of (1) the Realized Base Contributions plus (2)
80% of the amount by which the aggregate Investment Proceeds received
by the Partnership exceeds the Realized Base Contributions; and
	 
	 	(B)	 	The remainder to the Carried Interest Partners
as additional Carry Distributions.

     (b) Current Proceeds. Distributions designated as Current Proceeds by the General Partner
shall be distributed in the same manner as Capital Proceeds and Sponsor Proceeds pursuant to
Section 4.3(a) except that for purposes of applying those provisions with respect to a
particular distribution of Current Proceeds, the Program Asset giving rise to such Current Proceeds
will be deemed to have been Realized for an amount equal to the Invested Capital (and taking into
account any prior unreversed Impairment with respect to such Program Asset) attributable to such
Program Asset immediately prior to the distribution of such Current Proceeds.

4.4 Apportionment of Carry Distributions

     Carry Distributions will be made to and among the Carried Interest Partners in the following
amounts:

     (a) Distributions to the Sponsor Partner. The Sponsor Partner shall in all cases receive 35%
of all Carry Distributions.

     (b) Distributions to the IP Limited Partners. The IP Limited Partners as a group shall receive
a portion of Carry Distributions, which portion shall not exceed the aggregate Carry Percentages of
the IP Limited Partners, but which may be reduced by the vesting and other provisions in
Appendix B hereto. The provisions of Appendix B will govern the determination of
each IP Limited Partner’s share of such Carry Distributions.

     (c) Distributions to the Residual Limited Partner. Carry Distributions not made to the
Sponsor Partner or the IP Limited Partners shall be made to the Residual Limited Partner. For the
avoidance of doubt, any reductions in Carry Distributions to the IP Limited Partners pursuant to
the vesting provisions set forth in Appendix B hereto shall accrue to the benefit of the
Residual Partner.

-9-

 

4.5 IP Clawback Reserve

     (a) Notwithstanding the provisions of Section 4.3 and Section 4.4 and Appendix B hereto, 25%
(adjusted as provided in Section 4.5(b) below) of any Carry Distributions that are available for
distribution to an IP Limited Partner shall be withheld by the Partnership, and a separate
bookkeeping account (an “IP Clawback Reserve”) shall be established for such IP Limited Partner by
the Partnership for tracking deposits, withdrawals, and interest earned with respect to such
account. The Partnership may aggregate each of the IP Clawback Reserves within a single
interest-bearing Partnership bank account.

     (b) Each time that the Partnership is to make a distribution of Carry Distributions,
the General Partner (together with the general partners of each of the other Program Partnerships)
will review the remaining Program Assets and the assets within each other Program Partnership in
the Platform to determine whether any of the cumulative assets have suffered an Impairment that has
not been reversed, and if so, the effect that such Impairment would have on the ability of
Woodbridge (in its capacity as an investor in such program partnership) to receive proceeds from
such Program Partnership sufficient to provide Woodbridge with at least a 10% annual cumulative
compounded internal rate of return on its Invested Capital (as defined by the governing agreement
of such Program Partnership) in such Program Partnership. If the General Partner determines that
the Impairment would prevent such minimum return from being achieved, the General Partner may
increase the percentage (but not in excess of 100%) of Carry Distributions to be contributed to the
IP Clawback Reserve of any Executive IP Partner (as defined below) in order to add to such IP
Clawback Reserve an amount which, when combined with the other reserves being established by the
other Program Partnerships and by Woodbridge Executive Incentive Plan 1, LP with respect to such
Executive IP Partner, will cover such Executive IP Partner’s share of the Overall Hurdle
Clawback that is anticipated to arise.

	 	(i)	 	“Executive IP Partner” shall mean any person who is both an IP Limited
Partner and a limited partner of Woodbridge Executive Incentive Plan 1, LP.
	 
	 	(ii)	 	For the avoidance of doubt, the General Partner shall not increase the
percentage of Carry Distributions to be contributed to the IP Clawback Reserve
of any IP Limited Partner who is not an Executive IP Partner.

     (c) Notwithstanding the foregoing, in the General Partner’s discretion, rather than
depositing amounts in the IP Clawback Reserve for an IP Limited Partner, the General Partner may
cause such amounts to be distributed to the General Partner as additional Return Distributions,
which will be credited to a special bookkeeping account (an “Alternative Clawback Reserve”) for the
benefit of such IP Limited Partner. The balance in the Alternative Clawback Reserve shall be
increased from time to time by an interest factor equal to the interest earned on the IP Clawback
Reserve (or, if there is no IP Clawback Reserve, on the rate of interest that the Partnership would
receive on an interest-bearing bank account).

     (d) As set forth in Section 4.6, at the expiration of the Term of the
Partnership, each IP Limited Partner will be responsible for a share of the Gross Clawback Amount,
if any.

	 	(i)	 	     To satisfy an IP Limited Partner’s share, amounts will first
be taken from such IP Limited Partner’s Alternative Clawback Reserve. To the
extent that such IP Limited Partner’s share is not satisfied, amounts will be
taken from such IP Limited Partner’s IP Clawback Reserve.
	 
	 	(ii)	 	     (A) To the extent amounts in the Alternative Clawback
Reserve are not needed to satisfy the share of an IP Limited Partner who is
not an Executive IP Partner of the Gross Clawback Amount, an amount of Return
Distributions that would otherwise be payable to the General Partner or Carry
Distributions otherwise payable to the Sponsor Partner equal to such excess,
shall instead be specially distributed to the applicable IP Limited Partner
without regard to Section 4.3, which distributions will reduce on a
dollar-for-dollar basis the amount in such IP Limited Partner’s Alternative
Clawback Reserve. If the full amount of such excess cannot be so distributed,
the shortfall shall be contributed by the General Partner to the Partnership
for special distribution to the applicable IP Limited Partner.
	 
	 	(iii)	 	     (B) To the extent amounts in the Alternative Clawback Reserve are not
needed to satisfy the share of an Executive IP Partner of the Gross Clawback
Amount, such excess amounts will be added to the Alternative Clawback Reserve
established for the benefit of such Executive IP Partner by Woodbridge
Executive Incentive Plan 1, LP.
	 
	 	(iv)	 	     (A) For any IP Limited Partner who is not an Executive IP Partner, to
the extent amounts in such IP Limited Partner’s IP Clawback Reserve (including
interest earned thereon) are not needed to fund such IP Limited Partner’s
share of the Gross Clawback Amount, such amounts will be released by the
Partnership to the applicable IP Limited Partner.
	 
	 	 	 	     (B) For any Executive IP Partner, to the extent amounts in such Executive
IP Partner’s IP Clawback Reserve (including interest earned thereon) are
not needed to fund such Executive IP Partner’s share of the Gross Clawback
Amount, such amounts will be added to the Clawback Reserve established for
the benefit of such Executive IP Partner by Woodbridge Executive Incentive
Plan 1, LP.

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     (e) Prior to the expiration of the Term of the Partnership, the General Partner, in
its discretion, may release reserved amounts to an IP Limited Partner who is not an Executive IP
Partner by (i) causing special distributions reducing such IP Limited Partner’s Alternative
Clawback Reserve or causing contributions and special distributions, each as described in Section
4.5(d) above, or (ii) distributing amounts to an IP Limited Partner from such IP Limited Partner’s
IP Clawback Reserve, in either case to the extent the General Partner determines that such released
amounts are not necessary to secure such IP Limited Partner’s share of the Gross Clawback Amount,
each as described in Section 4.6. Similarly the General Partner may, in its discretion, move
amounts to the Alternative Clawback Reserve or the Clawback Reserve of an Executive IP
Partner established for the benefit of such Executive IP Partner by Woodbridge
Executive Incentive Plan 1, LP.

4.6 Clawback Obligations

     (a) Following the final liquidating distribution of assets pursuant to Section 8.2, if
there have been any Carry Distributions, the General Partner shall determine the additional amount
of Return Distributions (the “Gross Clawback Amount”), if any, that would need to have been
distributed to the General Partner in connection with such final liquidating distribution so that
each of the following would have been true:

	 	(i)	 	The General Partner would have received sufficient Return
Distributions to provide it with at least the Preferred Return on the General
Partner’s Invested Capital, as calculated pursuant to Section
4.3(a)(i); and
	 
	 	(ii)	 	The General Partner would have received Return Distributions at
least equal to the amount of its Invested Capital plus 80% of the amount by
which the aggregate Investment Proceeds received by the Partnership exceeded
the General Partner’s Invested Capital.

