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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2019
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
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Delaware
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20-8875684
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Class A Common Stock
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BX
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New York Stock Exchange
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Large accelerated filer
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Accelerated filer
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Non-accelerated
filer
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Smaller reporting company ☐
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Emerging growth company ☐
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Page
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Item 1.
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5
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Item 1A.
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17
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Item 1B.
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68
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Item 2.
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68
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Item 3.
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68
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Item 4.
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69
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Item 5.
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70
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Item 6.
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72
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Item 7.
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74
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Item 7A.
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131
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Item 8.
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135
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Item 8A.
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211
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Item 9.
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213
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Item 9A.
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213
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Item 9B.
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214
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Item 10.
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215
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Item 11.
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221
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Item 12.
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241
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Item 13.
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244
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Item 14.
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25
2
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Item 15.
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253
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Item 16.
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265
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266
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(a) |
the fair value of the investments held by our carry funds and our
side-by-side
and
co-investment
entities managed by us, plus (1) the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, or (2) for certain credit-focused funds the amounts available to be borrowed under asset based credit facilities,
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(b) |
the net asset value of (1) our hedge funds and real estate debt carry funds, BPP, certain
co-investments
managed by us, certain credit-focused funds, and our Hedge Fund Solutions drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, and BREIT,
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(c) | the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts, |
(d) | the amount of debt and equity outstanding for our collateralized loan obligations (“CLO”) during the reinvestment period, |
(e) | the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period, |
(f) | the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies, and |
(g) | the fair value of common stock, preferred stock, convertible debt, or similar instruments issued by BXMT. |
(a) | for our Private Equity segment funds and Real Estate segment carry funds including certain BREDS and Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund, |
(b) | for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund, |
(c) |
the remaining invested capital or fair value of assets held in
co-investment
vehicles managed by us on which we receive fees,
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(d) |
the net asset value of our funds of hedge funds, hedge funds, BPP, certain
co-investments
managed by us, certain registered investment companies, BREIT, and certain of our Hedge Fund Solutions drawdown funds,
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(e) | the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts, |
(f) | the net proceeds received from equity offerings and accumulated core earnings of BXMT, subject to certain adjustments, |
(g) | the aggregate par amount of collateral assets, including principal cash, of our CLOs, and |
(h) | the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies. |
• |
The investment adviser of each of our
non-EEA
domiciled carry funds and the AIFM of each of our EEA domiciled carry funds generally receives an annual management fee based on a percentage of the fund’s capital commitments, invested capital and/or undeployed capital during the investment period and the fund’s invested capital or investment fair value after the investment period, except that the investment adviser or AIFM to certain of our credit-focused, BPP and BCEP funds receives a management fee based on a percentage of invested capital or net asset value. These management fees are payable on a regular basis (typically quarterly) in the contractually prescribed amounts over the life of the fund. Depending on the base on which management fees are calculated, negative performance of one or more investments in the fund may reduce the total management fee paid for the relevant period, but not the fee rate. Management fees received are not subject to clawback.
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• | The investment adviser of each of our funds that are structured like hedge funds, or of our funds of hedge funds, registered mutual funds and separately managed accounts that invest in hedge funds, generally receives a management fee based on a percentage of the fund’s or account’s net asset value. These management fees are payable on a regular basis (typically quarterly). These funds generally permit investors to withdraw or redeem their interests periodically, in some cases following the expiration of a specified period of time when capital may not be withdrawn. Decreases in the net asset value of investor’s capital accounts may reduce the total management fee paid for the relevant period, but not the fee rate. Management fees received are not subject to clawback. In addition, to the extent the mandate of our funds is to invest capital in third party managed funds, as is the case with our funds of hedge funds, our funds will be required to pay management fees to such third party managers, which typically are borne by investors in such investment vehicles. |
• | The investment adviser of each of our CLOs typically receives annual management fees based on a percentage of each fund’s assets, subject to certain performance measures related to the underlying assets the vehicle owns, and additional management fees, which are incentive-based (that is, subject to meeting certain return criteria). These management fees are payable on a regular basis (typically quarterly). The term of each CLO varies from deal to deal and may be subject to early redemption or extension; typically, however, a CLO will be wound down within eight to eleven years of being launched. The amount of fees will decrease as the fund deleverages toward the end of its term. |
• | The investment adviser of each of our separately managed accounts generally receives annual management fees based on a percentage of each account’s net asset value or invested capital. The management fees we receive from each of our separately managed accounts are generally paid on a regular basis (typically quarterly) such management fees are generally subject to contractual rights the investor has to terminate our management of an account on generally as short as 30 days’ notice. |
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The investment adviser of each of our credit-focused registered and
non-registered
investment companies typically receives an annual management fee based on a percentage of net asset value or total managed assets. The management fees we receive from the registered investment companies we manage are generally paid on a regular basis (typically quarterly). Such management fees are generally subject to contractual rights the company’s board of directors has to terminate our management of an account on as short as 30 days’ notice.
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The investment adviser of BXMT receives an annual management fee, paid quarterly, based on a percentage of BXMT’s net proceeds received from equity offerings and accumulated “core earnings” (which is generally equal to its net income, calculated under generally accepted accounting principles in the U.S. (“GAAP”), excluding certain
non-cash
and other items), subject to certain adjustments.
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• | The investment adviser of BREIT receives a management fee based on a percentage of the REIT’s net asset value, payable monthly. |
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In our Hedge Fund Solutions segment, the investment adviser of our funds of hedge funds, certain hedge funds, separately managed accounts that invest in hedge funds and certain
non-U.S.
registered investment companies, is entitled to an incentive fee of 0% to 20%, as applicable, of the applicable investment vehicle’s net appreciation, subject to “high water mark” provisions and in some cases a preferred return. In addition, to the extent the mandate of our funds is to invest capital in third party managed hedge funds, as is the case with our funds of hedge funds, our funds will be required to pay incentive fees to such third party managers, which typically are borne by investors in such investment vehicles.
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• | The general partners or similar entities of each of our real estate and credit hedge fund structures receive incentive fees of generally up to 20% of the applicable fund’s net capital appreciation per annum. |
• | The investment manager of BXMT receives an incentive fee generally equal to 20% of BXMT’s core earnings in excess of a 7% per annum return on stockholder’s equity (excluding stock appreciation or depreciation), provided that BXMT’s core earnings over the prior three years is greater than zero. |
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The investment manager of BREIT receives an incentive fee of 12.5% of BREIT’s total return, subject to a 5% hurdle amount with a
catch-up
and recouping any loss carryforward amounts, payable annually.
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The general partner of certain open-ended BPP funds is entitled to an incentive fee allocation of generally 10% of net profit, subject to a hurdle amount generally of 6% to 7%, a loss recovery amount and a
catch-up.
Incentive Fees for these funds are generally realized every three years from when a limited partner makes its initial investment.
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Item 1A.
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Risk Factors
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• | economic slowdown in the U.S. and internationally; |
• | changes in interest rates and/or a lack of availability of credit in the U.S. and internationally; |
• | commodity price volatility; and |
• | changes in law and/or regulation, and uncertainty regarding government and regulatory policy. |
• | a number of our competitors in some of our businesses have greater financial, technical, marketing and other resources and more personnel than we do, |
• | some of our funds may not perform as well as competitors’ funds or other available investment products, |
• | several of our competitors have significant amounts of capital, and many of them have similar investment objectives to ours, which may create additional competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that many alternative investment strategies seek to exploit, |
• | some of our competitors, particularly strategic competitors, may have a lower cost of capital, which may be exacerbated to the extent potential changes to the Internal Revenue Code limit the deductibility of interest expense, |
• | some of our competitors may have access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment opportunities, |
• | some of our competitors may be subject to less regulation and accordingly may have more flexibility to undertake and execute certain businesses or investments than we can and/or bear less compliance expense than we do, |
• | some of our competitors may have more flexibility than us in raising certain types of investment funds under the investment management contracts they have negotiated with their investors, |
• | some of our competitors may have higher risk tolerances, different risk assessments or lower return thresholds, which could allow them to consider a wider variety of investments and to bid more aggressively than us for investments that we want to make, |
• | some of our competitors may be more successful than us in the development and implementation of new technology to address investor demand for product and strategy innovation, particularly in the hedge fund industry, |
• | there are relatively few barriers to entry impeding new alternative asset fund management firms, and the successful efforts of new entrants into our various businesses, including former “star” portfolio managers at large diversified financial institutions as well as such institutions themselves, is expected to continue to result in increased competition, |
• | some of our competitors may have better expertise or be regarded by investors as having better expertise in a specific asset class or geographic region than we do, |
• | our competitors that are corporate buyers may be able to achieve synergistic cost savings in respect of an investment, which may provide them with a competitive advantage in bidding for an investment, |
• | some investors may prefer to invest with an investment manager that is not publicly traded or is smaller with only one or two investment products that it manages, and |
• | other industry participants will from time to time seek to recruit our investment professionals and other employees away from us. |
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Immigration reform has been a continued area of focus for the Trump administration. Although the details and timing of potential changes to immigration law are difficult to predict, restrictions on the ability of individuals from certain countries to obtain
non-immigrant
visas or limitations on the number of individuals eligible for U.S. work visas may make it more difficult for current and future portfolio companies to recruit and retain skilled foreign workers and may increase labor and compliance costs.
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• | Effective for months beginning after December 31, 2018, the Tax Reform Bill provides for the repeal of the provision of the Patient Protection and Affordable Care Act (“ACA”), which requires certain individuals without minimum health coverage to pay a penalty. This repeal and other measures being pursued by the Trump administration could result in an increase in the size of the uninsured population or a reduction in funds presently available to patients as a result of the repeal of this provision or the potential repeal of other significant portions of the ACA could adversely affect multiple businesses in the healthcare industry, including pharmaceutical companies that benefit from purchases by individuals covered by government-subsidized insurance, hospitals that may be required to increase write-offs for bad debt resulting from the inability of insured patients to pay for care and insurance companies that have developed effective plans for participating in healthcare exchanges. Further, one court has ruled that the ACA is unconstitutional, but stayed that decision pending resolution of an appeal. If that decision is not reversed on appeal, that could exacerbate the types of adverse developments that are described above. |
• | we may create new funds in the future that reflect a different asset mix and different investment strategies, as well as a varied geographic and industry exposure as compared to our present funds, and any such new funds could have different returns from our existing or previous funds, |
• | despite periods of volatility, market conditions have been largely favorable in recent years, which has helped to generate positive performance, particularly in our private equity and real estate businesses, but there can be no assurance that such conditions will repeat or that our current or future investment funds will avail themselves of comparable market conditions, |
• | the rates of returns of our carry funds reflect unrealized gains as of the applicable measurement date that may never be realized, which may adversely affect the ultimate value realized from those funds’ investments, |
• | competition for investment opportunities resulting from, among other things, the increased amount of capital invested in alternative investment funds continues to increase, |
• | our investment funds’ returns in some years benefited from investment opportunities and general market conditions that may not repeat themselves, our current or future investment funds might not be able to avail themselves of comparable investment opportunities or market conditions, and the circumstances under which our current or future funds may make future investments may differ significantly from those conditions prevailing in the past, |
• | newly established funds may generate lower returns during the period in which they initially deploy their capital, and |
• | the rates of return reflect our historical cost structure, which may vary in the future due to various factors enumerated elsewhere in this report and other factors beyond our control, including changes in laws. |
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give rise to an obligation to make mandatory
pre-payments
of debt using excess cash flow, which might limit the entity’s ability to respond to changing industry conditions to the extent additional cash is needed for the response, to make unplanned but necessary capital expenditures or to take advantage of growth opportunities,
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• | limit the entity’s ability to adjust to changing market conditions, thereby placing it at a competitive disadvantage compared to its competitors who have relatively less debt, |
• | allow even moderate reductions in operating cash flow to render it unable to service its indebtedness, leading to a bankruptcy or other reorganization of the entity and a loss of part or all of the equity investment in it, |
• | limit the entity’s ability to engage in strategic acquisitions that might be necessary to generate attractive returns or further growth, and |
• | limit the entity’s ability to obtain additional financing or increase the cost of obtaining such financing, including for capital expenditures, working capital or general corporate purposes. |
• | currency exchange matters, including fluctuations in currency exchange rates and costs associated with conversion of investment principal and income from one currency into another, |
• | less developed or efficient financial markets than in the United States, which may lead to potential price volatility and relative illiquidity, |
• | the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and less government supervision and regulation, |
• | changes in laws or clarifications to existing laws that could impact our tax treaty positions, which could adversely impact the returns on our investments, |
• | a less developed legal or regulatory environment, differences in the legal and regulatory environment or enhanced legal and regulatory compliance, |
• |
heightened exposure to corruption risk in
non-U.S.
markets,
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• | political hostility to investments by foreign or private equity investors, |
• | reliance on a more limited number of commodity inputs, service providers and/or distribution mechanisms, |
• | higher rates of inflation, |
• | higher transaction costs, |
• | difficulty in enforcing contractual obligations, |
• |
fewer investor protections and less publicly available information in respect of companies in
non-U.S.
markets,
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certain economic and political risks, including potential exchange control regulations and restrictions on our
non-U.S.
investments and repatriation of profits on investments or of capital invested, the risks of political, economic or social instability, the possibility of expropriation or confiscatory taxation and adverse economic and political developments, and
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the possible imposition of
non-U.S.
taxes or withholding on income and gains recognized with respect to such securities.
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• | the use of new technologies, including hydraulic fracturing, |
• | reliance on estimates of oil and gas reserves in the evaluation of available geological, geophysical, engineering and economic data for each reservoir, and |
• | encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, equipment failures and other accidents in completing wells and otherwise, cratering, sour gas releases, uncontrollable flows of oil, natural gas or well fluids, adverse weather conditions, pollution, fires, spills and other environmental risks. |
• | Ownership of infrastructure assets may present risk of liability for personal and property injury or impose significant operating challenges and costs with respect to, for example, compliance with zoning, environmental or other applicable laws. |
• | Infrastructure asset investments may face construction risks including, without limitation: (a) labor disputes, shortages of material and skilled labor, or work stoppages, (b) slower than projected construction progress and the unavailability or late delivery of necessary equipment, (c) less than optimal coordination with public utilities in the relocation of their facilities, (d) adverse weather conditions and unexpected construction conditions, (e) accidents or the breakdown or failure of construction equipment or processes; and (f) catastrophic events such as explosions, fires, terrorist activities and other similar events. These risks could result in substantial unanticipated delays or expenses (which may exceed expected or forecasted budgets) and, under certain circumstances, could prevent completion of construction activities once undertaken. Certain infrastructure asset investments may remain in construction phases for a prolonged period and, accordingly, may not be cash generative for a prolonged period. Recourse against the contractor may be subject to liability caps or may be subject to default or insolvency on the part of the contractor. |
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The operation of infrastructure assets is exposed to potential unplanned interruptions caused by significant catastrophic or force majeure events. These risks could, among other effects, adversely impact the cash flows available from investments in infrastructure assets, cause personal injury or loss of life, damage property, or instigate disruptions of service. In addition, the cost of repairing or replacing damaged assets could be considerable. Repeated or prolonged service interruptions may result in permanent loss of customers, litigation, or penalties for regulatory or contractual
non-compliance.
Force majeure events that are incapable of, or too costly to, cure may also have a permanent adverse effect on an investment.
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• | The management of the business or operations of an infrastructure asset may be contracted to a third party management company unaffiliated with us. Although it would be possible to replace any such operator, the failure of such an operator to adequately perform its duties or to act in ways that are in our best interest, or the breach by an operator of applicable agreements or laws, rules and regulations, could have an adverse effect on the investment’s financial condition or results of operations. Infrastructure investments may involve the subcontracting of design and construction activities in respect of projects, and as a result our investments are subject to the risks that contractual provisions passing liabilities to a subcontractor could be ineffective, the subcontractor fails to perform services which it has agreed to perform and the subcontractor becomes insolvent. |
• | BXLS’s strategies include, among others, investments that are referred to as “pharmaceutical corporate partnership” transactions. Pharmaceutical corporate partnership transactions are risk-sharing collaborations with large pharmaceutical partners on drug development programs and investments in royalty streams of |
pre-commercial
pharmaceutical products. BXLS’s ability to source pharmaceutical corporate partnership transactions has been, and will continue to be, in part dependent on the ability of three special purpose development companies to identify, diligence, negotiate and in many cases, take the lead in executing the agreed development plans with respect to, a pharmaceutical corporate partnership transaction. Moreover, as such special purpose development companies are jointly owned by us and two unaffiliated life sciences investors, we (and our funds) are not the sole beneficiaries of such sourcing strategies and capabilities of such special purpose development companies.
