ART ENTITY: TERM SHEET

ART ENTITY: TERM SHEET I. Form A. LLC B. Amended and Restated Narrows Holdings LLC C. Subject to working out loan/pledge arrangements (alternative: Amended and Restated Narrows Holdings II LLC and fund with art not pledged) II. Governance A. Manager: APO I Trust, by its Trustees 1. Distribution 2. Use 3. Liquidation 4. Appoints/oversees officers and committee members B. Officers 1. Chief Art Officer: Leon 2. Chief Financial Officer: Leon 3. Treasurer: Eileen 4. Secretary: Diana C. Committees 1. Art Acquisition and Sales: Leon (and Diana and one or more children?) 2. Financial Investments: Leon (and Eileen? Barry Cohen?) D. Removal, Replacement and Succession 1. As to Manager, by majority in interest; provided if Leon participates, successor may not be related or subordinate 2. Manager can remove officers and committee members 3. Note that Leon has power to remove and replace APO 1 Trustees and therefore the Manager Does: USI:9534405v4 EFTA01202868 3 III. Process for Purchasing or Selling Art A. Chief Art Officer has authority to purchase and sell art B. Acquisition and Sales Committee (with Chief Art Officer as Chair), provides to Manager and Members: 1. Annual reports describing purchases and sales, art investment policy statements and overview of current art market 2. Quarterly reports, including schedule of purchases and sales IV. Funding LLC/Contributions of Capital A. Need to identify works to be contributed/works not to be contributed (The Scream?), subject to working out loan/pledge agreements B. Other Contributions: 1. APO1 to contribute its interest in the LDB 2011 LLC (which, in turn, owns art, interests in investment partnerships and an interest in PLB LLC) 2. APO2 to contribute its interest in PLB LLC 3. GST Exempt Trust under the Black Family 1997 Trust to contribute its interest in PLB LLC 4. Cash/financial assets (for initial operating expenses) C. Acquisitions 1. Chief Financial Officer (Leon) makes determination regarding sufficiency of assets 2. If assets are insufficient, Chief Financial Officer makes recommendation to Manager for capital call 3. Manager decides whether to make capital call D. Additional Funding/Capital Calls for: 1. Servicing any LLC debt (e.g., bank loans) 2. Employee compensation/benefits 3. Insurance of LLC assets 4. Storage/care and maintenance of LLC assets Does: USI:9534405v4 EFTA01202869 3 V. Members A. Leon B. APOI and APO2 C. Black Family 1997 GST Exempt Trust VI. Withdrawal Rights/Transfers A. No withdrawals without consent of Manager B. Limited transferability to family members and trusts VII. Use of Art A. By Members B. For exhibition, to enhance value C. As collateral for loans made to the LLC D. No rent, but subject to use agreement, if Leon/Debra use property while both are living and married; otherwise rent would be warranted unless use among members is consistent with relative membership interests E. By beneficiaries of Members (e.g., Debra and children), subject to use agreement VIII. Tax Status A. Initially, disregarded entity B. Consider making it a partnership prior to substitution or sale of LLC interests Doug: USI:9534405v4 EFTA01202870