     (b) Each Carried Interest Partner shall be responsible for returning to the Partnership, for
distribution to the General Partner, its share of the Gross Clawback Amount, determined as follows:

	 	(i)	 	The Sponsor Partner shall be responsible for its Carry
Percentage (i.e., 35%);
	 
	 	(ii)	 	The IP Limited Partners as a group shall be responsible for
their aggregate Carry Percentage of the Gross Clawback Amount, with each such
IP Limited Partner being severally (and not jointly) responsible for the amount
determined pursuant to Appendix B hereto and only to the extent of
clause (c) below; and
	 
	 	(iii)	 	The Residual Limited Partner shall be responsible for its
Carry Percentage of the Gross Clawback Amount;

provided that if Carry Percentages have changed over the Term of the Partnership, the
determination shall be based on the relative amounts of Carry Distributions received over the Term
of the Partnership or any other method determined by the General Partner to appropriately take into
account such variations.

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     (c) In no event will an IP Limited Partner be personally liable for a clawback obligation that
exceeds the aggregate amount of such IP Limited Partner’s Alternative Clawback
Reserve and IP Clawback Reserve. In no event shall an IP Limited Partner be responsible for
another Partner’s share of the Gross Clawback Amount.

     (d) The Residual Limited Partner’s obligation to satisfy its clawback obligation will be
limited to those amounts established as a clawback reserve under the terms of the limited
partnership agreement governing the Residual Limited Partner and will be a several (and not joint)
obligation of the partners in the Residual Limited Partner.

ARTICLE V

PROGRAM MANAGER

5.1 Program Manager

     The Program Manager will be responsible for managing the day-to-day activities of the
Partnership and the Partnership’s assets, subject to the direction of the General Partner;
provided that the Program Manager will have no authority to legally bind the Partnership
without the express consent of the General Partner.

5.2 Fees

     The Program Manager shall not be entitled to any fees, payments, or distributions other than
as expressly provided herein, or as otherwise approved by the General Partner. To the extent the
Program Manager or any employee or agent (in such capacity) of the Program Manager receives any
Deal Fees with respect to a Program Asset, the calculations called for in this Agreement will be
adjusted so that total amounts received by the Program Manager or such employee or agent (in such
capacity) of the Program Manager are the same as if all such Deal Fees had been paid to the
Partnership.

ARTICLE VI

GENERAL PARTNER

6.1 Management Authority

     (a) The management of the Partnership shall be vested exclusively in the General Partner, and
the General Partner shall have full control over the business and affairs of the Partnership. The
General Partner shall have the power on behalf and in the name of the Partnership to carry out any
and all of the objectives and purposes of the Partnership and to perform all acts and enter into
and perform all contracts and other undertakings which the General Partner, in its reasonable
discretion, deems necessary or advisable or incidental thereto, including the power to acquire and
dispose of any security (including marketable securities) or incur indebtedness or guarantee the
indebtedness of the Portfolio Company.

-12-

 

     (b) Third parties dealing with the Partnership can rely conclusively upon the General
Partner’s certification that it is acting on behalf of the Partnership and that its acts are
authorized. The General Partner’s execution of any agreement on behalf of the Partnership is
sufficient to bind the Partnership for all purposes.

     (c) The General Partner will have the right and power to establish the availability and terms
of any offering of opportunities for an IP Limited Partner or any Family Related Partner or any
other “friend or family member” of an IP Limited Partner to co-invest alongside the Partnership in
all or part of the Partnership’s investments.

6.2 No Liability to Partnership or Limited Partners

     No Covered Party shall be liable to the Partnership or any Partner for any action taken, or
failure to act, on behalf of the Partnership (or on behalf of the General Partner or the Program
Manager with respect to the Partnership) if such Covered Party (a) acted honestly and in good faith
with a view to the best interests of the Partnership, or, as the case may be, to the best interests
of the other entity for which the Covered Party acted as director, officer, employee, agent, or in
a similar capacity at the request of the General Partner or the Program Manager for the benefit of
the Partnership; and (b) in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, the Covered Party had reasonable grounds for believing that the
Covered Party’s conduct was lawful. In addition, any Covered Party who has delegated to any other
Person (other than to another Covered Party) any part of its functions (including participating in
the management of or rendering professional advice or other services in respect of any Program
Asset) shall not be liable, responsible, or accountable in damages or otherwise to the Partnership
or to any Partner for any loss incurred or suffered by reason of any action by such other Person
unless the delegating Covered Party did not (x) act honestly and in good faith with a view to the
best interests of the Partnership, or, as the case may be, to the best interests of the other
entity for which the Covered Party acted as director, officer, employee, agent, or in a similar
capacity at the request of the General Partner or the Program Manager for the benefit of the
Partnership; and (y) in the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, have reasonable grounds for believing that the Covered Party’s
conduct was lawful with respect to such delegation. For the avoidance of doubt, nothing in the
immediately preceding sentence shall be deemed to prevent the Partnership, the General Partner or
the Program Manager from asserting a cause of action against the delegate of a Covered Party for
any loss caused by the action, or failure to act, of such delegate and the General Partner shall
cause the Partnership to effectively pursue any such cause of action to the extent it would be in
the reasonable best interests of the Partnership to do so.

6.3 Indemnification

     (a) Subject to Section 6.3(c), the Partnership shall indemnify each Covered Party
against all costs, charges, and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by the Covered Party in respect of any civil, criminal,
administrative, investigative, or other proceeding in which the Covered Party is involved because
of such Covered Party’s association with the Partnership, the General Partner, or the Program
Manager if such Covered Party (i) acted honestly and in good faith with a view to the best
interests of the Partnership or, as the case may be, to the best interests of the other entity
for which the Covered Party acted as director, officer, employee, agent, or in a similar capacity
at the request of the General Partner or the Program Manager and for the benefit of the
Partnership; and (ii) had reasonable grounds for believing that such Covered Party’s conduct was
lawful, in the case of a criminal or administrative action or proceeding that is enforced by a
monetary penalty.

-13-

 

     (b) Subject to Section 6.3(c), the Partnership shall advance moneys to a Covered Party
for the costs, charges, and expenses of a proceeding referred to in Section 6.3(a). The
Covered Party shall repay the moneys if the Covered Party does not fulfill the conditions of
Section 6.3(a).

     (c) Before seeking indemnification from the Partnership, a Covered Party seeking such
indemnification shall use all reasonable efforts to seek indemnification from the following sources
(in the following order of priority): first, from the Portfolio Company, including any insurance
provided by, or purchased on behalf of a Covered Party by, the Portfolio Company; and second, from
the General Partner or the Program Manager, including from any insurance provided by the General
Partner or the Program Manager. To the extent any unpaid indemnification obligation remains after
the Covered Party has received indemnification from the foregoing sources, the Partnership shall
indemnify such Covered Party for such shortfall.

ARTICLE VII

LIMITED PARTNERS

7.1 Limited Liability

     No Limited Partner shall be personally liable for any obligations of the Partnership or have
any obligation to make contributions to the Partnership other than such Limited Partner’s initial
contribution pursuant to Section 3.1 or as required pursuant to Section 4.6 or
Section 7.6; provided that a Limited Partner shall be required to return any
distribution made to it in error. To the extent any Limited Partner is required by the Partnership
Act to return to the Partnership any distributions made to it and does so, such Limited Partner
shall have a right of contribution from each other Limited Partner similarly liable to return
distributions made to it to the extent that such Limited Partner has returned a greater percentage
of the total distributions made to it and required to be returned by it than the percentage of the
total distributions made to such other Limited Partner and so required to be returned by it.

7.2 No Participation in Management

     The Limited Partners (in their capacity as such) shall not participate in the control,
management, direction, or operation of the affairs of the Partnership and shall have no power to
bind the Partnership.

-14-

 

7.3 Transfer of Limited Partnership Interests

     (a) A Limited Partner may not Transfer all or a portion of its interest in the Partnership
without the consent of the General Partner; provided that the General Partner shall not
unreasonably withhold its consent to a Transfer by an IP Limited Partner to a Family Related
Partner of such IP Limited Partner.

     (b) Unless and until the General Partner consents to the admission of a transferee as a
substituted Limited Partner in accordance with this Section 7.3, the transferor shall
remain liable for all liabilities and obligations relating to the transferred beneficial interest,
if any, and the transferee shall become an assignee of only a beneficial interest in Partnership
profits, losses and distributions of such interest. No consent of any other Limited Partner shall
be required as a condition precedent to any Transfer.

     (c) Unless the General Partner otherwise determines in its sole discretion, the transferor and
transferee of any Limited Partner’s interest shall be jointly and severally obligated to reimburse
the General Partner and the Partnership for all reasonable expenses (including attorneys’ fees and
expenses) of any Transfer or proposed Transfer of a Limited Partner’s interest, whether or not
consummated.

     (d) Any substituted Limited Partner admitted to the Partnership with the consent of the
General Partner shall succeed to all the rights and be subject to all the obligations of the
transferring or assigning Limited Partner with respect to the interest to which such Limited
Partner was substituted. The General Partner may modify Schedule I hereof to reflect such
admittance of any substituted Limited Partner. Such substituted Limited Partner shall be treated
as having received all of the allocations and distributions received by the transferring or
assigning Limited Partner, if any.