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• | Life sciences and healthcare companies are subject to extensive regulation by the U.S. Food and Drug Administration, similar foreign regulatory authorities and, to a lesser extent, other federal and state agencies, prior to marketing their products to the public. These companies are subject to the expense, delay and uncertainty of the approval process, and there can be no guarantee that a particular product will obtain regulatory approval. In addition, the current regulatory framework may change or additional regulations may arise at any stage during the product development phase of an investment, which may delay or prevent regulatory approval or impact applicable exclusivity periods. If a company in which our funds are invested is unable to obtain regulatory approval for its product, or a product in which our funds are invested does not obtain regulatory approval, in a timely fashion or at all, the value of our investment would be adversely impacted. In addition, in connection with certain pharmaceutical corporate partnership transactions, our special purpose development companies will be contractually obligated to run clinical trials. In the event such clinical trials do not comply with the complicated regulatory requirements applicable thereto, such special purpose development companies may be subject to regulatory actions. Lastly, if legislation is passed in the U.S. that reduces the applicable exclusivity period for biologic products, this reform could result in price reductions at an earlier stage of a product’s life cycle than originally estimated by BXLS, which could reduce the cumulative financial returns on BXLS’s investment in any such product. |
• | Intellectual property often constitutes an important part of a life sciences company’s assets and competitive strengths, particularly for royalty monetization transactions. To the extent such companies’ intellectual property positions with respect to products in which BXLS invests, whether through a royalty or otherwise, are challenged, invalidated or circumvented, the value of BXLS’s investment may be impaired. The success of a life sciences investment depends in part on the ability of the pharmaceutical or other life sciences companies in whose products BXLS invests to obtain and defend patent rights and other intellectual property rights that are important to the commercialization of such products. The patent positions of such companies can be highly uncertain and often involve complex legal, scientific and factual questions. |
• | The commercial success of products could be compromised if governmental or third party payers do not provide coverage and reimbursement, breach, rescind or modify their contracts or reimbursement policies or delay payments for such products. In both the U.S. and foreign markets, the successful sale of a life sciences company’s product depends on the ability to obtain and maintain adequate coverage and reimbursement from third party payers, including government healthcare programs and private insurance plans. Governments and third party payers continue to pursue aggressive initiatives to contain costs and manage drug utilization and are increasingly focused on the effectiveness, benefits and costs of similar treatments, which could result in lower reimbursement rates and narrower populations for whom the products in which BXLS invests will be reimbursed by payers. To the extent an investment made by BXLS relies in whole or in part on royalties or other payments based on product sales, adequate third party payer reimbursement may not be available to enable price levels for the product sufficient for BXLS to realize an appropriate return on the investment. |
• | Certain of the funds in which we invest are newly established funds without any operating history or are managed by management companies or general partners who may not have as significant track records as an independent manager. |
• | Generally, the execution of these hedge funds’ investment strategies is subject to the sole discretion of the management company or the general partner of such funds. |
• | Hedge funds may engage in speculative trading strategies, including short selling, which is subject to the theoretically unlimited risk of loss because there is no limit on how much the price of a security may appreciate before the short position is closed out. A fund may be subject to losses if a security lender demands return of the lent securities and an alternative lending source cannot be found or if the fund is otherwise unable to borrow securities that are necessary to hedge or cover its positions. |
• | Hedge funds are exposed to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem or otherwise, thus causing the fund to suffer a loss. Counterparty risk is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the fund has concentrated its transactions with a single or small group of counterparties. Generally, hedge funds are not restricted from dealing with any particular counterparty or from concentrating any or all of their transactions with one counterparty. Moreover, the funds’ internal consideration of the creditworthiness of their counterparties may prove insufficient. The absence of a regulated market to facilitate settlement may increase the potential for losses. |
• | Credit risk may arise through a default by one of several large institutions that are dependent on one another to meet their liquidity or operational needs, so that a default by one institution causes a series of defaults by the other institutions. This “systemic risk” may adversely affect the financial intermediaries (such as clearing agencies, clearing houses, banks, securities firms and exchanges) with which the hedge funds interact on a daily basis. |
• | The efficacy of investment and trading strategies depend largely on the ability to establish and maintain an overall market position in a combination of financial instruments. A hedge fund’s trading orders may not be executed in a timely and efficient manner due to various circumstances, including systems failures or human error. In such event, the funds might only be able to acquire some but not all of the components of the position, or if the overall position were to need adjustment, the funds might not be able to make such adjustment. As a result, the funds would not be able to achieve the market position selected by the management company or general partner of such funds, and might incur a loss in liquidating their position. |
• | Hedge funds are subject to risks due to potential illiquidity of assets. Hedge funds may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely divestiture or sale of trading positions can be impaired by decreased trading volume, increased price volatility, concentrated trading positions, limitations on the ability to transfer positions in highly specialized or structured transactions to which they may be a party, and changes in industry and government regulations. It may be impossible or costly for hedge funds to liquidate positions rapidly in order to meet margin calls, withdrawal requests or otherwise, particularly if there are other market participants seeking to dispose of similar assets at the same time or the relevant market is otherwise moving against a position or in the event of trading halts or daily price movement limits on the market or otherwise. Any “gate” or similar limitation on withdrawals with respect to hedge funds may not be effective in mitigating such risk. Moreover, these risks may be exacerbated for our funds of hedge funds. For example, if one of our funds of hedge funds were to invest a significant portion of its assets in two or more hedge funds that each had illiquid positions in the same issuer, the illiquidity risk for our funds of hedge funds would be compounded. For example, in 2008 many hedge funds, including some of our hedge funds, experienced significant declines in value. In many cases, these declines in value were both provoked and exacerbated by margin calls and forced selling of assets. Moreover, certain of our funds of hedge funds were invested in third party hedge funds that halted redemptions in the face of illiquidity and other issues, which precluded those funds of hedge funds from receiving their capital back on request. |
• | Hedge fund investments are subject to risks relating to investments in commodities, futures, options and other derivatives, the prices of which are highly volatile and may be subject to the theoretically unlimited risk of loss in certain circumstances, including if the fund writes a call option. Price movements of commodities, futures and options contracts and payments pursuant to swap agreements are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments and national and international political and economic events and policies. The value of futures, options and swap agreements also depends upon the price of the commodities underlying them and prevailing exchange rates. In addition, hedge funds’ assets are subject to the risk of the failure of any of the exchanges on which their positions trade or of their clearinghouses or counterparties. Most U.S. commodities exchanges limit fluctuations in certain commodity interest prices during a single day by imposing “daily price fluctuation limits” or “daily limits,” the existence of which may reduce liquidity or effectively curtail trading in particular markets. |
• | permitting our board of directors to issue one or more series of preferred stock; |
• | providing for the loss of voting rights for the Class A common stock; |
• | requiring advance notice for shareholder proposals and nominations if they are ever permitted by applicable law; |
• | placing limitations on convening shareholder meetings; |
• | prohibiting shareholder action by written consent unless such action is consent to by the Class C Shareholder; and |
• | imposing super-majority voting requirements for certain amendments to our certificate of incorporation. |
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
|
|
2019
|
|
2018
|
|
||||
First Quarter
|
$ |
0.37
|
$ |
0.35
|
||||
Second Quarter
|
0.48
|
0.58
|
||||||
Third Quarter
|
0.49
|
0.64
|
||||||
Fourth Quarter
|
0.61
|
0.58
|
||||||
|
$ |
1.95
|
$ |
2.15
|
||||
Period
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs (a)
|
|
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Program
(Dollars in Thousands) (a)
|
|
||||||||
Oct. 1 - Oct. 31, 2019
|
—
|
$ |
—
|
—
|
$ |
864,012
|
||||||||||
Nov. 1 - Nov. 30, 2019
|
—
|
$ |
—
|
—
|
$ |
864,012
|
||||||||||
Dec. 1 - Dec. 31, 2019
|
1,500,000
|
$ |
55.22
|
1,500,000
|
$ |
781,182
|
||||||||||
|
1,500,000
|
|
1,500,000
|
|
||||||||||||
(a) | On July 16, 2019, our board of directors authorized the repurchase of up to $1.0 billion of Class A common stock and Blackstone Holdings Partnership Units. Under the repurchase program, repurchases may be made from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual numbers repurchased will depend on a variety of factors, including legal requirements, price and economic and market conditions. The repurchase program may be changed, suspended or discontinued at any time and does not have a specified expiration date. See “— Item 8. Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements — Note 16. Earnings Per Share and Stockholder’s Equity” and “— Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Sources and Uses of Liquidity” for further information regarding this unit repurchase program. |
Item 6.
|
Selected Financial Data
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in Thousands, Except Per Share Data)
|
|||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Management and Advisory Fees, Net
|
$ |
3,472,155
|
$ |
3,027,796
|
$ |
2,751,322
|
$ |
2,464,290
|
$ |
2,566,449
|
||||||||||
Incentive Fees
|
129,911
|
57,540
|
242,514
|
149,928
|
168,554
|
|||||||||||||||
Total Investment Income
|
3,473,813
|
2,903,659
|
4,144,712
|
2,381,604
|
1,844,930
|
|||||||||||||||
Interest and Dividend Revenue and Other
|
262,391
|
844,264
|
6,467
|
150,477
|
102,739
|
|||||||||||||||
Total Revenues
|
7,338,270
|
6,833,259
|
7,145,015
|
5,146,299
|
4,682,672
|
|||||||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Compensation and Benefits
|
3,067,857
|
2,674,691
|
2,933,523
|
2,202,986
|
2,296,515
|
|||||||||||||||
General, Administrative and Other
|
679,408
|
594,873
|
488,582
|
541,624
|
600,047
|
|||||||||||||||
Interest Expense
|
199,648
|
163,990
|
197,486
|
152,654
|
144,522
|
|||||||||||||||
Fund Expenses
|
17,738
|
78,486
|
132,787
|
52,181
|
79,499
|
|||||||||||||||
Total Expenses
|
3,964,651
|
3,512,040
|
3,752,378
|
2,949,445
|
3,120,583
|
|||||||||||||||
Other Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Change in Tax Receivable Agreement Liability
|
161,567
|
—
|
403,855
|
—
|
82,707
|
|||||||||||||||
Net Gains from Fund Investment Activities
|
282,829
|
191,722
|
321,597
|
184,750
|
176,364
|
|||||||||||||||
Total Other Income
|
444,396
|
191,722
|
725,452
|
184,750
|
259,071
|
|||||||||||||||
Income Before Provision (Benefit) for Taxes
|
3,818,015
|
3,512,941
|
4,118,089
|
2,381,604
|
1,821,160
|
|||||||||||||||
Provision (Benefit) for Taxes
|
(47,952
|
) |
249,390
|
743,147
|
132,362
|
190,398
|
||||||||||||||
Net Income
|
3,865,967
|
3,263,551
|
3,374,942
|
2,249,242
|
1,630,762
|
|||||||||||||||
Net Income (Loss) Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
|
(121
|
) |
(2,104
|
) |
13,806
|
3,977
|
11,145
|
|||||||||||||
Net Income Attributable to
Non-Controlling
Interests in Consolidated Entities
|
476,779
|
358,878
|
497,439
|
246,152
|
219,900
|
|||||||||||||||
Net Income Attributable to
Non-Controlling
Interests in Blackstone Holdings
|
1,339,627
|
1,364,989
|
1,392,323
|
960,099
|
686,529
|
|||||||||||||||
Net Income Attributable to The Blackstone Group Inc.
|
$ |
2,049,682
|
$ |
1,541,788
|
$ |
1,471,374
|
$ |
1,039,014
|
$ |
713,188
|
||||||||||
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in Thousands, Except Per Share Data)
|
|||||||||||||||||||
Net Income Per Share of Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
$ |
3.03
|
$ |
2.27
|
$ |
2.21
|
$ |
1.60
|
$ |
1.12
|
||||||||||
Diluted
|
$ |
3.03
|
$ |
2.26
|
$ |
2.21
|
$ |
1.56
|
$ |
1.04
|
||||||||||
Dividends Declared Per Share of Class A Common Stock (a)
|
$ |
1.92
|
$ |
2.42
|
$ |
2.32
|
$ |
1.66
|
$ |
2.90
|
||||||||||
(a) | Dividends declared reflects the calendar date of declaration for each dividend. The fourth quarter dividend, if any, for any fiscal year will be declared and paid in the subsequent fiscal year. |
|
December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(Dollars in Thousands)
|
|||||||||||||||||||
Statement of Financial Condition Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Assets (a)
|
$ |
32,585,506
|
$ |
28,924,650
|
$ |
34,415,919
|
$ |
26,386,650
|
$ |
22,510,246
|
||||||||||
Senior Notes
|
$ |
4,600,856
|
$ |
3,471,151
|
$ |
3,514,815
|
$ |
3,399,922
|
$ |
2,797,060
|
||||||||||
Total Liabilities (a)
|
$ |
17,482,454
|
$ |
15,170,564
|
$ |
20,692,828
|
$ |
13,879,169
|
$ |
10,286,836
|
||||||||||
Redeemable
Non-Controlling
Interests in Consolidated Entities
|
$ |
87,651
|
$ |
141,779
|
$ |
210,944
|
$ |
185,390
|
$ |
183,459
|
||||||||||
Total Equity/Partners’ Capital
|
$ |
15,015,401
|
$ |
13,612,307
|
$ |
13,512,147
|
$ |
12,322,091
|
$ |
12,039,951
|
(a) | The decrease in Total Assets and Total Liabilities from December 31, 2017 to December 31, 2018 is primarily due to the deconsolidation of CLOs and other fund entities, partially offset by the launch of new consolidated CLOs. The increase in Total Assets and Total Liabilities from December 31, 2016 to December 31, 2017 is principally due to new consolidated CLO vehicles managed by our Credit segment. |
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
Real Estate.
|
• |
Private Equity.
|
(b) our opportunistic investment platform that invests globally across asset classes, industries and geographies, Blackstone Tactical Opportunities (“Tactical Opportunities”), (c) our secondary fund of funds business, Strategic Partners Fund Solutions (“Strategic Partners”), (d) our infrastructure-focused funds, Blackstone Infrastructure Partners (“BIP”), (e) our life sciences private investment platform, Blackstone Life Sciences (“BXLS”), (f) a multi-asset investment program for eligible high net worth investors offering exposure to certain of Blackstone’s key illiquid investment strategies through a single commitment, Blackstone Total Alternatives Solution (“BTAS”) and (g) our capital markets services business, Blackstone Capital Markets (“BXCM”). |
• |
Hedge Fund Solutions.
|
• |
Credit.
sub-advises
predominantly consist of loans and securities of
non-investment
grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity.
