From: "Jeffrey E." <[email protected]>

From: "Jeffrey E." <[email protected]> To: Ada Clapp Subject: Re: Art Partnership Date: Mon, 24 Nov 2014 18:18:29 +0000 i agree On Man, Nov 24, 2014 at 2:13 PM, Ada Clapp G Jeffrey, > wrote: I spoke with Alan regarding the plan we discussed this morning, as follows: 1. First, Narrows Holdings LLC ("Narrows I") will be restructured to provide for Managing Member interests and Non-Managing Member interests. LDB will be the sole Managing Member and Non-Managing Member of Narrows I. 2. Next we would then create a new Partnership called Narrows Holdings III ("Narrows III"). Narrows I will be the General Partner and will contribute all its art to Narrows III. The limited partners of Narrows III will be LDB, the APOI Agreement and APO2 Declaration. 3. The Limited Partnership Agreement for Narrows III will provide that an officer or authorized person (to be named) determines who can use partnership property (presumably at no charge). Alan is concerned that, if an authorized person, with no equity right, has the power to determine who could use the Narrows III partnership property, Leon's foregoing that control (over the assets that were formerly in Narrows I) may be a lapse of a voting power under Section 2704(a). This, as you may know, would result in a very large deemed gift. To avoid this possibility, Alan recommends that Narrows III be structured with two general partnership interests, with equity attached to both (say, 1% combined). One GP interest (Class A) would control investments, while the other (Class B) will control use, distributions and liquidation. Upon formation, Leon or Narrows I would hold the Class A GP interest and Leon would own the Class B GP interest. Leon would then sell the Class B GP interests to a trust, with respect to which Leon would be able to remove and replace the trustee. (We can create a new trust, with the appropriate trustee; and that trust could be funded via a decanting from APO' or APO2.) In Alan's view, this approach not only deals with the potential 2704(a) lapse, but strengthens the argument that 2036 should not apply. Please let us know what you think. Thanks. Ada Clapp EFTA01001590 Chief Legal Officer Elysium Management LLC 445 Park Avenue Suite 1401 New York, New York 10022 Email: This communication and any attachment is for the intended recipient(s) only and may contain information that is privileged, confidential and/or proprietary. If you are not the intended recipient, you are hereby notified that further dissemination of this communication and its attachments is prohibited. Please delete all copies of this communication and its attachments and notify me immediately that you have received them in error. Thank you. please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to [email protected], and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved EFTA01001591