     (e) Any Transfer that violates this Section 7.3 shall be void and the purported buyer,
assignee, transferee, pledgee, mortgagee, or other recipient shall have no interest in or rights to
Partnership assets, profits, losses, or distributions, and neither the General Partner nor the
Partnership shall be required to recognize any such purported interest or rights.

7.4 No Termination

     Neither the substitution, death, incompetency, dissolution (whether voluntary or involuntary),
nor bankruptcy of a Limited Partner shall affect the existence of the Partnership, and the
Partnership shall continue for the Term of the Partnership until its existence is terminated as
provided herein.

7.5 Additional Limited Partners

     Additional Limited Partners will be admitted only with the consent of the General Partner on
such terms as agreed upon by the General Partner and the Person seeking admission to the
Partnership.

-15-

 

7.6 Reimbursement for Payments on Behalf of a Partner

     (a) If the Partnership is obligated to pay any amount to a governmental agency or body or to
any other Person (or otherwise make a payment) because of a Partner’s status or otherwise
specifically attributable to a Partner (including, without limitation, federal withholding taxes
with respect to foreign Partners, state withholding taxes, state personal property taxes, state
unincorporated business taxes, etc.) then such Partner (the “Reimbursing Partner”) shall
reimburse the Partnership in full for the entire amount paid (including, without limitation, any
interest, penalties, and expenses associated with such payment). At the election of the General
Partner, the amount to be reimbursed may be charged against the Capital Account of the Reimbursing
Partner, and the Partnership shall reduce subsequent distributions which would otherwise be made to
the Reimbursing Partner until the Partnership has recovered the amount to be reimbursed;
provided that the amount of such reduction shall be deemed to have been distributed for all
purposes of this Agreement, but such deemed distribution shall not further reduce the Reimbursing
Partner’s Capital Account.

     (b) A Partner’s obligation to reimburse the Partnership under this Section 7.6 shall
survive the termination, dissolution, liquidation, and winding-up of the Partnership, and for
purposes of this Section 7.6, the Partnership shall be treated as continuing in existence.

ARTICLE VIII

DURATION AND TERMINATION

8.1 Term

     The Partnership shall continue until the occurrence of any of the following events: (i) the
entry of a decree of judicial dissolution under the Act or (ii) an election by the General Partner
to dissolve the Partnership.

8.2 Termination and Liquidation

     (a) The Partnership shall not terminate immediately upon the expiration of its Term under
Section 8.1, but shall cease to engage in further business except to the extent necessary
to promptly wind-up its affairs, perform existing contracts, and preserve the value of the Program
Assets.

     (b) During the course of winding-up the Partnership all of the provisions of this Agreement
shall continue to bind the parties and apply to the activities of the Partnership except as
specifically provided to the contrary, but there shall be no distributions to the Partners except
as provided in this Section 8.2.

     (c) Upon the expiration of the Partnership’s Term, the General Partner shall take such actions
as it may think fit for winding-up the Partnership and liquidating the Program Assets, including:

	 	(i)	 	The filing of all certificates and notices of dissolution as
are required by applicable law; and

-16-

 

	 	(ii)	 	The Realization of any Program Asset (unless the General
Partner intends to distribute such Program Asset in kind); provided
that all such Realizations shall be conducted in an orderly and businesslike
manner so as not to involve undue sacrifice.

The General Partner in taking such actions may exercise and shall have the benefit of all rights,
powers, and discretions vested in the General Partner pursuant to the provisions of this Agreement.
If the General Partner is not able to act as the liquidator of the Partnership or exercise the
powers inherent thereto, a liquidator shall be appointed by the Residual Limited Partner.

     (d) Upon dissolution of the Partnership, all Partnership assets shall be distributed or used
as follows and in the following order of priority:

	 	(i)	 	For the payment of the debts and liabilities of the
Partnership, including, without limitation, the expenses of liquidation.
	 
	 	(ii)	 	For the setting up of any reserves which the General Partner
may deem reasonably necessary for any liabilities or obligations of the
Partnership.
	 
	 	(iii)	 	To the Partners in accordance with the provisions of
Article IV.

     (e) The Partnership shall be terminated only after the Partnership assets have been
distributed as provided in this Section 8.2.

ARTICLE IX

VALUATION OF PARTNERSHIP ASSETS

9.1 Normal Valuation

     For purposes of this Agreement, the value of any asset as of any date (or in the event such
date is a holiday or other day which is not a business day, as of the immediately preceding
business day) shall be valued by the General Partner in good faith using methods it considers
appropriate.

9.2 Restrictions on Transfer or Blockage

     Any security which is held under a representation that it has been acquired for investment
purposes and not with a view to public sale or distribution, or which is held subject to any other
restriction on transfer, or where the size of the Partnership’s holdings compared to the trading
volume would adversely affect the marketability of such security, shall be valued at such discount
as the Program Manager deems reasonably necessary to reflect the marketability and value of such
security.

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ARTICLE X

BOOKS OF ACCOUNTS; MEETINGS

10.1 Books

     The Partnership shall maintain complete and accurate books of accounts of the Partnership’s
affairs at the Partnership’s principal office.

10.2 Fiscal Year

     The fiscal year and taxable year of the Partnership shall be the calendar year, unless
otherwise determined by the General Partner.

10.3 Reports

     The General Partner shall furnish to each Partner the following information and reports
prepared in accordance with U.S. generally accepted accounting principles (“GAAP”):

     (a) As soon as practicable after the end of each fiscal year commencing with the first year in
which the Partnership is in operation for a full fiscal year, (i) financial statements for the
Partnership for such year (audited by a firm of independent certified public accountants of
recognized national standing selected by the General Partner), and (ii) a statement of each
Partner’s closing Capital Account balance as of the end of such year; and

     (b) As soon as practicable after the end of each fiscal year, the Partnership’s United States
federal income tax return, including such Partner’s Schedule K-1 for such fiscal year.

ARTICLE XI

MISCELLANEOUS

11.1 Amendments

     This Agreement may be amended by the written consent of the General Partner, provided
that if such amendment would adversely affect any Carried Interest Partner, then the Carried
Interest Partner so affected must consent to such amendment. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be amended by the General Partner without the consent
of any other Partner in order to cure any ambiguity or error, make an inconsequential revision,
provide clarity, comply with any law or regulation or correct or supplement any provision herein
which may be defective or inconsistent with any other provisions herein; provided that,
except with respect to amendments necessary to comply with any law or regulation, such amendment
does not materially and adversely affect any Limited Partner.

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11.2 Successors

     Except as otherwise provided herein, this Agreement shall inure to the benefit of and be
binding upon the Partners and their legal representatives, heirs, successors, and assigns.

11.3 Governing Law; Severability

     This Agreement shall be governed by and construed in accordance with the laws of the State of
Florida, and, to the maximum extent possible, in such manner as to comply with all the terms and
conditions of the Partnership Act. If it is determined by a court of competent jurisdiction that
any provision of this Agreement is invalid under applicable law, such provision shall be
ineffective only in such jurisdiction and only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.

11.4 Notices

     All notices, demands, and other communications to be given and delivered under or by reason of
provisions under this Agreement shall be in writing and shall be deemed to have been given on the
date when personally delivered, when mailed by first class mail, when sent by facsimile or
transmitted by email or the internet, or when sent by reputable overnight courier service, in each
case to the recipient at the address, facsimile number or email address set forth in Schedule
I hereof or to such other address, facsimile number, or email address, or to the attention of
such other Person as has been indicated in writing to the General Partner.

11.5 Arbitration

     The parties to this Agreement shall each use good faith efforts for a period of 30 days (or
such longer time as agreed to by the applicable parties) to try to resolve any controversy,
dispute, or claim arising out of or in connection with this Agreement, or the breach, termination
or validity hereof. Thereafter, if such controversy, dispute, or claim remains, it shall be
settled by final and binding arbitration to be conducted by an arbitration tribunal in Fort
Lauderdale, Florida, pursuant to the rules of the American Arbitration Association. The
arbitration tribunal shall consist of three arbitrators. The party initiating the controversy,
dispute, or claim that led to arbitration shall nominate one arbitrator in the request for
arbitration and the other party shall nominate a second arbitrator in the answer thereto within 30
days of receipt of the request; provided that if there are multiple initiating or answering
parties, the arbitrator selected must be reasonably acceptable to all initiating or answering
parties, as applicable. The two arbitrators so named will then jointly appoint the third
arbitrator. If the answering party fails to nominate its arbitrator within the 30-day period, or
if the arbitrators named by the parties fail to agree on the third arbitrator within 60 days, the
office of the American Arbitration Association in New York, New York shall make the necessary
appointments of such arbitrator(s). The decision or award of the arbitration tribunal (by a
majority determination, or if there is no majority, then by the determination of the third
arbitrator, if any) shall be final, and judgment upon such decision or award may be entered in any
competent court or application may be made to any competent court for judicial acceptance of such
decision or award and an order of enforcement. In the event
of any procedural matter not covered by the aforesaid rules, the procedural law of the State
of Florida shall govern.