|
(a) |
the fair value of the investments held by our carry funds and our
side-by-side
and
co-investment
entities managed by us, plus (1) the capital that we are entitled to call from investors in those funds and entities pursuant to the terms of their respective capital commitments, including capital commitments to funds that have yet to commence their investment periods, or (2) for certain credit-focused funds the amounts available to be borrowed under asset based credit facilities,
|
(b) |
the net asset value of (1) our hedge funds and real estate debt carry funds, BPP, certain
co-investments
managed by us, certain credit-focused funds, and our Hedge Fund Solutions drawdown funds (plus, in each case, the capital that we are entitled to call from investors in those funds, including commitments yet to commence their investment periods), and (2) our funds of hedge funds, our Hedge Fund Solutions registered investment companies, and BREIT,
|
(c) | the invested capital, fair value or net asset value of assets we manage pursuant to separately managed accounts, |
(d) | the amount of debt and equity outstanding for our CLOs during the reinvestment period, |
(e) | the aggregate par amount of collateral assets, including principal cash, for our CLOs after the reinvestment period, |
(f) | the gross or net amount of assets (including leverage where applicable) for our credit-focused registered investment companies, and |
(g) | the fair value of common stock, preferred stock, convertible debt, or similar instruments issued by BXMT. |
(a) | for our Private Equity segment funds and Real Estate segment carry funds, including certain BREDS and Hedge Fund Solutions funds, the amount of capital commitments, remaining invested capital, fair value, net asset value or par value of assets held, depending on the fee terms of the fund, |
(b) | for our credit-focused carry funds, the amount of remaining invested capital (which may include leverage) or net asset value, depending on the fee terms of the fund, |
(c) |
the remaining invested capital or fair value of assets held in
co-investment
vehicles managed by us on which we receive fees,
|
(d) |
the net asset value of our funds of hedge funds, hedge funds, BPP, certain
co-investments
managed by us, certain registered investment companies, BREIT, and certain of our Hedge Fund Solutions drawdown funds,
|
(e) | the invested capital, fair value of assets or the net asset value we manage pursuant to separately managed accounts, |
(f) | the net proceeds received from equity offerings and accumulated core earnings of BXMT, subject to certain adjustments, |
(g) | the aggregate par amount of collateral assets, including principal cash, of our CLOs, and |
(h) | the gross amount of assets (including leverage) or the net assets (plus leverage where applicable) for certain of our credit-focused registered investment companies. |
|
Year Ended December 31,
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|
|||||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Management and Advisory Fees, Net
|
$ |
3,472,155
|
$ |
3,027,796
|
$ |
2,751,322
|
$ |
444,359
|
15%
|
$ |
276,474
|
10%
|
|||||||||||||||||
Incentive Fees
|
129,911
|
57,540
|
242,514
|
72,371
|
126%
|
(184,974
|
) |
-76%
|
|||||||||||||||||||||
Investment Income (Loss)
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Performance Allocations
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Realized
|
1,739,000
|
1,876,507
|
3,571,811
|
(137,507
|
) |
-7%
|
(1,695,304
|
) |
-47%
|
||||||||||||||||||||
Unrealized
|
1,126,332
|
561,373
|
(105,473
|
) |
564,959
|
101%
|
666,846
|
N/M
|
|||||||||||||||||||||
Principal Investments
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Realized
|
393,478
|
415,862
|
635,769
|
(22,384
|
) |
-5%
|
(219,907
|
) |
-35%
|
||||||||||||||||||||
Unrealized
|
215,003
|
49,917
|
42,605
|
165,086
|
331%
|
7,312
|
17%
|
||||||||||||||||||||||
Total Investment Income
|
3,473,813
|
2,903,659
|
4,144,712
|
570,154
|
20%
|
(1,241,053
|
) |
-30%
|
|||||||||||||||||||||
Interest and Dividend Revenue
|
182,398
|
171,947
|
139,696
|
10,451
|
6%
|
32,251
|
23%
|
||||||||||||||||||||||
Other
|
79,993
|
672,317
|
(133,229
|
) |
(592,324
|
) |
-88%
|
805,546
|
N/M
|
||||||||||||||||||||
Total Revenues
|
7,338,270
|
6,833,259
|
7,145,015
|
505,011
|
7%
|
(311,756
|
) |
-4%
|
|||||||||||||||||||||
Expenses
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Compensation and Benefits
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Compensation
|
1,820,330
|
1,609,957
|
1,442,485
|
210,373
|
13%
|
167,472
|
12%
|
||||||||||||||||||||||
Incentive Fee Compensation
|
44,300
|
33,916
|
105,279
|
10,384
|
31%
|
(71,363
|
) |
-68%
|
|||||||||||||||||||||
Performance Allocations Compensation
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Realized
|
662,942
|
711,076
|
1,281,965
|
(48,134
|
) |
-7%
|
(570,889
|
) |
-45%
|
||||||||||||||||||||
Unrealized
|
540,285
|
319,742
|
103,794
|
220,543
|
69%
|
215,948
|
208%
|
||||||||||||||||||||||
Total Compensation and Benefits
|
3,067,857
|
2,674,691
|
2,933,523
|
393,166
|
15%
|
(258,832
|
) |
-9%
|
|||||||||||||||||||||
General, Administrative and Other
|
679,408
|
594,873
|
488,582
|
84,535
|
14%
|
106,291
|
22%
|
||||||||||||||||||||||
Interest Expense
|
199,648
|
163,990
|
197,486
|
35,658
|
22%
|
(33,496
|
) |
-17%
|
|||||||||||||||||||||
Fund Expenses
|
17,738
|
78,486
|
132,787
|
(60,748
|
) |
-77%
|
(54,301
|
) |
-41%
|
||||||||||||||||||||
Total Expenses
|
3,964,651
|
3,512,040
|
3,752,378
|
452,611
|
13%
|
(240,338
|
) |
-6%
|
|||||||||||||||||||||
Other Income
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Change in Tax Receivable Agreement Liability
|
161,567
|
—
|
403,855
|
161,567
|
N/M
|
(403,855
|
) |
-100%
|
|||||||||||||||||||||
Net Gains from Fund Investment Activities
|
282,829
|
191,722
|
321,597
|
91,107
|
48%
|
(129,875
|
) |
-40%
|
|||||||||||||||||||||
Total Other Income
|
444,396
|
191,722
|
725,452
|
252,674
|
132%
|
(533,730
|
) |
-74%
|
|||||||||||||||||||||
Income Before Provision (Benefit) for Taxes
|
3,818,015
|
3,512,941
|
4,118,089
|
305,074
|
9%
|
(605,148
|
) |
-15%
|
|||||||||||||||||||||
Provision (Benefit) for Taxes
|
(47,952
|
) |
249,390
|
743,147
|
(297,342
|
) |
N/M
|
(493,757
|
) |
-66%
|
|||||||||||||||||||
Net Income
|
3,865,967
|
3,263,551
|
3,374,942
|
602,416
|
18%
|
(111,391
|
) |
-3%
|
|||||||||||||||||||||
Net Income (Loss) Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
|
(121
|
) |
(2,104
|
) |
13,806
|
1,983
|
-94%
|
(15,910
|
) |
N/M
|
|||||||||||||||||||
Net Income Attributable to Non- Controlling Interests in Consolidated Entities
|
476,779
|
358,878
|
497,439
|
117,901
|
33%
|
(138,561
|
) |
-28%
|
|||||||||||||||||||||
Net Income Attributable to Non- Controlling Interests in Blackstone Holdings
|
1,339,627
|
1,364,989
|
1,392,323
|
(25,362
|
) |
-2%
|
(27,334
|
) |
-2%
|
||||||||||||||||||||
Net Income Attributable to The Blackstone Group Inc.
|
$ |
2,049,682
|
$ |
1,541,788
|
$ |
1,471,374
|
$ |
507,894
|
33%
|
$ |
70,414
|
5%
|
|||||||||||||||||
N/M | Not meaningful. |
|
Year Ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(Dollars in Thousands)
|
|||||||||||
Income Before Provision (Benefit) for Taxes
|
$ |
3,818,015
|
$ |
3,512,941
|
$ |
4,118,089
|
||||||
Provision (Benefit) for Taxes
|
$ |
(47,952
|
) | $ |
249,390
|
$ |
743,147
|
|||||
Effective Income Tax Rate
|
-1.3
|
% |
7.1
|
% |
18.0
|
% |
|
Year Ended December 31,
|
2019 vs.
2018
|
|
2018 vs.
2017
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||||||||||
Statutory U.S. Federal Income Tax Rate
|
21.0
|
% |
21.0
|
% |
35.0
|
% |
—
|
-14.0
|
% | ||||||||||||
Income Passed Through to Common Shareholders and
Non-Controlling
Interest Holders (a)
|
-13.5
|
% |
-15.5
|
% |
-25.9
|
% |
2.0
|
% |
10.4
|
% | |||||||||||
State and Local Income Taxes
|
1.6
|
% |
1.8
|
% |
1.5
|
% |
-0.2
|
% |
0.3
|
% | |||||||||||
Equity-Based Compensation
|
—
|
—
|
-0.1
|
% |
—
|
0.1
|
% | ||||||||||||||
Change to a Taxable Corporation
|
-10.3
|
% |
—
|
—
|
-10.3
|
% |
—
|
||||||||||||||
Impact of the Tax Reform Bill
|
—
|
—
|
8.3
|
% |
—
|
-8.3
|
% | ||||||||||||||
Change in Valuation Allowance (b)
|
-0.8
|
% |
—
|
—
|
-0.8
|
% |
—
|
||||||||||||||
Other
|
0.7
|
% |
-0.2
|
% |
-0.8
|
% |
0.9
|
% |
0.6
|
% | |||||||||||
Effective Income Tax Rate
|
-1.3
|
% |
7.1
|
% |
18.0
|
% |
-8.4
|
% |
-10.9
|
% | |||||||||||
(a) |
Includes income that was not taxable to Blackstone and its subsidiaries. Such income was directly taxable to shareholders of Blackstone’s Class A common stock for the period prior to the Conversion and remains taxable to Blackstone’s
non-controlling
interest holders.
|
(b) | The Change in Valuation Allowance for the year ended December 31, 2019 represents the change from July 1, 2019 to December 31, 2019, following the change to a taxable corporation. |
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||||
|
2019
|
2018
|
|||||||||||||||||||||||||||||||||||||||
|
Real Estate
|
|
Private
Equity |
|
Hedge Fund
Solutions |
|
Credit
|
|
Total
|
|
Real Estate
|
|
Private
Equity |
|
Hedge Fund
Solutions |
|
Credit
|
|
Total
|
|
|||||||||||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||||||||||||
Fee-Earning
Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance, Beginning of Period
|
$ |
93,252,724
|
$ |
80,008,166
|
$ |
72,280,606
|
$ |
96,986,011
|
$ |
342,527,507
|
$ |
83,984,824
|
$ |
70,140,883
|
$ |
69,914,061
|
$ |
111,304,230
|
$ |
335,343,998
|
|||||||||||||||||||||
Inflows, including Commitments (a)
|
52,424,662
|
27,260,480
|
11,488,234
|
21,069,189
|
112,242,565
|
17,961,223
|
16,096,543
|
12,354,410
|
24,587,957
|
71,000,133
|
|||||||||||||||||||||||||||||||
Outflows, including Distributions (b)
|
(9,690,143
|
) |
(2,352,716
|
) |
(11,928,940
|
) |
(9,067,554
|
) |
(33,039,353
|
) |
(2,000,367
|
) |
(1,888,223
|
) |
(10,278,403
|
) |
(27,640,908
|
) |
(41,807,901
|
) | |||||||||||||||||||||
Net Inflows (Outflows)
|
42,734,519
|
24,907,764
|
(440,706
|
) |
12,001,635
|
79,203,212
|
15,960,856
|
14,208,320
|
2,076,007
|
(3,052,951
|
) |
29,192,232
|
|||||||||||||||||||||||||||||
Realizations (c)
|
(11,353,675
|
) |
(7,212,993
|
) |
(1,153,785
|
) |
(5,629,089
|
) |
(25,349,542
|
) |
(8,781,140
|
) |
(4,729,843
|
) |
(429,912
|
) |
(6,672,539
|
) |
(20,613,434
|
) | |||||||||||||||||||||
Market Activity (d)(g)
|
3,580,569
|
71,027
|
4,949,889
|
3,092,190
|
11,693,675
|
2,088,184
|
388,806
|
720,450
|
(4,592,729
|
) |
(1,395,289
|
) | |||||||||||||||||||||||||||||
Balance, End of Period (e)
|
$ |
128,214,137
|
$ |
97,773,964
|
$ |
75,636,004
|
$ |
106,450,747
|
$ |
408,074,852
|
$ |
93,252,724
|
$ |
80,008,166
|
$ |
72,280,606
|
$ |
96,986,011
|
$ |
342,527,507
|
|||||||||||||||||||||
Increase (Decrease)
|
$ |
34,961,413
|
$ |
17,765,798
|
$ |
3,355,398
|
$ |
9,464,736
|
$ |
65,547,345
|
$ |
9,267,900
|
$ |
9,867,283
|
$ |
2,366,545
|
$ |
(14,318,219
|
) | $ |
7,183,509
|
||||||||||||||||||||
Increase (Decrease)
|
37
|
% |
22
|
% |
5
|
% |
10
|
% |
19
|
% |
11
|
% |
14
|
% |
3
|
% |
-13
|
% |
2
|
% | |||||||||||||||||||||
Annualized Base Management Fee Rate (f)
|
1.04
|
% |
1.02
|
% |
0.75
|
% |
0.56
|
% |
0.86
|
% |
1.09
|
% |
1.00
|
% |
0.73
|
% |
0.56
|
% |
0.84
|
% |
|
Year Ended December 31,
|
||||||||||||||||||||
|
2017
|
||||||||||||||||||||
|
Real Estate
|
|
Private
Equity |
|
Hedge Fund
Solutions |
|
Credit
|
|
Total
|
|
|||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||
Fee-Earning
Assets Under Management
|
|
|
|
|
|
||||||||||||||||
Balance, Beginning of Period
|
$ |
72,030,054
|
$ |
69,110,457
|
$ |
66,987,553
|
$ |
68,964,608
|
$ |
277,092,672
|
|||||||||||
Inflows, including Commitments (a)
|
23,555,866
|
8,257,430
|
10,302,444
|
55,099,845
|
97,215,585
|
||||||||||||||||
Outflows, including Distributions (b)
|
(2,773,181
|
) |
(1,196,502
|
) |
(9,777,064
|
) |
(4,364,916
|
) |
(18,111,663
|
) | |||||||||||
Net Inflows
|
20,782,685
|
7,060,928
|
525,380
|
50,734,929
|
79,103,922
|
||||||||||||||||
Realizations (c)
|
(11,851,866
|
) |
(6,558,390
|
) |
(2,182,220
|
) |
(10,396,313
|
) |
(30,988,789
|
) | |||||||||||
Market Activity (d)(g)
|
3,023,951
|
527,888
|
4,583,348
|
2,001,006
|
10,136,193
|
||||||||||||||||
Balance, End of Period (e)
|
$ |
83,984,824
|
$ |
70,140,883
|
$ |
69,914,061
|
$ |
111,304,230
|
$ |
335,343,998
|
|||||||||||
Increase
|
$ |
11,954,770
|
$ |
1,030,426
|
$ |
2,926,508
|
$ |
42,339,622
|
$ |
58,251,326
|
|||||||||||
Increase
|
17
|
% |
1
|
% |
4
|
% |
61
|
% |
21
|
% | |||||||||||
Annualized Base Management Fee Rate (f)
|
1.06
|
% |
1.07
|
% |
0.74
|
% |
0.56
|
% |
0.83
|
% |
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||||
|
2019
|
2018
|
|||||||||||||||||||||||||||||||||||||||
|
Real Estate
|
|
Private
Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Total
|
|
Real Estate
|
|
Private
Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Total
|
|
|||||||||||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||||||||||||||
Total Assets Under Management
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance, Beginning of Period
|
$ |
136,247,229
|
$ |
130,665,286
|
$ |
77,814,516
|
$ |
127,515,286
|
$ |
472,242,317
|
$ |
115,340,363
|
$ |
105,560,576
|
$ |
75,090,834
|
$ |
138,136,470
|
$ |
434,128,243
|
|||||||||||||||||||||
Inflows, including Commitments (a)
|
34,190,566
|
56,836,570
|
12,242,855
|
31,107,288
|
134,377,279
|
31,478,431
|
26,639,963
|
13,278,327
|
29,578,890
|
100,975,611
|
|||||||||||||||||||||||||||||||
Outflows, including Distributions (b)
|
(2,664,717
|
) |
(1,065,445
|
) |
(13,433,702
|
) |
(11,629,269
|
) |
(28,793,133
|
) |
(2,162,958
|
) |
(1,617,585
|
) |
(10,780,055
|
) |
(28,057,658
|
) |
(42,618,256
|
) | |||||||||||||||||||||
Net Inflows (Outflows)
|
31,525,849
|
55,771,125
|
(1,190,847
|
) |
19,478,019
|
105,584,146
|
29,315,473
|
25,022,378
|
2,498,272
|
1,521,232
|
58,357,355
|
||||||||||||||||||||||||||||||
Realizations (c)
|
(18,097,899
|
) |
(13,540,914
|
) |
(1,271,968
|
) |
(7,291,045
|
) |
(40,201,826
|
) |
(14,675,095
|
) |
(10,396,611
|
) |
(471,931
|
) |
(8,516,996
|
) |
(34,060,633
|
) | |||||||||||||||||||||
Market Activity (d)(h)
|
13,480,885
|
9,990,612
|
5,386,411
|
4,639,918
|
33,497,826
|
6,266,488
|
10,478,943
|
697,341
|
(3,625,420
|
) |
13,817,352
|
||||||||||||||||||||||||||||||
Balance, End of Period (e)
|
$ |
163,156,064
|
$ |
182,886,109
|
$ |
80,738,112
|
$ |
144,342,178
|
$ |
571,122,463
|
$ |
136,247,229
|
$ |
130,665,286
|
$ |
77,814,516
|
$ |
127,515,286
|
$ |
472,242,317
|
|||||||||||||||||||||
Increase (Decrease)
|
$ |
26,908,835
|
$ |
52,220,823
|
$ |
2,923,596
|
$ |
16,826,892
|
$ |
98,880,146
|
$ |
20,906,866
|
$ |
25,104,710
|
$ |
2,723,682
|
$ |
(10,621,184
|
) | $ |
38,114,074
|
||||||||||||||||||||
Increase (Decrease)
|
20
|
% |
40
|
% |
4
|
% |
13
|
% |
21
|
% |
18
|
% |
24
|
% |
4
|
% |
-8
|
% |
9
|
% |
|
Year Ended December 31,
|
||||||||||||||||||||
|
2017
|
||||||||||||||||||||
|
Real Estate
|
|
Private
Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Total
|
|
|||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||
Total Assets Under Management
|
|
|
|
|
|
||||||||||||||||
Balance, Beginning of Period
|
$ |
101,963,652
|
$ |
100,189,994
|
$ |
71,119,718
|
$ |
93,280,101
|
$ |
366,553,465
|
|||||||||||
Inflows, including Commitments (a)
|
23,844,270
|
12,631,106
|
12,106,471
|
59,373,876
|
107,955,723
|
||||||||||||||||
Outflows, including Distributions (b)
|
(1,399,741
|
) |
(1,230,409
|
) |
(10,661,542
|
) |
(6,165,216
|
) |
(19,456,908
|
) | |||||||||||
Net Inflows
|
22,444,529
|
11,400,697
|
1,444,929
|
53,208,660
|
88,498,815
|
||||||||||||||||
Realizations (c)
|
(24,527,951
|
) |
(15,760,727
|
) |
(2,409,985
|
) |
(12,487,834
|
) |
(55,186,497
|
) | |||||||||||
Market Activity (d)(h)
|
15,460,133
|
9,730,612
|
4,936,172
|
4,135,543
|
34,262,460
|
||||||||||||||||
Balance, End of Period (e)
|
$ |
115,340,363
|
$ |
105,560,576
|
$ |
75,090,834
|
$ |
138,136,470
|
$ |
434,128,243
|
|||||||||||
Increase
|
$ |
13,376,711
|
$ |
5,370,582
|
$ |
3,971,116
|
$ |
44,856,369
|
$ |
67,574,778
|
|||||||||||
Increase
|
13
|
% |
5
|
% |
6
|
% |
48
|
% |
18
|
% |
(a) |
Inflows represent contributions, capital raised, other increases in available capital (recallable capital, increased
side-by-side
commitments), purchases, inter-segment allocations and acquisitions.
|
(b) |
Outflows represent redemptions, client withdrawals and decreases in available capital (expired capital, expense drawdowns and decreased
side-by-side
commitments).
|
(c) | Realizations represent realizations from the disposition of assets or capital returned to investors from CLOs. |
(d) | Market activity includes realized and unrealized gains (losses) on portfolio investments and the impact of foreign exchange rate fluctuations. |
(e) | Assets Under Management are reported in the segment where the assets are managed. |
(f) |
Represents the annualized current quarter’s Base Management Fee divided by period end
Fee-Earning
Assets Under Management.