-19-

 

11.6 Miscellaneous

     This Agreement (including the Appendices hereto) contains the entire agreement among the
parties and supersedes all prior arrangements or understanding with respect thereto. Descriptive
headings are for convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement. This Agreement may be executed in any number of counterparts, any
one of which need not contain the signatures of more than one party, but all of such counterparts
together shall constitute one agreement. Whenever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and the plural, and
pronouns stated in either the masculine, the feminine or the neuter gender shall include the
masculine, the feminine, and the neuter.

11.7 No Third Party Beneficiaries

     No Person that is not a party hereto shall have any rights or obligations pursuant to this
Agreement. The rights and obligations set forth herein are for the benefit of the parties hereto
only and do not create or grant any rights to third parties.

-20-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	GENERAL PARTNER:

SPONSOR PARTNER:

ODI PROGRAM GP CORPORATION

 	 
	 	By:  	/s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	RESIDUAL LIMITED PARTNER:

WOODBRIDGE EXECUTIVE INCENTIVE PLAN 1, LP

 	 
	 	By:  	WOODBRIDGE FUND I, LLC,
its General Partner
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                WOODBRIDGE HOLDINGS CORPORATION,
its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                              /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 

 -21- 

 

	 	 	 	 	 

	 	 	 	 	 
	 	IP LIMITED PARTNERS:

 	 
	 	/s/ Alan B. Levan
 	 
	 	Alan B. Levan 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ John E. Abdo
 	 
	 	John E. Abdo 	 
	 	 	 
	 
	 	 	 
	 	                                              /s/ Seth M. Wise
 	 
	 	Seth M. Wise 	 
	 	 	 

 -22- 

 

	 	 	 	 	 

	 	 	 	 	 
	 	PROGRAM MANAGER:

WOODBRIDGE FUND I, LLC

 	 
	 	By:  	WOODBRIDGE HOLDINGS CORPORATION,
its Sole Member
 	 
	 	 	 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                /s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	INITIAL LIMITED PARTNER:

WOODBRIDGE HOLDINGS CORPORATION

 	 
	 	By:  	/s/ John K. Grelle
 	 
	 	 	Name:  	John K. Grelle 	 
	 	 	Title:  	Chief Financial Officer 	 

 -23- 

 

Schedule I

ODI Program Partnership, LLLP

List of Carried Interest Partners and Applicable Carry Percentages

	 	 	 	 	 
	Carried Interest Partner	 	Carry Percentage	 
	 
	 	 	 	 
	Sponsor Partner
	 	 	35.0	%
	 
	 	 	 	 
	IP Limited Partners (divided as listed below)
	 	 	32.5	%
	 
	 	 	 	 
	Alan Levan
	 	 	37.5%	 
	 
	 	 	 	 
	Jack Abdo
	 	 	37.5%	 
	 
	 	 	 	 
	Seth Wise
	 	 	25.0%	 
	 
	 	 	 	 
	Residual Limited Partner
	 	 	32.5	%
	 
	 	 	 	 
	 
	TOTAL
	 	 	100.0	%

 

 

Schedule II

Program Expenses

	 	 	 	 	 	 
	 
	 	Amounts Included in Program Expenses	 	 	Amounts Excluded from Program Expenses	 
	 	Salaries and bonuses

Salary for any investment professionals
of the Program Manager, except in the
case where Woodbridge Holdings executives
are the investment professionals.

Salaries and cash bonus of direct
dedicated staff members.

	 	 	Salaries and bonuses

Woodbridge Holdings incentive stock
options or stock grants to any investment
professional or dedicated staff member as
part of a Woodbridge Holdings-wide
incentive compensation program.	 
	 	Direct Expenses

Direct dedicated expenses incurred
directly by the Program Manager,
including rent, facilities charges,
equipment and supplies, except in the
case where Woodbridge Holdings executives
are the investment professionals.

Outside legal and accounting expenses
incurred for services rendered with
respect to the Program Manager or the
Partnership, including formation
costs, and tax return preparation.

Unreimbursed costs of transactions, including due diligence
expenses and the carrying costs of
deposits, to the extent the transaction that generated the cost does
not close.

Travel expenses neither capitalized as
part of the acquisition of a completed
transaction nor borne by the target
company.

Standard charges by internal Woodbridge
Holdings personnel for provision of
back-office support services directly
related to the program or Program Assets
(i.e., providing the accounting services
for the Partnership, providing
human resources services for the
Partnership).

	 	 	Direct Expenses

Time of Investment Committee in
evaluating investment recommendations.	 
	 

 

 

	 	 	 	 	 	 
	 
	 	Amounts Included in Program Expenses	 	 	Amounts Excluded from Program Expenses	 
	 	Standard charges by BFC Shared Services
for back-office support services directly
related to the program or Program Assets.
Interest on borrowings of the Program
Manager, including any that accrued at
the rate of 12% compounded per annum on
amounts received through a pre-approved
line of credit from Woodbridge
Overhead Funding, LLC. For purposes of
this provision, all amounts of funds
provided to the Program Manager shall be
treated as borrowings and shall accrue
12% interest regardless of whether such
funds were provided in the form of loans,
equity capital, or otherwise.
	 	 	 	 
	 	Allocation of Woodbridge
Holdings Overhead

None.

	 	 	Allocation of Woodbridge
Holdings Overhead

General corporate overhead (i.e., public
company costs, office expenses for
non-dedicated staff, investor relations
and accounting staff not dedicated,
analytical staff providing analytics to
Woodbridge Holdings, management for
oversight of programs and Program
Assets).

Any other overhead expenses not expressly
included on this Schedule II as Program
Expenses.	 
	 

 

 

APPENDIX A: 

Tax and Accounting Provisions

A-1 Definitions

     For purposes of this Appendix A, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit
balance, if any, in such Partner’s Capital Account, as of a specified time, after giving effect to
the following adjustments:

     (a) credit to such Partner’s Capital Account any amounts that such Partner is obligated to
restore or deemed obligated to restore pursuant to Treasury Regulations Section
1.704-1(b)(2)(ii)(c) and the penultimate sentences of Treasury Regulations Section 1.704-2(g)(1)
and Treasury Regulations Section 1.704-2(i)(5); and

     (b) debit to such Partner’s Capital Account the items described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     “Book Value” means, with respect to any asset, the asset’s adjusted basis for U.S.
federal income tax purposes, except as follows:

     (a) the initial Book Value of any asset that is not Contributed Property as defined in the
Agreement but is otherwise contributed or deemed contributed to the Partnership shall be such
asset’s gross fair market value at the time of such contribution as determined by the General
Partner pursuant to Article IX of the Agreement;

     (b) the initial Book Value of any asset that is Contributed Property as defined in Section
3.1(a) of the Agreement shall be the value set forth in Section 3.1(a) of the
Agreement;

     (c) the Book Value of all Partnership assets may be adjusted in the discretion of the General
Partner to equal their respective gross fair market values, as determined by the General Partner
pursuant to Article IX of the Agreement, at the times specified in Treasury Regulations
Section 1.704-1(b)(2)(iv)(f);

     (d) any adjustments to the adjusted basis of any asset of the Partnership pursuant to Section
734 or Section 743 of the Code shall be taken into account in determining such asset’s Book Value
in a manner consistent with Treasury Regulations Section 1.704-1(b)(2)(iv)(m);

     (e) the Book Value of any Partnership asset distributed or deemed distributed by the
Partnership to any Partner shall be adjusted immediately prior to such distribution to equal its
gross fair market value as of the date of distribution, as determined by the General Partner
pursuant to Article IX of the Agreement; and

A-1

 

     (f) if the Book Value of an asset has been determined pursuant to clauses (a),
(c) or (d) of this definition, to the extent permitted by the Treasury Regulations,
such Book Value shall thereafter be adjusted in the same manner as would the asset’s adjusted basis
for U.S. federal income tax purposes, except that depreciation and amortization deductions shall be
computed based on the asset’s Book Value as so determined, rather than on its adjusted tax basis.

     “Net Profits” and “Net Losses” mean, for any period, the taxable income or
loss, respectively, of the Partnership for such period, in each case as determined for U.S. federal
income tax purposes, but computed with the following adjustments:

     (a) items of income, gain, loss and deduction (including, without limitation, gain or loss on
the disposition of any Partnership asset and depreciation or other cost recovery deduction or
expense) shall be computed based upon the Book Value of the Partnership’s assets rather than upon
such assets’ adjusted bases for U.S. federal income tax purposes;

     (b) any tax-exempt income received by the Partnership shall be deemed for these purposes only
to be an item of gross income;

     (c) any expenditure of the Partnership described in Section 705(a)(2)(B) of the Code (or
treated as described therein pursuant to Treasury Regulations under Section 704(b) of the Code)
shall be treated as a deductible expense;

     (d) there shall be taken into account any separately stated items under Section 702(a) of the
Code;

     (e) if the Book Value of any Partnership asset is adjusted pursuant to clauses (c) or
(e) of the definition of “Book Value” above, or pursuant to clause (d) of such
definition (but only to the extent the adjustment is attributable to a distribution of Investment
Proceeds not in liquidation of a Partner’s Partnership interest), the amount of such adjustment
shall be taken into account in the period of adjustment as gain or loss from the disposition or
deemed disposition of such asset for purposes of computing Net Profits and Net Losses; and

     (f) items of income, gain, loss, deduction or credit allocated pursuant to Section A-6
of this Appendix A shall not be taken into account.

     “Tax Matters Partner” has the meaning set forth in Section A-6.

A-2 Maintenance of Capital Accounts

     (a) A Capital Account shall be maintained for each Partner in accordance with Section 704(b)
of the Code and Treasury Regulations Sections 1.704-1(b) and 1.704-2. The initial balance of each
Capital Account shall be equal to such Partner’s initial capital contribution to the Partnership.

A-2

 

     (b) The Capital Account of each Partner shall be increased by (i) the amount of any cash
contributed by such Partner to the capital of the Partnership, (ii) in the case of any property
contributed by such Partner to the capital of the Partnership, the Book Value of such property (net
of liabilities that the Partnership is considered to assume or take the property subject to) when
contributed, (iii) the amount of any liabilities of the Partnership that are assumed by such
Partner (except for liabilities described in Section A-2(c)(ii) of this Appendix A
that are assumed by such Partner) for purposes of Treasury Regulations Section
1.704-1(b)(2)(iv)(c), (iv) the Net Profits allocated to such Partner, and (v) any gross income and
gain allocated to such Partner.

     (c) The Capital Account of each Partner shall be decreased by (i) the amount of any cash
distribution to such Partner when made, (ii) the Book Value of any property distributed to such
Partner by the Partnership (net of liabilities that the Partner is considered to assume, or take
property subject to) when distributed, (iii) the amount of any liabilities of such Partner that are
assumed by the Partnership (except for liabilities described in Section A-2(b)(ii) of this
Appendix A that are assumed by the Partnership) for purposes of Treasury Regulations
Section 1.704-1(b)(2)(iv)(c), (iv) the Net Losses allocated to such Partner, and (v) any gross
deductions and loss allocated to such Partner.

     (d) In the event that all or a portion of an interest in the Partnership is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent such Capital Account relates to the Transferred Partnership interest.

     (e) The Capital Account of each Partner shall be adjusted to reflect any adjustment to the
Book Value of the Partnership’s assets attributable to the application of Section 734 of the Code
in respect of a distribution in liquidation of such Partner’s Partnership interest to the extent
required pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

     (f) It is the intention of the parties that the Capital Accounts of the Partners be kept in
the manner required under Section 704(b) of the Code and Treasury Regulations Sections 1.704-1(b)
and 1.704-2. To the extent any additional adjustment to the Capital Accounts is required by such
provisions, the General Partner is hereby authorized to make such adjustment after notice to the
Partners.

     (g) Except as expressly required herein, no Partner shall be required to restore any negative
balance in its Capital Account. No allocation to any Partner of any loss or deduction, whether
attributable to depreciation or otherwise, shall create any obligation of that Partner to the
Partnership or any other Partner, even if the allocation reduces such Partner’s Capital Account or
creates or increases a deficit in its Capital Account.

A-3

 

A-3 Allocations of Profits and Losses

     (a) After the application of Section A-4, Net Profits and Net Losses for any taxable
year, or portion thereof, shall be allocated among the Partners (and credited or debited to their
Capital Accounts) in such manner so that, after taking into account distributions by the
Partnership and contributions made to the Partnership through the end of such taxable year and the
allocations of Net Profits and Net Losses for such taxable year, (i) the respective positive
Capital Account balances of the Partners would correspond as closely as possible to the amount
each Partner would receive as a cash distribution pursuant to Article IV of the Agreement,
if the Partnership were to liquidate completely immediately after the end of such taxable year and
(ii) any resulting deficit Capital Account balances of the Partners would correspond as closely as
possible with the manner in which economic responsibility for Partnership deficit balances (as
determined in accordance with the principles of Treasury Regulations under Section 704 of the Code)
would be borne by the Partners under the terms of this Agreement if the Partnership were to
liquidate completely immediately after the end of such taxable year. For purposes of the preceding
sentence, the amount of cash to be distributed to each Partner, the amount of each Partner’s
Capital Account and the amount of each Partner’s economic responsibility for Partnership deficit
balances, upon the assumed liquidation, shall be computed by assuming that in connection with such
liquidation, the Partnership sold all of its assets for amounts such that no Net Profits or Net
Losses result from the sale and settled all of its liabilities for amounts such that no Net Profits
or Net Losses result from the settlement. For purposes of applying this Section A-3, the
Capital Account balance of each Partner shall be increased by such Partner’s share of “partnership
minimum gain” and “partner minimum gain” (within the meaning of and in accordance with the Treasury
Regulations under Section 704(b) of the Code). Subject to the other provisions of this
Appendix A, an allocation to a Partner of a share of Net Profit or Net Loss shall be
treated as an allocation of the same share of each item of income, gain, loss or deduction that is
taken into account in computing Net Profit or Net Loss.

     (b) If a Partner Transfers, acquires, or redeems an interest in the Partnership during a
taxable year, the Net Profit or Net Loss (and other items referred to in Section A-4 of
this Appendix A) attributable to such interest for such year shall be allocated between the
transferring Partner and the transferee (or the other Partners in the Partnership) by any method
permitted under Section 706 of the Code as selected by the General Partner.

A-4 Regulatory Allocations and Special Allocations

     (a) Notwithstanding any other provision of the Agreement or this Appendix A, (i)
“partner nonrecourse deductions” (as defined in Treasury Regulations Section 1.704-2(i)), if any,
of the Partnership shall be allocated for each period to the Partner that bears the economic risk
of loss within the meaning of Treasury Regulations Section 1.704-2(i), and (ii) “nonrecourse
deductions” (as defined in Treasury Regulations Section 1.704-2(b)) and “excess nonrecourse
liabilities” (as defined in Treasury Regulations Section 1.752-3(a)), if any, of the Partnership
shall be allocated to the Partners in accordance with their respective percentage interests in Net
Losses.

     (b) The Agreement and this Appendix A shall be deemed to include “qualified income
offset,” “minimum gain chargeback” and “partner nonrecourse debt minimum gain chargeback”
provisions within the meaning of Treasury Regulations under Section 704(b) of the Code.
Accordingly, notwithstanding any other provision of this Agreement or this Appendix A,
items of gross income shall be allocated to the Partners on a priority basis to the extent and in
the manner required by such provisions.

A-4

 

     (c) To the extent that Net Losses or items of loss or deduction otherwise allocable to a
Partner hereunder would cause such Partner to have an Adjusted Capital Account Deficit as of
the end of the taxable year to which such Net Losses or items of loss or deduction relate
(after taking into account the allocation of all items of income and gain for such taxable period),
such Net Losses or items of loss or deduction shall not be allocated to such Partner and instead
shall be allocated to the Partners in accordance with Section A-3 of the Agreement as if
such Partner were not a Partner.

     (d) Any allocations required to be made pursuant to clauses (a), (b), and
(c) above (the “Regulatory Allocations”) (other than allocations, the effect of
which are likely to be offset in the future by other special allocations) shall be taken into
account, to the extent permitted by the Treasury Regulations, in computing subsequent allocations
of income, gain, loss or deduction pursuant to Section A-3 so that the net amount of any
items so allocated and all other items allocated to each Partner shall, to the extent possible, be
equal to the amount that would have been allocated to each Partner pursuant to Section A-3
had such Regulatory Allocations under this Section A-4 not occurred.

     (e) If any Partner is treated for income tax purposes as realizing ordinary income because of
receipt of its Partnership interest (whether under Section 83 of the Code or any similar provisions
of any law, rule or regulations or any other applicable law, rule, regulation or doctrine) and the
Partnership is entitled to any offsetting deduction, the Partnership’s deduction shall be allocated
among the Partners in such manner as to, as nearly as possible, offset such ordinary income
realized by such Partner.

A-5 Tax Allocations

     (a) For federal income tax purposes, except as otherwise provided in this Section A-5,
each item of income, gain, loss, and deduction and credit shall be allocated among the Partners in
the same manner as its corresponding item of book income, gain, loss, deduction or credit is
allocated pursuant to this Appendix A.