|
(g) |
For the year ended December 31, 2019, the impact to
Fee-Earning
Assets Under Management due to foreign exchange rate fluctuations was $(94.9) million, $(280.6) million and $(375.5) million for the Real Estate, Credit and Total segments, respectively. For the year ended December 31, 2018, the impact to
Fee-Earning
Assets Under Management due to foreign exchange rate fluctuations was $(904.2) million, $(626.6) million and $(1.5) billion for the Real Estate, Credit and Total segments, respectively. For the year ended December 31, 2017, such impact was $1.4 billion, $1.3 million, $1.4 billion and $2.8 billion for the Real Estate, Private Equity, Credit and Total segments, respectively.
|
(h) | For the year ended December 31, 2019, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(908.4) million, $238.8 million, $(233.0) million and $(902.6) million for the Real Estate, Private Equity, Credit and Total segments, respectively. For the year ended December 31, 2018, the impact to Total Assets Under Management due to foreign exchange rate fluctuations was $(2.1) billion, $(354.1) million, $(821.9) million and $(3.3) billion for the Real Estate, Private Equity, Credit and Total segments, respectively. For the year ended December 31, 2017, such impact was $3.1 billion, $1.1 billion, $1.8 billion and $5.9 billion for the Real Estate, Private Equity, Credit and Total segments, respectively. |
• | Inflows of $112.2 billion related to: |
¡
|
$52.4 billion in our Real Estate segment primarily driven by $20.1 billion from BREP IX, which started its investment period on June 3, 2019 (this amount was reflected in Total Assets Under Management at each capital closing of the fund), $9.8 billion from BREP Europe VI, which started its investment period on October 9, 2019 (this amount was reflected in Total Assets Under Management at each capital closing of the fund), $8.2 billion from BREIT, $5.3 billion from BREDS, $3.1 billion from BPP U.S. and
co-investment,
$1.3 billion from BPP Europe and
co-investment
and $970.6 million from BPP Asia,
|
¡
|
$27.3 billion in our Private Equity segment driven by $11.7 billion from Strategic Partners, $8.1 billion from BIP, $4.0 billion from Tactical Opportunities, $2.5 billion from core private equity, $492.5 million from corporate private equity and $429.9 million from multi-asset products, |
¡
|
$21.1 billion in our Credit segment driven by $19.0 billion from certain long only and MLP strategies, $5.2 billion from direct lending, $4.8 billion from BIS, $3.7 billion from new CLOs, $2.8 billion from our distressed strategies and $993.8 million from mezzanine funds, partially offset by $16.0 billion of allocations to various strategies, and |
¡
|
$11.5 billion in our Hedge Fund Solutions segment driven by $7.0 billion from individual investor and specialized solutions, $2.8 billion from customized solutions and $1.7 billion from commingled products. |
• | Market activity of $11.7 billion due to: |
¡
|
$4.9 billion of market activity in our Hedge Fund Solutions segment driven by returns from BAAM’s Principal Solutions Composite of 8.2% gross (7.3% net), |
¡
|
$3.6 billion of market activity in our Real Estate segment driven by $3.1 billion of appreciation from our core+ real estate funds ($3.0 billion from market appreciation and $50.8 million from foreign exchange appreciation) and $710.1 million of market appreciation from BREDS, partially offset by $145.8 million of foreign exchange depreciation from BREP opportunistic funds, and |
¡
|
$3.1 billion of market activity in our Credit segment driven by $3.4 billion of market appreciation (primarily in certain long only and MLP strategies and BIS), partially offset by $280.6 million of foreign exchange depreciation. |
• | Outflows of $33.0 billion primarily attributable to: |
¡
|
$11.9 billion in our Hedge Fund Solutions segment driven by $6.3 billion from customized solutions, $3.4 billion from individual investor and specialized solutions and $2.2 billion from commingled products, |
¡
|
$9.7 billion in our Real Estate segment driven by $5.4 billion of uninvested reserves at the end of BREP VIII’s investment period and $2.9 billion of uninvested reserves at the end of BREP Europe V’s investment period (these amounts are still classified as available capital and included in Total Assets Under Management), $693.7 million of redemptions from core+ real estate funds and $583.9 million of redemptions from BREDS liquids funds, |
¡
|
$9.1 billion in our Credit segment driven by $6.6 billion from certain long only and MLP strategies, $1.3 billion from BIS and $493.8 million from our distressed strategies, and |
¡
|
$2.4 billion in our Private Equity segment driven by $978.1 million from core private equity, $440.2 million from multi-asset products, $369.2 million from corporate private equity, $286.4 million from Tactical Opportunities and $194.1 million from BXLS. |
• | Realizations of $25.3 billion primarily driven by: |
¡
|
$11.4 billion in our Real Estate segment driven by $5.8 billion from BREP opportunistic funds and
co-investment,
$3.1 billion from BREDS and $2.5 billion from core+ real estate funds,
|
¡
|
$7.2 billion in our Private Equity segment driven by $3.5 billion from corporate private equity, $2.0 billion from Tactical Opportunities and $1.4 billion from Strategic Partners and $260.0 million from core private equity, |
¡
|
$5.6 billion in our Credit segment driven by $1.9 billion from our distressed strategies, $1.4 billion from our mezzanine funds, $904.9 million from capital returned to investors from CLOs that are post their reinvestment periods, $762.9 million from certain long only and MLP strategies and $610.4 million from direct lending, and |
¡
|
$1.2 billion in our Hedge Fund Solutions segment drive by $1.1 billion from individual investor and specialized solutions. |
• | Inflows of $134.4 billion related to: |
¡
|
$56.8 billion in our Private Equity segment driven by $27.7 billion from corporate private equity primarily due to the initial close for the eighth flagship private equity fund in the first quarter of 2019 (this amount will be reflected in
Fee-Earning
Assets Under Management when the investment period commences), $11.2 billion from Strategic Partners, $8.3 billion from BIP, $5.4 billion from Tactical Opportunities, $3.0 billion from BXLS, $608.3 million from core private equity and $606.9 million from multi-asset products,
|
¡
|
$34.2 billion in our Real Estate segment driven by $10.0 billion capital raised from BREP Europe VI, $8.2 billion capital raised from BREIT, $5.2 billion capital raised from BREP IX, $6.0 billion total inflows from BREDS and $3.8 billion from BPP funds, |
¡
|
$31.1 billion in our Credit segment driven by $19.9 billion from certain long only and MLP strategies, $10.3 billion from direct lending, $8.1 billion from BIS, $4.0 billion from our distressed strategies, $3.7 billion from new CLOs and $587.3 million from mezzanine funds, partially offset by $16.0 billion of allocations to various strategies, and |
¡
|
$12.2 billion in our Hedge Fund Solutions segment driven by $6.5 billion from individual investor and specialized solutions, $4.1 billion from customized solutions, and $1.6 billion from commingled products. |
• | Market activity of $33.5 billion due to: |
¡
|
$13.5 billion of market activity in our Real Estate segment driven by carrying value increases in our opportunistic and BPP funds of 17.6% and 9.2% for the year, respectively, which includes $908.4 million of foreign exchange depreciation across the segment, |
¡
|
$10.0 billion of market activity in our Private Equity segment driven by carrying value increase in Strategic Partners, Tactical Opportunities and corporate private equity of 17.0%, 13.1% and 9.3%, respectively, which included $238.8 million of foreign exchange appreciation across the segment, |
¡
|
$5.4 billion of market activity in our Hedge Fund Solutions segment driven by reasons noted above in
Fee-Earning
Assets Under Management, and
|
¡
|
$4.6 billion of market activity in our Credit segment driven by $4.9 billion of market appreciation (primarily in certain long only and MLP strategies, BIS, and mezzanine funds), partially offset by $233.0 million of foreign exchange depreciation. |
• | Realizations of $40.2 billion primarily driven by: |
¡
|
$18.1 billion in our Real Estate segment driven by $13.1 billion from BREP opportunistic and
co-investment,
$2.7 billion from core+ real estate funds and $2.3 billion from BREDS,
|
¡
|
$13.5 billion in our Private Equity segment driven by disposition activity across the segment, mainly related to $6.9 billion from corporate private equity, $3.2 billion from Tactical Opportunities, $2.7 billion from Strategic Partners, $418.1 million from core private equity, and $353.9 million from BXLS, |
¡
|
$7.3 billion in our Credit segment driven by $2.8 billion from our distressed strategies, $1.6 billion from our mezzanine funds, $1.1 billion from direct lending, $904.9 million from capital returned to investors from CLOs that are post their reinvestment periods and $788.2 million from certain long only and MLP strategies, and |
¡
|
$1.3 billion in our Hedge Fund Solutions segment driven by $1.2 billion from individual investor and specialized solutions. |
• | Outflows of $28.8 billion primarily attributable to: |
¡
|
$13.4 billion in our Hedge Fund Solutions segment driven by $7.5 billion from customized solutions, $3.4 billion from individual investor and specialized solutions and $2.5 billion from commingled products, |
¡
|
$11.6 billion in our Credit segment driven by $6.9 billion from certain long only and MLP strategies, $1.4 billion from direct lending, $1.3 billion from BIS and $1.2 billion from our distressed strategies, |
¡
|
$2.7 billion in our Real Estate segment driven by the release of uninvested capital in BPP and BREDS, and redemptions from BREDS liquid funds, BPP U.S. and BREIT, and |
¡
|
$1.1 billion in our Private Equity segment driven by $447.1 million from Strategic Partners, $365.2 million from Tactical Opportunities, $268.3 million from corporate private equity and $111.0 million from multi-asset products, partially offset by $145.6 million from BXLS. |
(a) |
Represents illiquid drawdown funds, a component of Perpetual Capital and
fee-paying
co-investments;
includes
fee-paying
third party capital as well as general partner and employee capital that does not earn fees. Amounts are reduced by outstanding capital commitments, for which capital has not yet been invested.
|
|
December 31,
|
||||||||||||
|
2017
|
|
2018
|
|
2019
|
|
|||||||
|
(Dollars in Thousands)
|
||||||||||||
Dry Powder Available for Investment
|
|
|
|
||||||||||
Real Estate
|
$ |
32,251,005
|
$ |
40,627,676
|
$ |
45,698,155
|
|||||||
Private Equity
|
36,302,497
|
44,431,881
|
74,013,156
|
||||||||||
Hedge Fund Solutions
|
3,943,358
|
3,275,768
|
2,677,748
|
||||||||||
Credit
|
22,285,149
|
24,542,243
|
28,716,911
|
||||||||||
|
$ |
94,782,009
|
$ |
112,877,568
|
$ |
151,105,970
|
|||||||
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in Millions)
|
||||||||
Real Estate
|
|
|
|||||||
BREP IV
|
$ |
11
|
$ |
3
|
|||||
BREP V
|
19
|
55
|
|||||||
BREP VI
|
81
|
89
|
|||||||
BREP VII
|
447
|
484
|
|||||||
BREP VIII
|
674
|
429
|
|||||||
BREP IX
|
6
|
—
|
|||||||
BREP International II
|
—
|
—
|
|||||||
BREP Europe IV
|
167
|
200
|
|||||||
BREP Europe V
|
193
|
110
|
|||||||
BREP Asia I
|
152
|
114
|
|||||||
BREP Asia II
|
22
|
—
|
|||||||
BPP
|
282
|
215
|
|||||||
BREIT
|
79
|
23
|
|||||||
BREDS
|
47
|
17
|
|||||||
BTAS
|
42
|
36
|
|||||||
Total Real Estate (a)
|
2,220
|
1,775
|
|||||||
Private Equity
|
|
|
|||||||
BCP IV
|
23
|
72
|
|||||||
BCP VI
|
705
|
746
|
|||||||
BCP VII
|
471
|
225
|
|||||||
BCP Asia
|
17
|
—
|
|||||||
BEP I
|
102
|
103
|
|||||||
BEP II
|
—
|
73
|
|||||||
Tactical Opportunities
|
160
|
155
|
|||||||
Strategic Partners
|
144
|
94
|
|||||||
BCEP
|
46
|
19
|
|||||||
Clarus
|
7
|
—
|
|||||||
BTAS
|
61
|
41
|
|||||||
Other
|
—
|
1
|
|||||||
Total Private Equity (a)
|
1,737
|
1,529
|
|||||||
Hedge Fund Solutions
|
105
|
24
|
|||||||
Credit
|
252
|
195
|
|||||||
Total Blackstone Net Accrued Performance Revenues
|
$ |
4,314
|
$ |
3,523
|
|||||
(a) |
Real Estate and Private Equity include
Co-Investments,
as applicable.