     (b) In accordance with Sections 704(b) and 704(c) of the Code and the Treasury Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership asset contributed (or
deemed contributed) to the capital of the Partnership shall, solely for federal income tax
purposes, be allocated among the Partners so as to take into account any variation between the
adjusted basis of such Partnership asset for federal income tax purposes and its Book Value upon
its contribution (or deemed contribution). If the Book Value of any Partnership asset is adjusted,
subsequent allocations of taxable income, gain, loss and deduction with respect to such Partnership
asset shall take account of any variation between the adjusted basis of such Partnership asset for
federal income tax purposes and the Book Value of such Partnership asset in the manner prescribed
under Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder. The General Partner
shall select the manner by which variations between Book Value and adjusted basis are taken into
account in accordance with Code Sections 704(b) and 704(c) and the Treasury Regulations thereunder.

A-5

 

     (c) The provisions of this Appendix A (and other related provisions in the Agreement)
pertaining to the allocation of items of Partnership income, gain, loss, deduction, and credit
shall be interpreted consistently with the Treasury Regulations, and to the extent
unintentionally inconsistent with such Treasury Regulations, shall be deemed to be modified to
the extent necessary to make such provisions consistent with the Treasury Regulations.

A-6 Tax Matters Partner; Management Authority Regarding Tax and Accounting

     (a) The General Partner is designated the “Tax Matters Partner” (as defined in Section
6231(a)(7) of the Code) to manage administrative tax proceedings conducted at the partnership level
by the Internal Revenue Service with respect to Partnership matters. The General Partner is
specifically directed and authorized to take whatever steps the General Partner, in its sole
discretion, deems necessary or desirable to perfect such designation, including, without
limitation, filing any forms or documents with the Internal Revenue Service and taking such other
action as may from time to time be required under Treasury regulations. The Tax Matters Partner
shall have full authority to extend the statute of limitations and control any tax audit or other
proceeding on behalf of the Partnership. Expenses of administrative proceedings relating to the
determination of Partnership items at the Partnership level undertaken by the Tax Matters Partner
will be deemed to be Program Expenses.

     (b) All matters concerning (i) allocations of Net Profits and Net Losses and allocations for
tax purposes, (ii) distributions by the Partnership, including the taxes thereon, and (iii)
accounting procedures and determinations, tax determinations, determinations as to on whose behalf
expenses were incurred and the attribution of fees and expenses to a Program Asset, and other
determinations not specifically and expressly provided for by the terms of this Agreement, shall be
determined by the General Partner, whose determination shall be final and conclusive as to all the
Partners absent manifest clerical error.

     (c) At the General Partner’s sole discretion, the General Partner may cause the Partnership to
make or refrain from making any and all elections permitted by the Code and the Treasury
Regulations and any state, local, or foreign tax elections. Notwithstanding the foregoing, it is
intended that the Partnership be treated as a partnership for U.S. federal income tax purposes, and
neither the Partnership nor any Partner shall make any election inconsistent with such treatment
without the unanimous written consent of the Partners.

A-6

 

APPENDIX B: 

Apportionment and Modification of 

Carried Interest to IP Limited Partners

B-1 Definitions

     For purposes of this Appendix B, any capitalized term not defined herein shall have
the meaning set forth in the Agreement.

     “Acquisition Date” means, with respect to a Program Asset, the date the Partnership
first made an investment in such Program Asset (or in the case of a Program Asset that is
contributed to the Partnership, the date of such contribution).

     “Allocated Reimbursement Payments” means the amount of Reimbursement Payments
allocated by the General Partner to each Program Asset. Unless the General Partner adopts another
method (with notification to each other Partner), the General Partner shall allocate the
Reimbursement Payments made with respect to a particular year to and among the Program Assets held
by the Partnership during that year based on the relative Invested Capital in such Program Assets
and adjusted (on a weighted average basis) to take into account Program Assets that are held for
less than an entire year.

     “Carry Account” has the meaning set forth in Section B-3.

     “Carry Loss” means, with respect to the Realization of any Program Asset, 20% of the
amount, if any, by which the combined Investment Proceeds and Sponsor Proceeds generated by such
Program Asset are less than the sum of the Full Return Amount and the Hurdle Return Amount of such
Program Asset. The General Partner shall use its reasonable discretion in determining the amount
of Carry Loss (including adjusting previous allocations of Carry Loss) so as to cause the amount of
Carry Loss to accurately reflect the amount by which all Carry Distributions that will ultimately
be apportioned by the Partnership with respect to all other Program Assets will be reduced, which
determination shall then be binding on the Partnership and the Partners.

     “Carry Profit” means, with respect to any particular Program Asset, the amount by
which the Investment Proceeds or Sponsor Proceeds generated by that Program Asset produce or lead
to the production of Carry Distributions, as determined by the General Partner. In general, the
Carry Profit with respect to any Program Asset will equal the sum of the following amounts:

     (a) 0% of that portion of the combined Investment Proceeds and Sponsor Proceeds from such
Program Asset as does not exceed the sum of the applicable Full Return Amount and the applicable
Hurdle Return Amount;

     (b) 80% of that portion of the combined Investment Proceeds and Sponsor Proceeds that is in
excess of the sum of the applicable Full Return Amount and the applicable Hurdle Return Amount but
that is less than the sum of the applicable Full Return Amount and 133% of the applicable Hurdle
Return Amount; and

B-1

 

     (c) to the extent in excess of the sum of clauses (a) and (b) above, (i) 20%
of that portion of the Investment Proceeds that is in excess of the sum of the applicable Full
Return Amount plus (ii) 100% of any Sponsor Proceeds.

The General Partner shall use its discretion in determining the amount of Carry Profit (including
adjusting previous allocations of Carry Profit) so as to cause the amount of Carry Profit (net of
the allocated Carry Loss) to accurately reflect the amount of Carry Distributions that will
ultimately be distributed and that are allocable to each Program Asset.

     “Cause Event” means with respect to any IP Limited Partner,

     (a) any act or omission constituting gross negligence, willful misconduct, or fraud in the
performance of such IP Limited Partner’s duties or obligations as an employee of the Program
Manager;

     (b) any action or omission that causes there to be a material breach of any applicable
management agreement to which the Program Manager is a party;

     (c) any willful refusal to perform a duty as directed by Woodbridge or any of its subsidiaries
(including the General Partner) if such duty is within the scope of such IP Limited Partner’s
duties to the Program Manager, Woodbridge or any of its subsidiaries; or

     (d) any conviction of any crime constituting a felony in the jurisdiction involved (other than
a motor vehicle felony for which only a non-custodial penalty is imposed), whether or not involving
the Program Manager or the Partnership.

     “Full Return Amount” means, with respect to a Program Asset, the sum of (i) the
aggregate Invested Capital and (ii) the Allocated Reimbursement Payments, in each case
attributable to such Program Asset.

     “Hurdle Return Amount” means, with respect to a Program Asset, as of any date of
determination, the summation of an amount calculated on a daily basis through the applicable date
of determination equal to 10% per annum, compounded annually, of (i) the aggregate Invested Capital
and the Allocated Reimbursement Payments, in each case attributable to such Program Asset,
minus (ii) the aggregate amount of all Investment Proceeds attributable to such Program
Asset on or prior to such day.

     “Tenured Asset” means, with respect to any IP Limited Partner, any Program Asset
acquired by the Partnership during the period when such Person was an IP Limited Partner (and not a
Terminated IP Limited Partner) or any other Program Asset in which such Person has been granted a
Carry Percentage by the General Partner. For the avoidance of doubt, an IP Limited Partner will
not receive a Carry Percentage with respect to any asset that is not a Tenured Asset.

B-2

 

     “Terminated IP Limited Partner” means any IP Limited Partner whose employment with the
Woodbridge Employer is terminated for any reason, whether voluntarily or involuntarily, and with or
without cause. In the General Partner’s discretion, an IP Limited Partner whose employment with
the Woodbridge Employer is terminated contemporaneously with such IP Limited Partner becoming
employed by another entity within Woodbridge shall not be treated as
having been terminated, and the new employer shall become the Woodbridge Employer for purposes
of this definition. For purposes of this Agreement, in the case of any Family Related Partner, the
termination of employment with the Woodbridge Employer of the IP Limited Partner with whom such
Family Related Partner is associated shall cause such Family Related Partner to become a Terminated
IP Limited Partner.

     “Vested Percentage” means, with respect to an IP Limited Partner and each Program
Asset, that percentage to be applied in determining the amount of Carry Profit or Carry Loss to be
allocated to any IP Limited Partner as set forth in the vesting provisions in Section B-2.

     “Woodbridge Employer” means, with respect to any IP Limited Partner, the Program
Manager if the IP Limited Partner is an employee of the Program Manager. Otherwise it means the
entity within Woodbridge that is the employer of such IP Limited Partner.

B-2 Vesting Provisions 

     (a) Non-Tenured Assets. An IP Limited Partner will have a Vested Percentage of 0% in any
Program Asset that is not a Tenured Asset with respect to such Partner.

     (b) Tenured Assets. The Vested Percentage of an IP Limited Partner with respect to a Tenured
Asset will be as follows:

	 	(i)	 	Distributions or Realizations While Employed. An IP
Limited Partner will have a Vested Percentage of 100% in all Carry Profit or
Carry Loss attributable to any Investment Proceeds or Sponsor Proceeds received
by the Partnership from such Partner’s Tenured Assets, or any other
consequences of a Realization of a Tenured Asset, if those proceeds are
received or the Realization occurs prior to the IP Limited Partner becoming a
Terminated IP Limited Partner. For the avoidance of doubt, an IP Limited
Partner shall have a Vested Percentage of 100% in any Carry Loss associated
with an unreversed Impairment that arises on or prior to an IP Limited Partner
becoming a Terminated IP Limited Partner.
	 
	 	(ii)	 	Termination for Cause. An IP Limited Partner will have
a Vested Percentage of 0% in all Carry Profit or Carry Loss attributable to any
Investment Proceeds or Sponsor Proceeds received by the Partnership from such
IP Limited Partner’s Tenured Assets, or any other consequences of a Realization
of a Tenured Asset, if those proceeds are received or the Realization occurs
after such IP Limited Partner has become a Terminated IP Limited Partner
because of the occurrence of a Cause Event with respect to such IP Limited
Partner.
	 
	 	(iii)	 	Termination Not for Cause. An IP Limited Partner will
have a Vested Percentage of 75% in all Carry Profit or Carry Loss attributable
to any Investment Proceeds or Sponsor Proceeds received by the Partnership from
such IP Limited Partner’s Tenured Assets, or any other consequences of a
Realization of a Tenured Asset, if those proceeds are received or the
Realization occurs after such IP Limited Partner has become a Terminated
IP Limited Partner because (i) the Woodbridge Employer terminated the
employment for a reason other than the occurrence of a Cause Event with
respect to such IP Limited Partner or (ii) of the death, permanent
disability or legal incapacity of such IP Limited Partner.

B-3

 

	 	(iv)	 	Voluntary Resignation. An IP Limited Partner will have
a Vested Percentage as determined pursuant to the following sentence in all
Carry Profit or Carry Loss attributable to any Investment Proceeds or Sponsor
Proceeds received by the Partnership from such IP Limited Partner’s Tenured
Assets, or any other consequences of a Realization of a Tenured Asset, if those
proceeds are received or the Realization occurs after such IP Limited Partner
has become a Terminated IP Limited Partner because the IP Limited Partner
voluntarily left the employment of the Woodbridge Employer. For purposes of
this clause (iv), the Vested Percentage shall be determined separately
for each Program Asset and shall equal: (A) 25% upon the Acquisition Date of
such Program Asset, (B) an additional 12.5 percentage points per year upon each
of the first four anniversaries of the Acquisition Date, and (C) the remainder
when the Tenured Asset is Realized.

     (c) Permitted Modifications. Notwithstanding the foregoing, the General Partner may, after
consultation with the Program Manager, modify this vesting schedule for any additional IP Limited
Partner admitted to the Partnership pursuant to Section 7.5 of the Agreement, including
granting an additional IP Limited Partner the right to have a Vested Percentage in Program Assets
whose Acquisition Date preceded the time such additional IP Limited Partner was admitted to the
Partnership.

     (d) Permitted Adjustments. As described in Section B-3(b), the General Partner, in
its discretion, is permitted to make adjustments, including retroactive adjustments, to the
allocations of Carry Profit and Carry Loss. The ability of the General Partner to make these
adjustments shall not be restricted by the application of the vesting provisions in this
Section B-2.

     (e) Family Related Partner. A Family Related Partner’s Vested Percentage shall be equivalent
to the Vested Percentage of the IP Limited Partner associated with such Family Related Partner.

B-3 Determination of Carry Accounts

     (a) Maintenance of Carry Accounts. A separate bookkeeping account (a “Carry Account”)
shall be maintained for each IP Limited Partner. Immediately prior to the Partnership making any
Carry Distributions or upon the Realization of a Program Asset, the Carry Profit (or Carry Loss)
determined with respect to such distribution or Realization shall be credited (or debited, and, if
necessary, to an amount below zero) to the Carry Account of each IP Limited Partner in an amount
equal to such IP Limited Partner’s Carry Percentage in the Program Asset giving rise to such Carry
Profit (or Carry Loss) multiplied by such IP Limited Partner’s Vested Percentage in such Carry
Profit (or Carry Loss). An IP Limited Partner’s Carry Account shall be debited by the amount of
Carry Distributions made to such IP Limited Partner.

B-4

 

     (b) Adjustments to Carry Accounts. The General Partner, in its discretion, is permitted to
make adjustments, including retroactive adjustments, to the allocations of Carry Profit and Carry
Loss so that, on an aggregate basis the Carry Accounts of the IP Limited Partners more closely
match the aggregate rights of the IP Limited Partners to receive Carry Distributions or to make
clawback payments as provided in Article IV of the Agreement. Except to the extent the
General Partner determines otherwise (with notice to the other Partners), the General Partner
intends to cause any shortfall in the aggregate net Carry Profits (i.e., net of aggregate Carry
Losses) as compared to the aggregate amount of Carry Distributions (net of clawback payments)
distributable to the IP Limited Partners in accordance with Article IV of the Agreement to
be allocated on a pro rata basis to each Program Asset that otherwise produced Carry Profit (and
among them based on the relative amounts of Carry Profit).

     (c) Deemed Realization. Solely for purposes of determining an IP Limited Partner’s Carry
Account, the General Partner may, upon the admittance of a new Carried Interest Partner or at any
other time, deem there to have been a Realization of one or more Program Assets at the Fair Market
Value at such time of such Program Asset, in which case the deemed Carry Profit or Carry Loss
derived from such deemed Realization shall be allocated among the IP Limited Partners and charged
to the Carry Accounts of the IP Limited Partners. Any future actual or deemed Realization of a
Program Asset shall take into account the prior deemed Realization or Realizations.
Notwithstanding the foregoing, for purposes of determining an IP Limited Partner’s Vested
Percentage pursuant to Section B-2, such deemed Realizations shall be disregarded.

B-4 Distributions to the IP Limited Partners

     Subject to the holdback provisions of Section 4.5 of the Agreement, each IP Limited
Partner shall be entitled to receive an amount of Carry Distributions equal to the positive balance
in his Carry Account, provided that the sum of all of the Carry Distributions made to date
to the IP Limited Partners as a group cannot exceed the product of (A) the total Carry
Distributions made to date times (B) the aggregate Carry Percentages for all of the IP
Limited Partners (adjusted as necessary to take into account changes in Carry Percentages since the
formation of the Partnership). If the amount of Carry Distributions to be made to the IP Limited
Partners as a group is insufficient to reduce the positive Carry Account balances of all IP Limited
Partners to zero, then Carry Distributions made to the IP Limited Partners as a group will be made
pro rata among the IP Limited Partners based on their relative Carry Account balances. If the
amount of Carry Distributions to be made to the IP Limited Partners exceeds the aggregate positive
Capital Account balances of the IP Limited Partners, such excess shall be distributed among the IP
Limited Partners in the manner that the General Partner determines most appropriately reflects the
IP Limited Partners’ relative Carry Percentages (as adjusted by the Vested Percentages) in the
Program Assets giving rise to the Carry Distributions.

B-5 Responsibility for Gross Clawback Amount

     Each IP Limited Partner shall be responsible (only to the extent of Section 4.6(c) of
the Agreement) for a portion of the Gross Clawback Amount equal to the negative balance, if any, in
such IP Limited Partner’s Carry Account as of the final liquidating distribution of assets of the
Partnership pursuant to Section 8.2 of the Agreement.

B-6 83(b) Election

     Each Carried Interest Partner shall make a timely election under Section 83(b) of the Code
with respect to such Carried Interest Partner’s interest in the Partnership.

B-5EX-10.1

Exhibit 10.1

AGREEMENT

     THIS AGREEMENT is made and entered into as of March 17, 2009 (“Agreement”) by and among Regent
Communications, Inc.(“Regent”), Riley Investment Management LLC (“RIM”), and Riley Investment
Partners Master Fund, L.P.(“RIP”).

     For purposes of this Agreement, the term “Company” shall mean Regent and all of its
affiliates, the term “Riley” shall mean RIM, RIP and all of their respective affiliates, and the
term “affiliates” shall mean any officer, director, employees, investment advisory clients,
attorney, agent, assignee, predecessor, successor, parent, subsidiary, affiliate, division, or
related company.