|
Fund (Investment Period
Beginning Date / Ending Date) (a)
|
Committed
Capital |
|
Available
Capital (b) |
|
Unrealized Investments
|
Realized Investments
|
Total Investments
|
Net IRRs (d)
|
||||||||||||||||||||||||||||||||||||
Value
|
|
MOIC (c)
|
|
% Public
|
|
Value
|
|
MOIC (c)
|
|
Value
|
|
MOIC (c)
|
|
Realized
|
|
Total
|
|
|||||||||||||||||||||||||||
|
(Dollars in Thousands, Except Where Noted)
|
|||||||||||||||||||||||||||||||||||||||||||
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pre-BREP
|
$ |
140,714
|
$ |
—
|
$ |
—
|
N/A
|
—
|
$ |
345,190
|
2.5x
|
$ |
345,190
|
2.5x
|
33
|
% |
33
|
% | ||||||||||||||||||||||||||
BREP I (Sep 1994 / Oct 1996)
|
380,708
|
—
|
—
|
N/A
|
—
|
1,327,708
|
2.8x
|
1,327,708
|
2.8x
|
40
|
% |
40
|
% | |||||||||||||||||||||||||||||||
BREP II (Oct 1996 / Mar 1999)
|
1,198,339
|
—
|
—
|
N/A
|
—
|
2,531,614
|
2.1x
|
2,531,614
|
2.1x
|
19
|
% |
19
|
% | |||||||||||||||||||||||||||||||
BREP III (Apr 1999 / Apr 2003)
|
1,522,708
|
—
|
—
|
N/A
|
—
|
3,330,406
|
2.4x
|
3,330,406
|
2.4x
|
21
|
% |
21
|
% | |||||||||||||||||||||||||||||||
BREP IV (Apr 2003 / Dec 2005)
|
2,198,694
|
—
|
74,855
|
0.1x
|
50
|
% |
4,521,164
|
2.2x
|
4,596,019
|
1.7x
|
28
|
% |
12
|
% | ||||||||||||||||||||||||||||||
BREP V (Dec 2005 / Feb 2007)
|
5,539,418
|
—
|
272,765
|
1.0x
|
54
|
% |
13,030,719
|
2.4x
|
13,303,484
|
2.3x
|
12
|
% |
11
|
% | ||||||||||||||||||||||||||||||
BREP VI (Feb 2007 / Aug 2011)
|
11,060,444
|
—
|
917,009
|
2.8x
|
72
|
% |
26,936,728
|
2.5x
|
27,853,737
|
2.5x
|
13
|
% |
13
|
% | ||||||||||||||||||||||||||||||
BREP VII (Aug 2011 / Apr 2015)
|
13,496,564
|
1,906,699
|
7,262,924
|
1.6x
|
8
|
% |
22,551,604
|
2.1x
|
29,814,528
|
2.0x
|
22
|
% |
16
|
% | ||||||||||||||||||||||||||||||
BREP VIII (Apr 2015 / Jun 2019)
|
16,629,914
|
3,254,163
|
18,095,903
|
1.4x
|
—
|
6,838,570
|
1.7x
|
24,934,473
|
1.5x
|
26
|
% |
16
|
% | |||||||||||||||||||||||||||||||
*BREP IX (Jun 2019 / Dec 2024)
|
20,634,398
|
16,859,273
|
3,907,608
|
1.0x
|
—
|
87,590
|
N/M
|
3,995,198
|
1.0x
|
N/M
|
N/M
|
|||||||||||||||||||||||||||||||||
Total Global BREP
|
$ |
72,801,901
|
$ |
22,020,135
|
$ |
30,531,064
|
1.4x
|
5
|
% | $ |
81,501,293
|
2.2x
|
$ |
112,032,357
|
1.9x
|
18
|
% |
16
|
% | |||||||||||||||||||||||||
BREP Int’l (Jan 2001 / Sep 2005)
|
€
|
824,172
|
€
|
—
|
€
|
—
|
N/A
|
—
|
€
|
1,373,170
|
2.1x
|
€
|
1,373,170
|
2.1x
|
23
|
% |
23
|
% | ||||||||||||||||||||||||||
BREP Int’l II (Sep 2005 / Jun 2008) (e)
|
1,629,748
|
—
|
3,566
|
N/A
|
—
|
2,572,364
|
1.8x
|
2,575,930
|
1.8x
|
8
|
% |
8
|
% | |||||||||||||||||||||||||||||||
BREP Europe III (Jun 2008 / Sep 2013)
|
3,205,167
|
467,438
|
581,528
|
0.8x
|
—
|
5,579,325
|
2.5x
|
6,160,853
|
2.1x
|
21
|
% |
14
|
% | |||||||||||||||||||||||||||||||
BREP Europe IV (Sep 2013 / Dec 2016)
|
6,709,145
|
1,339,258
|
3,091,281
|
1.6x
|
—
|
8,910,480
|
2.0x
|
12,001,761
|
1.9x
|
23
|
% |
17
|
% | |||||||||||||||||||||||||||||||
BREP Europe V (Dec 2016 / Oct 2019)
|
7,935,140
|
1,780,767
|
7,935,118
|
1.3x
|
—
|
667,050
|
2.6x
|
8,602,168
|
1.4x
|
51
|
% |
16
|
% | |||||||||||||||||||||||||||||||
*BREP Europe VI (Oct 2019 / Apr 2025)
|
8,880,497
|
8,371,719
|
507,476
|
1.0x
|
—
|
—
|
N/A
|
507,476
|
1.0x
|
N/A
|
N/M
|
|||||||||||||||||||||||||||||||||
Total BREP Europe
|
€
|
29,183,869
|
€
|
11,959,182
|
€
|
12,118,969
|
1.3x
|
—
|
€
|
19,102,389
|
2.1x
|
€
|
31,221,358
|
1.7x
|
16
|
% |
14
|
% | ||||||||||||||||||||||||||
BREP Asia I (Jun 2013 / Dec 2017)
|
$ |
5,096,361
|
$ |
1,728,289
|
$ |
3,774,257
|
1.6x
|
15
|
% | $ |
4,049,838
|
1.9x
|
$ |
7,824,095
|
1.7x
|
21
|
% |
15
|
% | |||||||||||||||||||||||||
*BREP Asia II (Dec 2017 / Jun 2023)
|
7,208,070
|
4,785,471
|
2,787,120
|
1.2x
|
—
|
62,050
|
1.6x
|
2,849,170
|
1.2x
|
N/M
|
10
|
% | ||||||||||||||||||||||||||||||||
BREP
Co-Investment
(f)
|
7,055,974
|
170,135
|
1,587,692
|
2.1x
|
—
|
13,263,050
|
2.1x
|
14,850,742
|
2.1x
|
15
|
% |
16
|
% | |||||||||||||||||||||||||||||||
Total BREP
|
$ |
127,001,719
|
$ |
42,113,862
|
$ |
52,689,535
|
1.4x
|
4
|
% | $ |
122,989,021
|
2.2x
|
$ |
175,678,556
|
1.9x
|
17
|
% |
15
|
% | |||||||||||||||||||||||||
*Core+ BPP (Various) (g)
|
29,378,175
|
689,947
|
32,420,228
|
N/A
|
—
|
5,877,291
|
N/A
|
38,297,519
|
N/A
|
N/M
|
10
|
% | ||||||||||||||||||||||||||||||||
*Core+ BREIT (Various) (h)
|
12,532,379
|
N/M
|
13,104,041
|
N/A
|
—
|
258,935
|
N/A
|
13,362,976
|
N/A
|
N/M
|
10
|
% | ||||||||||||||||||||||||||||||||
*BREDS High-Yield (Various) (i)
|
13,856,187
|
4,489,213
|
3,310,277
|
1.1x
|
—
|
11,889,018
|
1.3x
|
15,199,295
|
1.3x
|
11
|
% |
11
|
% |
Fund (Investment Period
Beginning Date / Ending Date) (a)
|
Committed
Capital |
|
Available
Capital (b) |
|
Unrealized Investments
|
Realized Investments
|
Total Investments
|
Net IRRs (d)
|
||||||||||||||||||||||||||||||||||||
Value
|
|
MOIC (c)
|
|
% Public
|
|
Value
|
|
MOIC (c)
|
|
Value
|
|
MOIC (c)
|
|
Realized
|
|
Total
|
|
|||||||||||||||||||||||||||
|
(Dollars in Thousands, Except Where Noted)
|
|||||||||||||||||||||||||||||||||||||||||||
Corporate Private Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
BCP I (Oct 1987 / Oct 1993)
|
$ |
859,081
|
$ |
—
|
$ |
—
|
N/A
|
—
|
$ |
1,741,738
|
2.6x
|
$ |
1,741,738
|
2.6x
|
19
|
% |
19
|
% | ||||||||||||||||||||||||||
BCP II (Oct 1993 / Aug 1997)
|
1,361,100
|
—
|
—
|
N/A
|
—
|
3,256,819
|
2.5x
|
3,256,819
|
2.5x
|
32
|
% |
32
|
% | |||||||||||||||||||||||||||||||
BCP III (Aug 1997 / Nov 2002)
|
3,967,422
|
—
|
—
|
N/A
|
—
|
9,184,688
|
2.3x
|
9,184,688
|
2.3x
|
14
|
% |
14
|
% | |||||||||||||||||||||||||||||||
BCOM (Jun 2000 / Jun 2006)
|
2,137,330
|
24,575
|
13,493
|
N/A
|
—
|
2,953,649
|
1.4x
|
2,967,142
|
1.4x
|
6
|
% |
6
|
% | |||||||||||||||||||||||||||||||
BCP IV (Nov 2002 / Dec 2005)
|
6,773,182
|
198,964
|
178,378
|
2.5x
|
—
|
21,417,821
|
2.9x
|
21,596,199
|
2.9x
|
36
|
% |
36
|
% | |||||||||||||||||||||||||||||||
BCP V (Dec 2005 / Jan 2011)
|
21,013,658
|
1,039,805
|
736,918
|
0.7x
|
45
|
% |
37,166,622
|
1.9x
|
37,903,540
|
1.9x
|
9
|
% |
8
|
% | ||||||||||||||||||||||||||||||
BCP VI (Jan 2011 / May 2016)
|
15,192,447
|
1,652,514
|
12,566,484
|
1.7x
|
38
|
% |
14,834,583
|
2.1x
|
27,401,067
|
1.9x
|
18
|
% |
12
|
% | ||||||||||||||||||||||||||||||
*BCP VII (May 2016 / May 2022)
|
18,819,853
|
5,048,792
|
17,566,425
|
1.4x
|
1
|
% |
1,663,648
|
1.7x
|
19,230,073
|
1.4x
|
45
|
% |
19
|
% | ||||||||||||||||||||||||||||||
BCP VIII (TBD)
|
24,500,000
|
24,500,000
|
—
|
N/A
|
—
|
—
|
N/A
|
—
|
N/A
|
N/A
|
N/A
|
|||||||||||||||||||||||||||||||||
Energy I (Aug 2011 / Feb 2015)
|
2,435,285
|
224,784
|
1,611,101
|
1.6x
|
61
|
% |
2,699,524
|
2.0x
|
4,310,625
|
1.8x
|
18
|
% |
12
|
% | ||||||||||||||||||||||||||||||
*Energy II (Feb 2015 / Feb 2021)
|
4,913,607
|
749,717
|
4,347,043
|
1.3x
|
—
|
278,192
|
1.8x
|
4,625,235
|
1.3x
|
43
|
% |
7
|
% | |||||||||||||||||||||||||||||||
Energy III (TBD)
|
4,193,015
|
4,193,015
|
—
|
N/A
|
—
|
—
|
N/A
|
—
|
N/A
|
N/A
|
N/A
|
|||||||||||||||||||||||||||||||||
*BCP Asia (Dec 2017 / Dec 2023)
|
2,397,744
|
1,310,366
|
1,028,271
|
1.3x
|
6
|
% |
54,308
|
1.7x
|
1,082,579
|
1.3x
|
N/M
|
25
|
% | |||||||||||||||||||||||||||||||
Total Corporate Private Equity
|
$ |
108,563,724
|
$ |
38,942,532
|
$ |
38,048,113
|
1.5x
|
17
|
% | $ |
95,251,592
|
2.1x
|
$ |
133,299,705
|
1.9x
|
16
|
% |
15
|
% | |||||||||||||||||||||||||
*Core Private Equity (Jan 2017 / Jan 2021) (j)
|
4,755,077
|
1,385,354
|
4,325,980
|
1.3x
|
—
|
418,053
|
1.6x
|
4,744,033
|
1.3x
|
37
|
% |
15
|
% | |||||||||||||||||||||||||||||||
Tactical Opportunities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
*Tactical Opportunities (Various)
|
23,654,242
|
10,157,252
|
10,351,985
|
1.2x
|
11
|
% |
8,955,179
|
1.7x
|
19,307,164
|
1.4x
|
19
|
% |
10
|
% | ||||||||||||||||||||||||||||||
*Tactical Opportunities
Co-Investment
and Other (Various)
|
6,885,259
|
2,352,464
|
5,409,682
|
1.3x
|
4
|
% |
1,894,792
|
1.6x
|
7,304,474
|
1.4x
|
23
|
% |
14
|
% | ||||||||||||||||||||||||||||||
Total Tactical Opportunities
|
$ |
30,539,501
|
$ |
12,509,716
|
$ |
15,761,667
|
1.3x
|
9
|
% | $ |
10,849,971
|
1.7x
|
$ |
26,611,638
|
1.4x
|
20
|
% |
11
|
% | |||||||||||||||||||||||||
Strategic Partners (Secondaries)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Strategic Partners
I-V
(Various) (k)
|
11,862,623
|
1,732,094
|
1,092,247
|
N/M
|
—
|
16,645,510
|
N/M
|
17,737,757
|
1.5x
|
N/A
|
13
|
% | ||||||||||||||||||||||||||||||||
Strategic Partners VI (Apr 2014 / Apr 2016) (k)
|
4,362,750
|
1,140,935
|
1,488,888
|
N/M
|
—
|
3,111,382
|
N/M
|
4,600,270
|
1.5x
|
N/A
|
16
|
% | ||||||||||||||||||||||||||||||||
Strategic Partners VII (May 2016 / Mar 2019) (k)
|
7,489,970
|
2,506,624
|
5,556,596
|
N/M
|
—
|
1,546,950
|
N/M
|
7,103,546
|
1.5x
|
N/A
|
23
|
% | ||||||||||||||||||||||||||||||||
*Strategic Partners Real Assets II (May 2017 / Mar 2022) (k)
|
1,749,807
|
516,372
|
817,832
|
N/M
|
—
|
271,186
|
N/M
|
1,089,018
|
1.2x
|
N/A
|
17
|
% | ||||||||||||||||||||||||||||||||
*Strategic Partners VIII (Mar 2019 / Jul 2023) (k)
|
10,763,600
|
5,421,224
|
3,166,592
|
N/M
|
—
|
53,818
|
N/M
|
3,220,410
|
1.3x
|
N/A
|
N/M
|
|||||||||||||||||||||||||||||||||
*Strategic Partners Real Estate, SMA and Other (Various) (k)
|
6,606,978
|
2,096,602
|
2,498,143
|
N/M
|
—
|
1,189,081
|
N/M
|
3,687,224
|
1.3x
|
N/A
|
18
|
% | ||||||||||||||||||||||||||||||||
Total Strategic Partners (Secondaries)
|
$ |
42,835,728
|
$ |
13,413,851
|
$ |
14,620,298
|
N/M
|
—
|
$ |
22,817,927
|
N/M
|
$ |
37,438,225
|
1.5x
|
N/A
|
14
|
% | |||||||||||||||||||||||||||
*Infrastructure (Various)
|
13,659,163
|
11,309,149
|
2,407,643
|
1.0x
|
53
|
% |
—
|
N/A
|
2,407,643
|
1.0x
|
N/A
|
N/M
|
||||||||||||||||||||||||||||||||
Life Sciences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
*Clarus IV (Jan 2018 / Jan 2020)
|
910,000
|
547,667
|
467,471
|
1.5x
|
4
|
% |
3,323
|
N/M
|
470,794
|
1.5x
|
N/M
|
29
|
% | |||||||||||||||||||||||||||||||
BXLS V (Jan 2020 / Jan 2025)
|
3,194,630
|
3,194,630
|
—
|
N/A
|
—
|
—
|
N/A
|
—
|
N/A
|
N/A
|
N/A
|
Fund (Investment Period
Beginning Date / Ending Date) (a)
|
Committed
Capital |
|
Available
Capital (b) |
|
Unrealized Investments
|
Realized Investments
|
Total Investments
|
Net IRRs (d)
|
||||||||||||||||||||||||||||||||||||
Value
|
|
MOIC (c)
|
|
% Public
|
|
Value
|
|
MOIC (c)
|
|
Value
|
|
MOIC (c)
|
|
Realized
|
|
Total
|
|
|||||||||||||||||||||||||||
|
(Dollars in Thousands, Except Where Noted)
|
|||||||||||||||||||||||||||||||||||||||||||
Credit (l)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Mezzanine I (Jul 2007 / Oct 2011)
|
$ |
2,000,000
|
$ |
97,114
|
$ |
23,053
|
1.2x
|
—
|
$ |
4,772,316
|
1.6x
|
$ |
4,795,369
|
1.6x
|
N/A
|
17
|
% | |||||||||||||||||||||||||||
Mezzanine II (Nov 2011 / Nov 2016)
|
4,120,000
|
1,033,255
|
1,371,238
|
0.9x
|
—
|
5,273,460
|
1.6x
|
6,644,698
|
1.3x
|
N/A
|
11
|
% | ||||||||||||||||||||||||||||||||
*Mezzanine III (Sep 2016 / Sep 2021)
|
6,639,133
|
2,845,176
|
4,324,259
|
1.1x
|
1
|
% |
1,678,739
|
1.6x
|
6,002,998
|
1.2x
|
N/A
|
12
|
% | |||||||||||||||||||||||||||||||
Distressed I (Sep 2009 / May 2013)
|
3,253,143
|
85,000
|
121,458
|
0.2x
|
—
|
5,772,964
|
1.6x
|
5,894,422
|
1.4x
|
N/A
|
10
|
% | ||||||||||||||||||||||||||||||||
Distressed II (Jun 2013 / Jun 2018)
|
5,125,000
|
573,315
|
1,160,820
|
0.6x
|
9
|
% |
4,300,232
|
1.3x
|
5,461,052
|
1.1x
|
N/A
|
2
|
% | |||||||||||||||||||||||||||||||
*Distressed III (Dec 2017 / Dec 2022)
|
7,356,380
|
4,962,377
|
1,772,334
|
1.0x
|
1
|
% |
866,528
|
1.4x
|
2,638,862
|
1.1x
|
N/A
|
11
|
% | |||||||||||||||||||||||||||||||
Energy I (Nov 2015 / Nov 2018)
|
2,856,867
|
1,078,049
|
1,834,281
|
1.1x
|
—
|
1,013,466
|
1.7x
|
2,847,747
|
1.3x
|
N/A
|
10
|
% | ||||||||||||||||||||||||||||||||
*Energy II (Feb 2019 / Feb 2024)
|
3,616,081
|
2,973,803
|
671,512
|
1.0x
|
—
|
30,067
|
2.3x
|
701,579
|
1.1x
|
N/A
|
N/M
|
|||||||||||||||||||||||||||||||||
Euro
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
European Senior Debt (Feb 2015 / Feb 2019)
|
€
|
1,964,689
|
€
|
381,768
|
€
|
2,028,539
|
1.1x
|
2
|
% |
€
|
1,159,583
|
1.5x
|
€
|
3,188,122
|
1.2x
|
N/A
|
9
|
% | ||||||||||||||||||||||||||
*European Senior Debt II (Jun 2019 / Jun 2024)
|
€
|
3,403,585
|
€
|
3,117,425
|
€
|
292,468
|
1.0x
|
—
|
€
|
—
|
N/A
|
€
|
292,468
|
1.0x
|
N/A
|
N/M
|
||||||||||||||||||||||||||||
Total Credit
|
$ |
41,095,232
|
$ |
17,575,933
|
$ |
13,884,286
|
1.0x
|
2
|
% | $ |
25,026,993
|
1.5x
|
$ |
38,911,279
|
1.3x
|
N/A
|
11
|
% | ||||||||||||||||||||||||||
N/M | Not meaningful generally due to the limited time since initial investment. |
N/A | Not applicable. |
* | Represents funds that are currently in their investment period and open-ended funds. |
(a) | Excludes investment vehicles where Blackstone does not earn fees. |
(b) |
Available Capital represents total investable capital commitments, including
side-by-side,
adjusted for certain expenses and expired or recallable capital and may include leverage, less invested capital. This amount is not reduced by outstanding commitments to investments.
|
(c) | Multiple of Invested Capital (“MOIC”) represents carrying value, before management fees, expenses and Performance Revenues, divided by invested capital. |
(d) | Net Internal Rate of Return (“IRR”) represents the annualized inception to December 31, 2019 IRR on total invested capital based on realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues. IRRs are calculated using actual timing of limited partner cash flows. Initial inception date cash flow may differ from the Investment Period Beginning Date. |
(e) | The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II performance reflects a 7% Realized Net IRR and a 7% Total Net IRR. |
(f) |
BREP
Co-Investment
represents
co-investment
capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each
co-investment’s
realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.