     WHEREAS, John J. Ahn, a member of Regent’s Board of Directors and member of the Board’s
Nominating and Corporate Governance Committee, has informed Regent that because of its
dissatisfaction with Board leadership, Riley would commence a proxy fight unless Regent’s Board
would remove William P. Sutter, Jr. as Chairman of the Board and not nominate Mr. Sutter for
re-election to the Board of Directors at the 2009 Annual Meeting of Stockholders currently
scheduled for June 3, 2009. Mr. Ahn currently serves on Regent’s Board of Directors as one of
Riley’s designees pursuant to the terms of the September 14, 2007 Settlement Agreement among
Regent, Riley, Mr. Ahn and certain other parties; and

     WHEREAS, the parties to this Agreement mutually agree that it is in their respective best
interests and in the best interests of Regent and Regent’s stockholders to avoid the time, costs,
and disruptions that a potential proxy contest may cause the parties in connection with the 2009
Annual Meeting, to revise the composition of Regent’s Board of Directors, and to agree on certain
related matters, all as set forth in this Agreement;

     NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and
agreements set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE I. COMPOSITION OF BOARD AND BOARD COMMITTEES

     1.1 Board Size. In accordance with Regent’s bylaws and as recommended by the Board’s
Nominating and Corporate Governance Committee, Regent’s Board of Directors will vote to set the
number of Directors to serve on the Board at six commencing at the earlier of the resignation of
William P. Sutter, Jr. from the Board or in connection with the election of Directors at the 2009
Annual Meeting of the Company’s Stockholders currently scheduled for June 3, 2009 and continuing
thereafter until such time as the Board may take further action to either increase or decrease the
size of the Board.

     1.2 Director Nominees. In connection with the Company’s 2009 Annual Meeting of
Stockholders and as recommended by the Board’s Nominating and Corporate Governance Committee,
Regent’s Board will nominate all of the Company’s incumbent directors as of the date of this
Agreement, other than William P. Sutter, Jr. for re-election to the Board.

 

 

     1.3 Board Chairman. As recommended by the Board’s Nominating and Corporate Governance
Committee, Regent’s Board will appoint John H. Wyant as the Chairman of the Board effective
immediately upon the taking of such Board action.

     1.4 Effect of Failure to Satisfy Sections 1.2 and 1.3. If the actions contemplated by
Sections 1.2 and 1.3 above are not taken on or before 5:30 p.m., Cincinnati time, on March 17,
2009, then this Agreement shall be null and void.

ARTICLE II. MEETINGS OF REGENT’S STOCKHOLDERS

     2.1 No Change in Bylaws as to Special Meetings. Unless approved by a majority of the
Board, including the approval of at least one of Messrs. Ahn and DeLorenzo, the Board shall not
amend Regent’s bylaws with respect to calling a special meeting of stockholders. This restriction
from amending Regent’s bylaws relating to calling a special meeting will continue for two months
after no designees of Riley serve on Regent’s Board; provided, that, any amendment to Regent’s
bylaws shall not apply retroactively to a special meeting that is validly called prior to the end
of such two month period.

     2.2 Limitations as to 2009 Annual Meeting and Future Special Meetings of Stockholders.
Without the consent of a majority of the then current members of Regent’s Board (it being
understood and agreed that a 3-3 vote does not constitute a majority), Riley agrees that it will
not call for any special meeting of Regent’s stockholders and will not nominate any person for
election to Regent’s Board at Regent’s 2009 Annual Meeting of Stockholders or at any special
meeting of Regent’s stockholders other than as contemplated by Section 1.2 above, or to form or
join a group or act in concert with any person or entity to change the composition of the Board,
through December 31, 2009; provided, that, for the avoidance of doubt, the foregoing shall not
restrict any vote or actions by Mr. Ahn or by John F. DeLorenzo (Riley’s other designee currently
serving as a Regent director) in their capacity as directors of Regent (including on the Nominating
and Corporate Governance Committee) and Riley and Messrs. Ahn and DeLorenzo shall not be restricted
from voting any shares of, or giving a proxy or executing a written consent with respect to, their
Regent stock in response to a request from a third party that is not part of a group, as defined in
Rule 13d-1, of which Riley, Mr. Ahn or Mr. DeLorenzo is also a member, and such actions shall not
in and of itself be deemed to be acting in concert with the person or persons requesting the vote,
proxy or written consent. Notwithstanding the foregoing, the restrictions set forth in this Section
2.2 shall terminate at any time that the Company breaches any of its covenants set forth in Article
I or Section 2.1 hereof, nor shall the restrictions set forth in this Section 2.2 apply to any
attorney or agent of Riley who is not subject to the direct or indirect control of Riley.

ARTICLE III. ADDITIONAL AGREEMENTS

     3.1 Public Disclosures. Promptly following the execution of this Agreement, Regent
will prepare and issue a press release announcing the entry into this Agreement, which press
release shall be mutually agreeable to all parties hereto (the “Press Release”). Regent also will
promptly file a Form 8-K with the Securities and Exchange Commission to which this

 

 

Agreement and
the Press Release will be attached as exhibits. This Agreement and the Press Release may be filed
as an exhibit to any amendment required to be filed under Section 13(d) of the Securities Exchange
Act of 1934, as amended, to any Schedule 13Ds filed by Riley. None of the parties hereto will make
any public statements regarding this Agreement and related matters that are inconsistent with or
contrary to the statements in the Press Release. Any statement otherwise prohibited by this
Section 3.1 may nevertheless be made without violating this Agreement if such statement is either
required by applicable law, rule or regulation or is required to be made by the person seeking to
make such statement in order to comply with such party’s fiduciary duties to Regent or its
stockholders, in each case as reasonably determined by such person based on the advice of outside
counsel and upon reasonable prior notice to the parties hereto of the nature of the statement and
the basis pursuant to which it is required to be made.

     3.2 Expiration of Covenants and Restrictions. Except as otherwise specifically
provided in this Agreement, unless this Agreement becomes null and void pursuant to Section 1.4,
all covenants and restrictions set forth herein shall lapse and be of no further effect as of 11:59
p.m. on December 31, 2009, Cincinnati time.

     3.3 References to Riley Designees. All references in this Agreement to either Mr. Ahn
or Mr. DeLorenzo, also shall mean any other person designated by Riley and approved by Regent’s
Board to serve as a Director of Regent.

ARTICLE IV. MISCELLANEOUS

     4.1 Binding Agreement. Each term of this Agreement is binding upon the parties hereto
and their respective predecessors, successors, transferees, permitted assignees, insurers, and
reinsurers. If any provision of this Agreement shall be deemed or declared to be unenforceable,
invalid or void, such provision shall not impair any other provision of this Agreement. It is
hereby expressly understood and agreed that the terms of this Agreement are contractual and not
merely recitals.

     4.2 Complete Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto in respect of all matters contained in this Agreement, and
supersedes all prior and/or contemporaneous oral or written agreements, representations or
understandings of any nature. There are no unwritten agreements or understandings between the
parties.

     4.3 Authority. Each of the parties hereto acknowledges and represents that it has the
full power, authority and capacity to enter into this Agreement and that the person(s) signing this
Agreement on its behalf has the full power, capacity and authority to do so. Each party hereby
represents that it has read the foregoing Agreement, presented it to competent legal counsel for
review, fully understands it, and has executed it voluntarily with full knowledge of its legally
binding effect.

     4.4 Governing Law; Jurisdiction. This Agreement shall be interpreted under and in
accordance with the laws of the State of Delaware without regard to its conflicts of law

 

 

provisions. Each of the parties hereto agrees that any action or proceeding relating to or arising
out of this Agreement shall be adjudicated exclusively in the courts located in Delaware.

     4.5 Injunctive Relief. The parties agree that in the event of any actual or
threatened breach by any other party of any of the provisions contained in this Agreement, the
non-breaching parties shall be entitled to seek immediate temporary injunctive and other equitable
relief, without the necessity of showing actual monetary damages, subject to hearing as soon
thereafter as possible. Nothing contained herein shall be construed as prohibiting any party from
pursuing any other remedies available to it for such breach or threatened breach, including the
recovery of any damages which it is able to prove.

     4.6 Amendment. This Agreement may be amended or modified only by a written instrument
duly executed by all of the parties hereto.

     4.7 Successors and Assigns. This Agreement shall not be assigned or transferred to
any third party without the prior express written consent of all of the parties. Any permitted
assignment or transfer of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns and legal representatives.

     4.8 Section Headings. Section headings are inserted herein for convenience only and
shall not affect any construction or interpretation of this Agreement.

     4.9 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but one and the same
instrument.

     IN WITNESS WHEREOF, the parties, each individually or through their duly authorized
representative, have executed this Agreement as of the date first set forth above.

	 	 	 	 	 
	 	REGENT COMMUNICATIONS, INC.

 	 
	 	By:  	/s/ WILLIAM L. STAKELIN
 	 
	 	 	Name:  	William L. Stakelin 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	RILEY INVESTMENT PARTNERS MASTER FUND, L.P.

By:   Riley Investment Management LLC, the General Partner

 	 
	 	By:  	/s/ JOHN J. AHN
 	 
	 	 	Name:  	John J. Ahn 	 
	 	 	Title:  	Principal 	 

 

 

	 	 	 	 	 
	 	RILEY INVESTMENT MANAGEMENT LLC

 	 
	 	By:  	/s/ JOHN J. AHN
 	 
	 	 	Name:  	John J. Ahn 	 
	 	 	Title:  	Principal

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