|
(g) | BPP represents the core+ real estate funds which invest with a more modest risk profile and lower leverage. |
(h) | Unrealized Investment Value reflects BREIT’s net asset value as of December 31, 2019. Realized Investment Value represents BREIT’s cash distributions, net of servicing fees. BREIT net return reflects a per share blended return, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. These returns are not representative of the returns experienced by any particular investor or share class. Inception to date net returns are presented on an annualized basis and are from January 1, 2017. |
(i) | BREDS High-Yield represents the flagship real estate debt drawdown funds only and excludes BREDS High-Grade. |
(j) | BCEP, or Blackstone Core Equity Partners, is a core private equity fund which invests with a more modest risk profile and longer hold period. |
(k) | Realizations are treated as return of capital until fully recovered and therefore unrealized and realized MOICs are not meaningful. If information is not available on a timely basis, returns are calculated from results that are reported on a three month lag. |
(l) | Funds presented represent the flagship credit drawdown funds only. The Total Credit Net IRR is the combined IRR of the credit drawdown funds presented. |
|
Year Ended December 31,
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|
|||||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||
Management Fees, Net
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Base Management Fees
|
$ |
1,116,183
|
$ |
985,399
|
$ |
872,191
|
$ |
130,784
|
13
|
% | $ |
113,208
|
13
|
% | |||||||||||||||
Transaction and Other Fees, Net
|
175,831
|
152,513
|
82,781
|
23,318
|
15
|
% |
69,732
|
84
|
% | ||||||||||||||||||||
Management Fee Offsets
|
(26,836
|
) |
(11,442
|
) |
(15,934
|
) |
(15,394
|
) |
135
|
% |
4,492
|
-28
|
% | ||||||||||||||||
Total Management Fees, Net
|
1,265,178
|
1,126,470
|
939,038
|
138,708
|
12
|
% |
187,432
|
20
|
% | ||||||||||||||||||||
Fee Related Performance Revenues
|
198,237
|
124,502
|
79,500
|
73,735
|
59
|
% |
45,002
|
57
|
% | ||||||||||||||||||||
Fee Related Compensation
|
(531,259
|
) |
(459,430
|
) |
(437,311
|
) |
(71,829
|
) |
16
|
% |
(22,119
|
) |
5
|
% | |||||||||||||||
Other Operating Expenses
|
(168,332
|
) |
(146,260
|
) |
(136,042
|
) |
(22,072
|
) |
15
|
% |
(10,218
|
) |
8
|
% | |||||||||||||||
Fee Related Earnings
|
763,824
|
645,282
|
445,185
|
118,542
|
18
|
% |
200,097
|
45
|
% | ||||||||||||||||||||
Realized Performance Revenues
|
1,032,337
|
914,984
|
2,141,374
|
117,353
|
13
|
% |
(1,226,390
|
) |
-57
|
% | |||||||||||||||||||
Realized Performance Compensation
|
(374,096
|
) |
(284,319
|
) |
(751,526
|
) |
(89,777
|
) |
32
|
% |
467,207
|
-62
|
% | ||||||||||||||||
Realized Principal Investment Income
|
79,733
|
92,525
|
255,903
|
(12,792
|
) |
-14
|
% |
(163,378
|
) |
-64
|
% | ||||||||||||||||||
Net Realizations
|
737,974
|
723,190
|
1,645,751
|
14,784
|
2
|
% |
(922,561
|
) |
-56
|
% | |||||||||||||||||||
Segment Distributable Earnings
|
$ |
1,501,798
|
$ |
1,368,472
|
$ |
2,090,936
|
$ |
133,326
|
10
|
% | $ |
(722,464
|
) |
-35
|
% | ||||||||||||||
N/M | Not meaningful. |
|
Year Ended December 31,
|
December 31, 2019
Inception to Date
|
||||||||||||||||||||||||||||||||||||||
|
2019
|
2018
|
2017
|
Realized
|
Total
|
|||||||||||||||||||||||||||||||||||
Fund (a)
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
||||||||||||||||||||
BREP IV
|
90%
|
66%
|
-14%
|
-12%
|
3%
|
3%
|
48%
|
28%
|
22%
|
12%
|
||||||||||||||||||||||||||||||
BREP V
|
16%
|
13%
|
-6%
|
-5%
|
11%
|
10%
|
15%
|
12%
|
14%
|
11%
|
||||||||||||||||||||||||||||||
BREP VI
|
34%
|
28%
|
7%
|
5%
|
28%
|
23%
|
18%
|
13%
|
17%
|
13%
|
||||||||||||||||||||||||||||||
BREP VII
|
15%
|
12%
|
3%
|
2%
|
22%
|
17%
|
31%
|
22%
|
23%
|
16%
|
||||||||||||||||||||||||||||||
BREP VIII
|
20%
|
15%
|
20%
|
14%
|
24%
|
16%
|
36%
|
26%
|
23%
|
16%
|
||||||||||||||||||||||||||||||
BREP International II (b)(c)(d)
|
N/A
|
N/A
|
34%
|
29%
|
23%
|
21%
|
10%
|
8%
|
10%
|
8%
|
||||||||||||||||||||||||||||||
BREP Europe III (b)
|
1%
|
-1%
|
-18%
|
-15%
|
25%
|
20%
|
30%
|
21%
|
23%
|
14%
|
||||||||||||||||||||||||||||||
BREP Europe IV (b)
|
13%
|
10%
|
20%
|
14%
|
33%
|
26%
|
32%
|
23%
|
23%
|
17%
|
||||||||||||||||||||||||||||||
BREP Europe V (b)
|
20%
|
14%
|
25%
|
17%
|
N/M
|
N/M
|
68%
|
51%
|
24%
|
16%
|
||||||||||||||||||||||||||||||
BREP Asia I
|
19%
|
14%
|
10%
|
7%
|
27%
|
19%
|
29%
|
21%
|
22%
|
15%
|
||||||||||||||||||||||||||||||
BREP Asia II
|
27%
|
16%
|
N/M
|
N/M
|
N/A
|
N/A
|
N/M
|
N/M
|
25%
|
10%
|
||||||||||||||||||||||||||||||
BREP
Co-Investment
(e)
|
20%
|
13%
|
-1%
|
—
|
24%
|
22%
|
17%
|
15%
|
18%
|
16%
|
||||||||||||||||||||||||||||||
BPP (f)
|
10%
|
8%
|
11%
|
10%
|
13%
|
10%
|
N/M
|
N/M
|
12%
|
10%
|
||||||||||||||||||||||||||||||
BREDS High-Yield (g)
|
17%
|
13%
|
9%
|
4%
|
15%
|
11%
|
15%
|
11%
|
15%
|
11%
|
||||||||||||||||||||||||||||||
BREDS High-Grade (g)
|
8%
|
7%
|
7%
|
5%
|
N/M
|
N/M
|
8%
|
7%
|
8%
|
6%
|
||||||||||||||||||||||||||||||
BREDS Liquid (h)
|
13%
|
10%
|
6%
|
4%
|
11%
|
8%
|
N/A
|
N/A
|
11%
|
8%
|
||||||||||||||||||||||||||||||
BXMT (i)
|
N/A
|
25%
|
N/A
|
7%
|
N/A
|
16%
|
N/A
|
N/A
|
N/A
|
14%
|
||||||||||||||||||||||||||||||
BREIT (j)
|
N/A
|
12%
|
N/A
|
8%
|
N/A
|
10%
|
N/A
|
N/A
|
N/A
|
10%
|
N/M | Not meaningful generally due to the limited time since initial investment. |
N/A | Not applicable. |
(a) | Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues. |
(b) | Euro-based internal rates of return. |
(c) | The 8% Realized Net IRR and 8% Total Net IRR exclude investors that opted out of the Hilton investment opportunity. Overall BREP International II Performance reflects a 7% Realized Net IRR and a 7% Total Net IRR. |
(d) | For the year ended December 31, 2019, the appreciation of our remaining assets has resulted in the fund exceeding the preferred return. |
(e) |
BREP
Co-Investment
represents
co-investment
capital raised for various BREP investments. The Net IRR reflected is calculated by aggregating each
co-investment’s
realized proceeds and unrealized value, as applicable, after management fees, expenses and Performance Revenues.
|
(f) | BPP represents the core+ real estate funds which invest with a more modest risk profile and lower leverage. |
(g) | Effective March 31, 2019, the former BREDS Drawdown composite is presented by its components, BREDS High-Yield and BREDS High-Grade. BREDS High-Yield represents the flagship real estate debt drawdown funds and excludes the BREDS High-Grade drawdown fund, which has a different risk-return profile. Inception to date returns are from July 1, 2009 and July 1, 2017 for BREDS High-Yield and BREDS High-Grade, respectively. Prior periods have been updated to reflect this presentation. |
(h) | BREDS Liquid represents BREDS funds that invest in liquid real estate debt securities, except funds in liquidation and insurance mandates with specific investment objectives. Effective June 30, 2018, the returns presented represent summarized asset-weighted gross and net rates of return. Inception to Date returns are presented on an annualized basis. Prior periods have been updated to reflect such rates of return. |
(i) | Reflects annualized return of a shareholder invested in BXMT as of the beginning of each period presented, assuming reinvestment of all dividends received during the period, and net of all fees and expenses incurred by BXMT. Return incorporates the closing NYSE stock price as of each period end. Inception to date returns are from May 22, 2013. |
(j) | Effective September 30, 2019, the BREIT return reflects a per share blended return for each respective period, assuming BREIT had a single share class, reinvestment of all dividends received during the period, and no upfront selling commission, net of all fees and expenses incurred by BREIT. These returns are not representative of the returns experienced by any particular investor or share class. Inception to date returns are presented on an annualized basis and are from January 1, 2017. Prior periods have been updated to reflect BREIT’s per share blended return. The BREIT returns presented in filings prior to September 30, 2019 were for BREIT’s Class S investors. |
|
Year Ended December 31,
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|
|||||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||
Management and Advisory Fees, Net
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Base Management Fees
|
$ |
986,482
|
$ |
785,223
|
$ |
724,818
|
$ |
201,259
|
26
|
% | $ |
60,405
|
8
|
% | |||||||||||||||
Transaction, Advisory and Other Fees, Net
|
115,174
|
58,165
|
57,624
|
57,009
|
98
|
% |
541
|
1
|
% | ||||||||||||||||||||
Management Fee Offsets
|
(37,327
|
) |
(13,504
|
) |
(18,007
|
) |
(23,823
|
) |
176
|
% |
4,503
|
-25
|
% | ||||||||||||||||
Total Management and Advisory Fees, Net
|
1,064,329
|
829,884
|
764,435
|
234,445
|
28
|
% |
65,449
|
9
|
% | ||||||||||||||||||||
Fee Related Compensation
|
(423,752
|
) |
(375,446
|
) |
(347,562
|
) |
(48,306
|
) |
13
|
% |
(27,884
|
) |
8
|
% | |||||||||||||||
Other Operating Expenses
|
(160,010
|
) |
(133,096
|
) |
(120,997
|
) |
(26,914
|
) |
20
|
% |
(12,099
|
) |
10
|
% | |||||||||||||||
Fee Related Earnings
|
480,567
|
321,342
|
295,876
|
159,225
|
50
|
% |
25,466
|
9
|
% | ||||||||||||||||||||
Realized Performance Revenues
|
468,992
|
757,406
|
1,157,188
|
(288,414
|
) |
-38
|
% |
(399,782
|
) |
-35
|
% | ||||||||||||||||||
Realized Performance Compensation
|
(192,566
|
) |
(318,167
|
) |
(404,544
|
) |
125,601
|
-39
|
% |
86,377
|
-21
|
% | |||||||||||||||||
Realized Principal Investment Income
|
90,249
|
109,731
|
154,837
|
(19,482
|
) |
-18
|
% |
(45,106
|
) |
-29
|
% | ||||||||||||||||||
Net Realizations
|
366,675
|
548,970
|
907,481
|
(182,295
|
) |
-33
|
% |
(358,511
|
) |
-40
|
% | ||||||||||||||||||
Segment Distributable Earnings
|
$ |
847,242
|
$ |
870,312
|
$ |
1,203,357
|
$ |
(23,070
|
) |
-3
|
% | $ |
(333,045
|
) |
-28
|
% | |||||||||||||
N/M | Not meaningful. |
|
Year Ended December 31,
|
December 31, 2019
Inception to Date |
||||||||||||||||||||||||||||||||||||||
|
2019
|
2018
|
2017
|
Realized
|
Total
|
|||||||||||||||||||||||||||||||||||
Fund (a)
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
||||||||||||||||||||
BCP IV
|
68%
|
51%
|
6%
|
5%
|
1%
|
1%
|
50%
|
36%
|
50%
|
36%
|
||||||||||||||||||||||||||||||
BCP V
|
-14%
|
-4%
|
-6%
|
-5%
|
12%
|
9%
|
11%
|
9%
|
10%
|
8%
|
||||||||||||||||||||||||||||||
BCP VI
|
4%
|
3%
|
17%
|
14%
|
27%
|
22%
|
24%
|
18%
|
17%
|
12%
|
||||||||||||||||||||||||||||||
BCP VII
|
24%
|
18%
|
43%
|
28%
|
29%
|
12%
|
64%
|
45%
|
31%
|
19%
|
||||||||||||||||||||||||||||||
BEP I
|
—
|
—
|
18%
|
15%
|
16%
|
13%
|
22%
|
18%
|
15%
|
12%
|
||||||||||||||||||||||||||||||
BEP II
|
-5%
|
-3%
|
32%
|
20%
|
15%
|
6%
|
59%
|
43%
|
13%
|
7%
|
||||||||||||||||||||||||||||||
BCOM
|
-22%
|
-23%
|
3%
|
2%
|
-3%
|
-4%
|
13%
|
6%
|
13%
|
6%
|
||||||||||||||||||||||||||||||
BCEP
|
24%
|
20%
|
N/M
|
N/M
|
N/M
|
N/M
|
41%
|
37%
|
18%
|
15%
|
||||||||||||||||||||||||||||||
Tactical Opportunities
|
10%
|
6%
|
13%
|
9%
|
16%
|
13%
|
23%
|
19%
|
14%
|
10%
|
||||||||||||||||||||||||||||||
Tactical Opportunities
Co-Investment
and Other
|
15%
|
14%
|
13%
|
11%
|
28%
|
21%
|
26%
|
23%
|
16%
|
14%
|
||||||||||||||||||||||||||||||
Strategic Partners
I-V
(b)
|
—
|
-1%
|
9%
|
6%
|
12%
|
11%
|
N/A
|
N/A
|
16%
|
13%
|
||||||||||||||||||||||||||||||
Strategic Partners VI (b)
|
-4%
|
-5%
|
18%
|
15%
|
15%
|
12%
|
N/A
|
N/A
|
21%
|
16%
|
||||||||||||||||||||||||||||||
Strategic Partners VII (b)
|
12%
|
10%
|
32%
|
26%
|
103%
|
82%
|
N/A
|
N/A
|
30%
|
23%
|
||||||||||||||||||||||||||||||
Strategic Partners Real Assets II (b)
|
21%
|
17%
|
33%
|
22%
|
N/M
|
N/M
|
N/A
|
N/A
|
23%
|
17%
|
||||||||||||||||||||||||||||||
Strategic Partners Real Estate, SMA and Other (b)
|
19%
|
18%
|
15%
|
13%
|
22%
|
17%
|
N/A
|
N/A
|
21%
|
18%
|
N/M | Not meaningful generally due to the limited time since initial investment. |
N/A | Not applicable. |
(a) | Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Revenues. |
(b) | Realizations are treated as return of capital until fully recovered and therefore inception to date realized returns are not applicable. Returns are calculated from results that are reported on a three month lag. |
|
Year Ended December 31,
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|
|||||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||
Management Fees, Net
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Base Management Fees
|
$ |
556,730
|
$ |
519,782
|
$ |
516,048
|
$ |
36,948
|
7%
|
$ |
3,734
|
1%
|
|||||||||||||||||
Transaction and Other Fees, Net
|
3,533
|
3,180
|
2,980
|
353
|
11%
|
200
|
7%
|
||||||||||||||||||||||
Management Fee Offsets
|
(138
|
) |
(93
|
) |
(93
|
) |
(45
|
) |
48%
|
—
|
—
|
||||||||||||||||||
Total Management Fees, Net
|
560,125
|
522,869
|
518,935
|
37,256
|
7%
|
3,934
|
1%
|
||||||||||||||||||||||
Fee Related Compensation
|
(151,960
|
) |
(162,172
|
) |
(146,924
|
) |
10,212
|
-6%
|
(15,248
|
) |
10%
|
||||||||||||||||||
Other Operating Expenses
|
(81,999
|
) |
(77,772
|
) |
(68,265
|
) |
(4,227
|
) |
5%
|
(9,507
|
) |
14%
|
|||||||||||||||||
Fee Related Earnings
|
326,166
|
282,925
|
303,746
|
43,241
|
15%
|
(20,821
|
) |
-7%
|
|||||||||||||||||||||
Realized Performance Revenues
|
126,576
|
42,419
|
154,343
|
84,157
|
198%
|
(111,924
|
) |
-73%
|
|||||||||||||||||||||
Realized Performance Compensation
|
(24,301
|
) |
(21,792
|
) |
(40,707
|
) |
(2,509
|
) |
12%
|
18,915
|
-46%
|
||||||||||||||||||
Realized Principal Investment Income
|
21,707
|
17,039
|
9,074
|
4,668
|
27%
|
7,965
|
88%
|
||||||||||||||||||||||
Net Realizations
|
123,982
|
37,666
|
122,710
|
86,316
|
229%
|
(85,044
|
) |
-69%
|
|||||||||||||||||||||
Segment Distributable Earnings
|
$ |
450,148
|
$ |
320,591
|
$ |
426,456
|
$ |
129,557
|
40%
|
$ |
(105,865
|
) |
-25%
|
||||||||||||||||
N/M | Not meaningful. |
|
Invested Performance
Revenue Eligible Assets Under Management |
Estimated % Above
High Water Mark/Benchmark (a) |
||||||||||||||||||||||
|
December 31,
|
December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
||||||||||||
|
(Dollars in Thousands)
|
|
|
|
|
|
|
|||||||||||||||||
Hedge Fund Solutions Managed Funds (b)
|
$ |
43,789,081
|
$ |
42,393,275
|
$ |
41,238,330
|
91%
|
46%
|
91%
|
(a) | Estimated % Above High Water Mark/Benchmark represents the percentage of Invested Performance Revenue Eligible Assets Under Management that as of the dates presented would earn performance fees when the applicable Hedge Fund Solutions managed fund has positive investment performance relative to a benchmark, where applicable. Incremental positive performance in the applicable Blackstone Funds may cause additional assets to reach their respective High Water Mark or clear a benchmark return, thereby resulting in an increase in Estimated % Above High Water Mark/Benchmark. |
(b) | For the Hedge Fund Solutions managed funds, at December 31, 2019, the incremental appreciation needed for the 9% of Invested Performance Revenue Eligible Assets Under Management below their respective High Water Marks/Benchmarks to reach their respective High Water Marks/Benchmarks was $504.3 million, a decrease of $352.4 million, compared to $856.7 million at December 31, 2018. Of the Invested Performance Revenue Eligible Assets Under Management below their respective High Water Marks/Benchmarks as of December 31, 2019, 33% were within 5% of reaching their respective High Water Mark. |
|
Average Annual Returns (a)
|
|||||||||||||||||||||||||||||||
|
Periods Ended December 31, 2019
|
|||||||||||||||||||||||||||||||
|
One Year
|
Three Year
|
Five Year
|
Historical
|
||||||||||||||||||||||||||||
Composite
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
||||||||||||||||
BAAM Principal Solutions Composite (b)
|
8%
|
7%
|
6%
|
5%
|
5%
|
4%
|
7%
|
6%
|
(a) | Composite returns present a summarized asset-weighted return measure to evaluate the overall performance of the applicable class of Blackstone Funds. |
(b) |
BAAM’s Principal Solutions (“BPS”) Composite covers the period from January 2000 to present, although BAAM’s inception date is September 1990. The BPS Composite includes only BAAM-managed commingled and customized multi-manager funds and accounts. None of the other platforms/strategies managed through the Blackstone Hedge Fund Solutions Group are included in the composite (except for investments by BPS funds/accounts directly into those platforms/strategies). BAAM-managed funds in liquidation and
non-fee-paying
assets (in the case of net returns) are excluded from the composite. The historical return is from January 1, 2000.
|
|
Year Ended December 31,
|
2019 vs. 2018
|
2018 vs. 2017
|
||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
|
|||||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||||||
Management Fees, Net
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Base Management Fees
|
$ |
586,535
|
$ |
553,921
|
$ |
567,334
|
$ |
32,614
|
6%
|
$ |
(13,413
|
) |
-2%
|
||||||||||||||||
Transaction and Other Fees, Net
|
19,882
|
15,640
|
13,431
|
4,242
|
27%
|
2,209
|
16%
|
||||||||||||||||||||||
Management Fee Offsets
|
(11,813
|
) |
(12,332
|
) |
(32,382
|
) |
519
|
-4%
|
20,050
|
-62%
|
|||||||||||||||||||
Total Management Fees, Net
|
594,604
|
557,229
|
548,383
|
37,375
|
7%
|
8,846
|
2%
|
||||||||||||||||||||||
Fee Related Performance Revenues
|
13,764
|
(666
|
) |
89,945
|
14,430
|
N/M
|
(90,611
|
) |
N/M
|
||||||||||||||||||||
Fee Related Compensation
|
(229,607
|
) |
(219,098
|
) |
(253,842
|
) |
(10,509
|
) |
5%
|
34,744
|
-14%
|
||||||||||||||||||
Other Operating Expenses
|
(160,801
|
) |
(131,200
|
) |
(99,562
|
) |
(29,601
|
) |
23%
|
(31,638
|
) |
32%
|
|||||||||||||||||
Fee Related Earnings
|
217,960
|
206,265
|
284,924
|
11,695
|
6%
|
(78,659
|
) |
-28%
|
|||||||||||||||||||||
Realized Performance Revenues
|
32,737
|
96,962
|
194,902
|
(64,225
|
) |
-66%
|
(97,940
|
) |
-50%
|
||||||||||||||||||||
Realized Performance Compensation
|
(12,972
|
) |
(53,863
|
) |
(100,834
|
) |
40,891
|
-76%
|
46,971
|
-47%
|
|||||||||||||||||||
Realized Principal Investment Income
|
32,466
|
16,763
|
16,380
|
15,703
|
94%
|
383
|
2%
|
||||||||||||||||||||||
Net Realizations
|
52,231
|
59,862
|
110,448
|
(7,631
|
) |
-13%
|
(50,586
|
) |
-46%
|
||||||||||||||||||||
Segment Distributable Earnings
|
$ |
270,191
|
$ |
266,127
|
$ |
395,372
|
$ |
4,064
|
2%
|
$ |
(129,245
|
) |
-33%
|
||||||||||||||||
N/M | Not meaningful. |
|
Year Ended December 31,
|
Inception to
December 31, 2019 |
||||||||||||||||||||||||||||||
|
2019
|
2018
|
2017
|
Total
|
||||||||||||||||||||||||||||
Composite (a)
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
||||||||||||||||
Performing Credit Strategies (b)
|
13%
|
10%
|
9%
|
6%
|
11%
|
6%
|
14%
|
9%
|
||||||||||||||||||||||||
Distressed Strategies (c)
|
-4%
|
-6%
|
-2%
|
-2%
|
9%
|
6%
|
10%
|
6%
|
(a) | Net returns are based on the change in carrying value (realized and unrealized) after management fees, expenses and Performance Allocations, net of tax advances. |
(b) |
Performing Credit Strategies include mezzanine lending funds, middle market direct lending funds, including our BDC, and other performing credit strategy funds. Performing Credit Strategies’ returns represent the IRR of the combined cash flows of the
fee-earning
funds exceeding $100 million of fair value at each respective quarter end as well as the Blackstone Funds that were contributed to GSO as part of Blackstone’s acquisition of GSO in March 2008. Effective December 31, 2019 Performing Credit Strategies’ returns exclude funds in liquidation. The inception to date returns are from July 16, 2007. Prior periods have been updated to reflect this presentation.
|
(c) |
Distressed Strategies include stressed/distressed funds, credit alpha strategies and energy strategies. Distressed Strategies’ returns represent the IRR of the combined cash flows of the
fee-earning
funds exceeding $100 million of fair value at each respective quarter end. Effective December 31, 2019 Distressed Strategies’ returns exclude funds in liquidation. The inception to date returns are from August 1, 2005. Prior periods have been updated to reflect this presentation.
|
(a) | This adjustment removes Transaction-Related Charges, which are excluded from Blackstone’s segment presentation. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. |
(b) | This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation. This amount includes amortization of intangibles associated with Blackstone’s investment in Pátria, which is accounted for under the equity method. |
(c) |
This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by
non-controlling
interests.
|
(d) | This adjustment removes Unrealized Performance Revenues on a segment basis. The Segment Adjustment represents the add back of performance revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation. |
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
|
(Dollars in Thousands)
|
||||||||||||
GAAP Unrealized Performance Allocations
|
$ |
1,126,332
|
$ |
561,373
|
$ |
(105,473
|
) | ||||||
Segment Adjustment
|
336
|
(210
|
) |
41
|
|||||||||
Unrealized Performance Revenues
|
$ |
1,126,668
|
$ |
561,163
|
$ |
(105,432
|
) | ||||||
(e) | This adjustment removes Unrealized Performance Allocations Compensation. |
(f) |
This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis. The Segment Adjustment represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by
non-controlling
interests.
|
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
|
(Dollars in Thousands)
|
||||||||||||
GAAP Unrealized Principal Investment Income
|
$ |
215,003
|
$ |
49,917
|
$ |
42,605
|
|||||||
Segment Adjustment
|
(101,676
|
) |
(115,768
|
) |
(173,811
|
) | |||||||
Unrealized Principal Investment Income (Loss)
|
$ |
113,327
|
$ |
(65,851
|
) | $ |
(131,206
|
) | |||||
(g) |
This adjustment removes Other Revenues on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of certain Transaction-Related Charges. For the year ended December 31, 2018, Transaction-Related Charges included $580.9 million of Other Revenues received upon the conclusion of Blackstone’s investment
sub-advisory
relationship with FS Investments’ funds.
|
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
|
(Dollars in Thousands)
|
||||||||||||
GAAP Other Revenue
|
$ |
79,993
|
$ |
672,317
|
$ |
(133,229
|
) | ||||||
Segment Adjustment
|
(546
|
) |
(582,849
|
) |
(6,822
|
) | |||||||
Other Revenues
|
$ |
79,447
|
$ |
89,468
|
$ |
(140,051
|
) | ||||||
(h) | This adjustment removes Equity-Based Compensation on a segment basis. |
(i) |
Taxes represent the total GAAP tax provision adjusted to include only the current tax provision (benefit) calculated on Income (Loss) Before Provision (Benefit) for Taxes and adjusted to exclude the tax impact of any divestitures. Related Payables represent
tax-related
payables including the amount payable under the Tax Receivable Agreement.
|
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
|
(Dollars in Thousands)
|
||||||||||||
Taxes
|
$ |
140,416
|
$ |
90,022
|
$ |
101,531
|
|||||||
Related Payables
|
55,743
|
63,843
|
88,457
|
||||||||||
Taxes and Related Payables
|
$ |
196,159
|
$ |
153,865
|
$ |
189,988
|
|||||||
(j) | This adjustment removes Interest and Dividend Revenue less Interest Expense on a segment basis. The Segment Adjustment represents (1) the add back of Other Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of interest expense associated with the Tax Receivable Agreement. |
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
|
(Dollars in Thousands)
|
||||||||||||
GAAP Interest and Dividend Revenue
|
$ |
182,398
|
$ |
171,947
|
$ |
139,696
|
|||||||
Segment Adjustment
|
10,195
|
9,816
|
3,224
|
||||||||||
Interest and Dividend Revenue
|
192,593
|
181,763
|
142,920
|
||||||||||
GAAP Interest Expense
|
199,648
|
163,990
|
197,486
|
||||||||||
Segment Adjustment
|
(4,614
|
) |
(4,152
|
) |
(4,648
|
) | |||||||
Interest Expense
|
195,034
|
159,838
|
192,838
|
||||||||||
Net Interest Income (Loss)
|
$ |
(2,441
|
) | $ |
21,925
|
$ |
(49,918
|
) | |||||
(k) | This adjustment removes the total segment amounts of Realized Performance Revenues. |
(l) | This adjustment removes the total segment amounts of Realized Performance Compensation. |
(m) | This adjustment removes the total segment amount of Realized Principal Investment Income. |
(n) | This adjustment adds back Interest Expense on a segment basis. |
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in Thousands)
|
||||||||
Investments of Consolidated Blackstone Funds
|
$ |
8,380,698
|
$ |
8,376,338
|
|||||
Equity Method Investments
|
|
|
|||||||
Partnership Investments
|
4,035,675
|
3,649,423
|
|||||||
Accrued Performance Allocations
|
7,180,449
|
5,883,924
|
|||||||
Corporate Treasury Investments
|
2,419,587
|
2,206,493
|
|||||||
Other Investments
|
265,273
|
260,853
|
|||||||
Total GAAP Investments
|
$ |
22,281,682
|
$ |
20,377,031
|
|||||
Accrued Performance Allocations - GAAP
|
$ |
7,180,449
|
$ |
5,883,924
|
|||||
Impact of Consolidation (a)
|
384
|
—
|
|||||||
Due From Affiliates - GAAP (b)
|
154,980
|
33,419
|
|||||||
Less: Accrued Performance Compensation - GAAP (c)
|
(3,021,899
|
) |
(2,394,747
|
) | |||||
Net Accrued Performance Revenues
|
$ |
4,313,914
|
$ |
3,522,596
|
|||||
(a) | This adjustment adds back investments in consolidated Blackstone Funds which have been eliminated in consolidation. |
(b) | Represents GAAP accrued performance revenue recorded within Due from Affiliates. |
(c) | Represents GAAP accrued performance compensation associated with Accrued Performance Allocations and is recorded within Accrued Compensation and Benefits and Due to Affiliates. |
|
Blackstone and
General Partner
|
Senior Managing Directors
and Certain Other Professionals (a) |
|||||||||||||||
Fund
|
Original
Commitment |
|
Remaining
Commitment |
|
Original
Commitment |
|
Remaining
Commitment |
|
|||||||||
|
(Dollars in Thousands)
|
||||||||||||||||
Real Estate
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
BREP VII
|
$ |
300,000
|
$ |
41,987
|
$ |
100,000
|
$ |
13,996
|
|||||||||
BREP VIII
|
300,000
|
56,952
|
100,000
|
18,984
|
|||||||||||||
BREP IX
|
300,000
|
246,615
|
100,000
|
82,205
|
|||||||||||||
BREP Europe III
|
100,000
|
13,231
|
35,000
|
4,410
|
|||||||||||||
BREP Europe IV
|
130,000
|
23,540
|
43,333
|
7,847
|
|||||||||||||
BREP Europe V
|
150,000
|
34,995
|
43,333
|
10,110
|
|||||||||||||
BREP Europe VI
|
130,000
|
122,768
|
43,333
|
40,923
|
|||||||||||||
BREP Asia I
|
50,000
|
14,806
|
16,667
|
4,935
|
|||||||||||||
BREP Asia II
|
70,707
|
47,267
|
23,569
|
15,756
|
|||||||||||||
BREDS II
|
50,000
|
6,227
|
16,667
|
2,076
|
|||||||||||||
BREDS III
|
50,000
|
21,545
|
16,667
|
7,182
|
|||||||||||||
BREDS IV
|
50,000
|
50,000
|
—
|
—
|
|||||||||||||
BPP
|
75,994
|
5,327
|
—
|
—
|
|||||||||||||
Other (b)
|
9,752
|
3,054
|
—
|
—
|
|||||||||||||
Private Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
BCP V
|
629,356
|
30,642
|
—
|
—
|
|||||||||||||
BCP VI
|
719,718
|
91,540
|
250,000
|
31,797
|
|||||||||||||
BCP VII
|
500,000
|
164,618
|
225,000
|
74,078
|
|||||||||||||
BCP VIII
|
500,000
|
500,000
|
225,000
|
225,000
|
|||||||||||||
BEP I
|
50,000
|
4,728
|
—
|
—
|
|||||||||||||
BEP II
|
80,000
|
21,813
|
26,667
|
7,271
|
|||||||||||||
BEP III
|
80,000
|
80,000
|
26,667
|
26,667
|
|||||||||||||
BCEP
|
120,000
|
35,179
|
18,992
|
5,568
|
|||||||||||||
BCP Asia
|
40,000
|
26,675
|
13,333
|
8,892
|
|||||||||||||
Tactical Opportunities
|
408,657
|
208,225
|
136,219
|
69,408
|
|||||||||||||
Strategic Partners
|
737,539
|
463,092
|
90,627
|
52,595
|
|||||||||||||
BIP
|
168,632
|
139,709
|
—
|
—
|
|||||||||||||
BXLS
|
10,500
|
6,780
|
—
|
—
|
|||||||||||||
Other (b)
|
265,974
|
34,676
|
—
|
—
|
|||||||||||||
Hedge Fund Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Strategic Alliance
|
50,000
|
2,033
|
—
|
—
|
|||||||||||||
Strategic Alliance II
|
50,000
|
1,482
|
—
|
—
|
|||||||||||||
Strategic Alliance III
|
22,000
|
11,880
|
—
|
—
|
|||||||||||||
Strategic Holdings LP
|
154,610
|
83,379
|
—
|
—
|
|||||||||||||
Strategic Holdings II LP
|
50,000
|
50,000
|
—
|
—
|
|||||||||||||
Other (b)
|
3,239
|
1,667
|
—
|
—
|
|
Blackstone and
General Partner
|
Senior Managing Directors
and Certain Other Professionals (a) |
|||||||||||||||
Fund
|
Original
Commitment |
|
Remaining
Commitment |
|
Original
Commitment |
|
Remaining
Commitment |
|
|||||||||
|
(Dollars in Thousands)
|
||||||||||||||||
Credit
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Capital Opportunities Fund II LP
|
$ |
120,000
|
$ |
30,218
|
$ |
110,101
|
$ |
27,726
|
|||||||||
Capital Opportunities Fund III LP
|
130,783
|
68,905
|
30,688
|
16,569
|
|||||||||||||
GSO European Senior Debt Fund LP
|
63,000
|
16,547
|
56,992
|
14,969
|
|||||||||||||
GSO European Senior Debt Fund II LP
|
77,182
|
69,773
|
26,989
|
25,657
|
|||||||||||||
GSO Capital Solutions
|
50,000
|
5,008
|
27,666
|
2,771
|
|||||||||||||
GSO Capital Solutions II
|
125,000
|
51,695
|
119,959
|
49,610
|
|||||||||||||
GSO Capital Solutions III
|
151,000
|
123,656
|
31,395
|
26,923
|
|||||||||||||
GSO Energy Select Opportunities Fund
|
80,000
|
41,247
|
74,741
|
38,535
|
|||||||||||||
GSO Energy Select Opportunities Fund II
|
150,000
|
139,917
|
25,222
|
23,523
|
|||||||||||||
GSO Credit Alpha Fund LP
|
52,102
|
7,465
|
50,394
|
7,221
|
|||||||||||||
GSO Credit Alpha Fund II LP
|
25,500
|
15,701
|
5,907
|
3,626
|
|||||||||||||
Blackstone / GSO Secured Lending Fund
|
64,500
|
31,650
|
—
|
—
|
|||||||||||||
Other (b)
|
164,378
|
49,883
|
21,515
|
3,913
|
|||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Treasury (c)
|
748,854
|
512,352
|
—
|
—
|
|||||||||||||
|
$ |
8,408,977
|
$ |
3,810,449
|
$ |
2,132,643
|
$ |
950,743
|
|||||||||
(a) | For some of the general partner commitments shown in the table above we require our senior managing directors and certain other professionals to fund a portion of the commitment even though the ultimate obligation to fund the aggregate commitment is ours pursuant to the governing agreements of the respective funds. The amounts of the aggregate applicable general partner original and remaining commitment are shown in the table above. In addition, certain senior managing directors and other professionals may be required to fund a de minimis amount of the commitment in certain carry funds. We expect our commitments to be drawn down over time and to be funded by available cash and cash generated from operations and realizations. Taking into account prevailing market conditions and both the liquidity and cash or liquid investment balances, we believe that the sources of liquidity described above will be more than sufficient to fund our working capital requirements. |
(b) | Represents capital commitments to a number of other funds in each respective segment. |
(c) |
Represents loan origination commitments, which are typically funded within
60-90
days of making a commitment, and capital market commitments.
|
Senior Notes (a)
|
Aggregate
Principal Amount (Dollars/Euros in Thousands) |
|
|||
4.750%, Due 2/15/2023
|
$ |
400,000
|
|||
2.000%, Due 5/19/2025
|
€
|
300,000
|
|||
1.000%, Due 10/5/2026
|
€
|
600,000
|
|||
3.150%, Due 10/2/2027
|
$ |
300,000
|
|||
1.500%, Due 4/10/2029
|
€
|
600,000
|
|||
2.500%, Due 1/10/2030
|
$ |
500,000
|
|||
6.250%, Due 8/15/2042
|
$ |
250,000
|
|||
5.000%, Due 6/15/2044
|
$ |
500,000
|
|||
4.450%, Due 7/15/2045
|
$ |
350,000
|
|||
4.000%, Due 10/2/2047
|
$ |
300,000
|
|||
3.500%, Due 9/10/2049
|
$ |
400,000
|
(a) | The Notes are unsecured and unsubordinated obligations of the Issuer and are fully and unconditionally guaranteed, jointly and severally, by The Blackstone Group Inc. and each of the Blackstone Holdings Partnerships. The Notes contain customary covenants and financial restrictions that, among other things, limit the Issuer and the guarantors’ ability, subject to certain exceptions, to incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The Notes also contain customary events of default. All or a portion of the Notes may be redeemed at our option, in whole or in part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the Notes. If a change of control repurchase event occurs, the Notes are subject to repurchase at the repurchase price as set forth in the Notes. |
|
Repurchase
Agreements |
|
Securities
Sold, Not Yet Purchased |
|
|||||
|
(Dollars in Millions)
|
||||||||
Balance, December 31, 2019
|
$ |
154.1
|
$ |
75.5
|
|||||
Balance, December 31, 2018
|
$ |
222.2
|
$ |
142.6
|
|||||
Year Ended December 31, 2019
|
|
|
|||||||
Average Daily Balance
|
$ |
191.4
|
$ |
112.8
|
|||||
Maximum Daily Balance
|
$ |
224.6
|
$ |
142.9
|
• | Determining whether our management fees, Incentive Fees or Performance Allocations represent variable interests — We make judgments as to whether the fees we earn are commensurate with the level of effort required for those fees and at market rates. In making this judgment, we consider, among other things, the extent of third party investment in the entity and the terms of any other interests we hold in the VIE. |
• |
Determining whether
kick-out
rights are substantive — We make judgments as to whether the third party investors in a partnership entity have the ability to remove the general partner, the investment manager or its equivalent, or to dissolve (liquidate) the partnership entity, through a simple majority vote. This includes an evaluation of whether barriers to exercise these rights exist.
|
• | Concluding whether Blackstone has an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE — As there is no explicit threshold in GAAP to define “potentially significant,” management must apply judgment and evaluate both quantitative and qualitative factors to conclude whether this threshold is met. |
• | 0.25% to 1.75% of committed capital or invested capital during the investment period, |
• | 0.25% to 1.50% of invested capital, committed capital and investment fair value subsequent to the investment period for private equity and real estate funds, and |
• |
0.75% to 1.50% of invested capital or net asset value subsequent to the investment period for certain of our hedge fund solutions and
credit-focused
funds.
|
• | 0.30% to 1.50% of net asset value. |
• | 0.25% to 1.50% of net asset value or total assets. |
• | 0.50% to 2.00% of invested capital, net operating income or net asset value. |
• | 0.25% to 1.50% of net asset value. |
• | 0.40% to 0.65% of the aggregate par amount of collateral assets, including principal cash. |
• | 0.35% to 1.50% of total assets or net asset value. |
• | Note 9. “Variable Interest Entities”, and |
• | Note 19. “Commitments and Contingencies — Commitments — Investment Commitments” and “— Contingencies — Guarantees”. |
Contractual Obligations
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
Thereafter
|
|
Total
|
|
|||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||
Operating Lease Obligations (a)
|
$ |
90,569
|
$ |
208,113
|
$ |
182,780
|
$ |
259,311
|
$ |
740,773
|
|||||||||||
Purchase Obligations
|
39,958
|
24,388
|
24
|
—
|
64,370
|
||||||||||||||||
Blackstone Issued Notes and Revolving Credit
Facility (b) |
—
|
—
|
400,000
|
4,281,950
|
4,681,950
|
||||||||||||||||
Interest on Blackstone Issued Notes and Revolving Credit Facility (c)
|
146,697
|
293,395
|
264,895
|
1,889,567
|
2,594,554
|
||||||||||||||||
Blackstone Funds and CLO Vehicles Debt Obligations Payable (d)
|
113
|
—
|
—
|
6,859,535
|
6,859,648
|
||||||||||||||||
Interest on Blackstone Funds and CLO Vehicles Debt Obligations Payable (e)
|
231,786
|
463,571
|
463,571
|
1,237,518
|
2,396,446
|
||||||||||||||||
Blackstone Funds Capital Commitments to Investee Funds (f)
|
79,950
|
—
|
—
|
—
|
79,950
|
||||||||||||||||
Due to Certain
Non-Controlling
Interest Holders in Connection with Tax Receivable Agreements (g)
|
70,987
|
78,323
|
64,233
|
467,967
|
681,510
|
||||||||||||||||
Unrecognized Tax Benefits, Including Interest and Penalties (h)
|
912
|
—
|
—
|
—
|
912
|
||||||||||||||||
Blackstone Operating Entities Capital Commitments to Blackstone Funds and Other (i)
|
3,810,449
|
—
|
—
|
—
|
3,810,449
|
||||||||||||||||
Consolidated Contractual Obligations
|
4,471,421
|
1,067,790
|
1,375,503
|
14,995,848
|
21,910,562
|
||||||||||||||||
Blackstone Funds and CLO Vehicles Debt Obligations Payable (d)
|
(113
|
) |
—
|
—
|
(6,859,535
|
) |
(6,859,648
|
) | |||||||||||||
Interest on Blackstone Funds and CLO Vehicles Debt Obligations Payable (e)
|
(231,786
|
) |
(463,571
|
) |
(463,571
|
) |
(1,237,518
|
) |
(2,396,446
|
) | |||||||||||
Blackstone Funds Capital Commitments to Investee Funds (f)
|
(79,950
|
) |
—
|
—
|
—
|
(79,950
|
) | ||||||||||||||
Blackstone Operating Entities Contractual Obligations
|
$ |
4,159,572
|
$ |
604,219
|
$ |
911,932
|
$ |
6,898,795
|
$ |
12,574,518
|
|||||||||||
(a) | We lease our primary office space and certain office equipment under agreements that expire through 2030. Occupancy lease agreements, in addition to contractual rent payments, generally include additional payments for certain costs incurred by the landlord, such as building expenses and utilities. To the extent these are fixed or determinable they are included in the table above. The table above includes operating leases that are recognized as Operating Lease Liabilities, short-term leases that are not recorded as Operating Lease Liabilities and leases that have been signed but not yet commenced which are not recorded as Operating Lease Liabilities. The amounts in this table are presented net of contractual sublease commitments. |
(b) | Represents the principal amount due on the senior notes we issued. As of December 31, 2019, we had no outstanding borrowings under our revolver. |
(c) |
Represents interest to be paid over the maturity of our senior notes and borrowings under our revolving credit facility which has been calculated assuming no
pre-payments
are made and debt is held until its final maturity date. These amounts exclude commitment fees for unutilized borrowings under our revolver.
|
(d) | These obligations are those of the Blackstone Funds including the consolidated CLO vehicles. |
(e) |
Represents interest to be paid over the maturity of the related consolidated Blackstone Funds’ and CLO vehicles’ debt obligations which has been calculated assuming no
pre-payments
will be made and debt will be held until its final maturity date. The future interest payments are calculated using variable rates in effect as of December 31, 2019, at spreads to market rates pursuant to the financing agreements, and range from 2.6% to 8.4%. The majority of the borrowings are due on demand and for purposes of this schedule are assumed to mature within one year. Interest on the majority of these borrowings rolls over into the principal balance at each reset date.
|
(f) | These obligations represent commitments of the consolidated Blackstone Funds to make capital contributions to investee funds and portfolio companies. These amounts are generally due on demand and are therefore presented in the less than one year category. |
(g) |
Represents obligations by Blackstone’s corporate subsidiary to make payments under the Tax Receivable Agreements to certain
non-controlling
interest holders for the tax savings realized from the taxable purchases of their interests in connection with the reorganization at the time of Blackstone’s IPO in 2007 and subsequent purchases. The obligation represents the amount of the payments currently expected to be made, which are dependent on the tax savings actually realized as determined annually without discounting for the timing of the payments. As required by GAAP, the amount of the obligation included in the Consolidated Financial Statements and shown in Note 18. “Related Party Transactions” (see “— Item 8. Financial Statements and Supplementary Data”) differs to reflect the net present value of the payments due to certain
non-controlling
interest holders.
|
(h) | The total represents gross unrecognized tax benefits of $0.5 million and interest and penalties of $0.5 million. In addition, Blackstone is not able to make a reasonably reliable estimate of the timing of payments in individual years in connection with gross unrecognized benefits of $24.5 million and interest of $2.2 million; therefore, such amounts are not included in the above contractual obligations table. |
(i) | These obligations represent commitments by us to provide general partner capital funding to the Blackstone Funds, limited partner capital funding to other funds and Blackstone principal investment commitments. These amounts are generally due on demand and are therefore presented in the less than one year category; however, a substantial amount of the capital commitments are expected to be called over the next three years. We expect to continue to make these general partner capital commitments as we raise additional amounts for our investment funds over time. |
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Year Ended December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
Fund Management Fees Based on the NAV of the Applicable Funds or Separately Managed Accounts
|
35
|
% |
38
|
% |
|
December 31,
|
||||||||||||||||||||||||
|
2019
|
2018
|
|||||||||||||||||||||||
|
Management
Fees (a) |
|
Performance
Revenues, Net of Related Compensation Expense (b) |
|
Investment
Income (b) |
|
Management
Fees (a) |
|
Performance
Revenues, Net of Related Compensation Expense (b) |
|
Investment
Income (b) |
|
|||||||||||||
|
(Dollars in Thousands)
|
||||||||||||||||||||||||
10% Decline in Fair Value of the Investments
|
$ |
129,020
|
$ |
1,659,753
|
$ |
177,934
|
$ |
104,582
|
$ |
1,475,206
|
$ |
199,072
|
(a) | Represents the annualized effect of the 10% decline. |
(b) | Represents the reporting date effect of the 10% decline. |
|
December 31, 2019
|
|||||||
|
Total Assets Under Management,
Excluding Undrawn Capital Commitments and the Amount of Capital Raised for CLOs |
|
Percentage Amount
Classified as Level III Investments |
|
||||
|
(Dollars in Thousands)
|
|
|
|
||||
Real Estate
|
$ 115,766,929
|
87%
|
||||||
Private Equity
|
$ 87,325,460
|
67%
|
||||||
Hedge Fund Solutions
|
$ 78,205,986
|
10%
|
||||||
Credit
|
$ 79,522,359
|
28%
|
|
December 31,
|
|||||||||||||||||||||||
|
2019
|
2018
|
||||||||||||||||||||||
|
Management
Fees (a) |
|
Performance
Revenues, Net of Related Compensation Expense (b) |
|
Investment
Income (b) |
|
Management
Fees (a) |
|
Performance
Revenues, Net of Related Compensation Expense (b) |
|
Investment
Income (b) |
|
||||||||||||
|
(Dollars in Thousands)
|
|||||||||||||||||||||||
10% Decline in the Rate of Exchange of All Foreign Currencies Against the U.S. Dollar
|
$ |
22,883
|
$ |
555,767
|
$ |
43,802
|
$ |
18,289
|
$ |
339,152
|
$ |
32,810
|
(a) | Represents the annualized effect of the 10% decline. |
(b) | Represents the reporting date effect of the 10% decline. |
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in Thousands)
|
||||||||
Annualized Increase in Interest Expense Due to a One Percentage Point Increase in Interest Rates (a)
|
$ |
—
|
$ |
—
|
(a) | As of December 31, 2019 and 2018 Blackstone had no such debt obligations payable outstanding. |
|
December 31,
|
||||||||||||||||
|
2019
|
2018
|
|||||||||||||||
|
Annualized
Decrease in Investment Income |
|
Annualized
Increase in Interest Income from Floating Rate Assets |
|
Annualized
Decrease in Investment Income |
|
Annualized
Increase in Interest Income from Floating Rate Assets |
|
|||||||||
|
(Dollars in Thousands)
|
||||||||||||||||
One Percentage Point Increase in Interest Rates
|
$ |
6,855
|
(a) | $ |
28,404
|
$ |
6,641
|
(a) | $ |
24,602
|
(a) | As of December 31, 2019 and 2018, this represents 0.2% and 0.1% of our portfolio of liquid assets, respectively. |
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in Thousands)
|
||||||||
Annualized Increase in Other Revenue Due to a One Percentage Point Increase in Interest Rates
|
$ |
13,957
|
$ |
14,210
|
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
|
(Dollars in Thousands)
|
||||||||
Decrease in Annualized Investment Income Due to a One Percentage Point Increase in Credit
Spreads (a) |
$ |
42,135
|
$ |
52,051
|
(a) | As of December 31, 2019 and 2018, this represents 1.2% and 1.1% of our portfolio of liquid assets, respectively. |
Item 8.
|
Financial Statements and Supplementary Data
|
136
|
||||
140
|
||||
142
|
||||
143
|
||||
144
|
||||
147
|
||||
149
|
• | We tested the design, implementation, and operating effectiveness of controls, including those related to management’s review of the techniques and assumptions used in the determination of fair value. |
• | We tested management’s assumptions through independent analysis and comparison to external sources. |
• | We evaluated management’s ability to accurately estimate fair value by comparing management’s historical fair value estimates to observable market transactions. |
• | We evaluated the impact of current market events and conditions, including relevant comparable transactions, on the valuation techniques and assumptions used by management (i.e., commodity prices, interest rate environment, and overall sector performance). |
• | We inspected industry reports for each industry in the portfolio for negative evidence of performance or expected performance changes (i.e., changing product demand/obsolescence or commodity prices declines) in determining if the current valuations captured significant economic or industry events. |
• | We utilized our internal fair value specialists to assist in the evaluation of management’s valuation methodologies and assumptions (or “inputs”). With the assistance of our internal fair value specialists, we evaluated certain of these inputs (e.g., guideline public companies, guideline transactions, valuation multiples, discount rates, yields, cap rates, exit multiples, and long-term growth rates). Our fair value specialist procedures included testing the underlying source information of the assumptions, as well as developing a range of independent estimates and comparing those to the inputs used by management. |
• | We tested the design, implementation, and operating effectiveness of management’s review of the accounting impacts of the Conversion. |
• |
We assessed the appropriateness of the methodology employed by management in calculating and allocating the
step-up,
based upon the relevant tax rules and regulations.
|
• |
We tested the formulaic accuracy of the mathematical model used by management and its third-party specialist to compute the
step-up,
in order to evaluate whether the calculation and allocation was made in accordance with management’s chosen methodology.
|
• | We tested key inputs to the mathematical model used by management, which included, among others, the fair values and tax bases of certain assets of the company. |
• | We tested the transactional steps undertaken by the company to legally effectuate the Conversion, in order to evaluate that the recorded income tax accounting consequences were supported by appropriately implemented legal transactions. |
• | We evaluated the financial statement disclosures related to the Conversion for completeness and accuracy. |
|
December 31,
2019
|
|
December 31,
2018
|
|
|||||
Assets
|
|
|
|
|
|
|
|||
Cash and Cash Equivalents
|
$ |
2,172,441
|
$ |
2,207,841
|
|||||
Cash Held by Blackstone Funds and Other
|
351,210
|
337,320
|
|||||||
Investments (including assets pledged of $196,094 and $279,502 at December 31, 2019 and December 31, 2018, respectively)
|
22,281,682
|
20,377,031
|
|||||||
Accounts Receivable
|
975,075
|
636,238
|
|||||||
Due from Affiliates
|
2,594,873
|
1,994,123
|
|||||||
Intangible Assets, Net
|
397,508
|
468,507
|
|||||||
Goodwill
|
1,869,860
|
1,869,860
|
|||||||
Other Assets
|
382,493
|
294,248
|
|||||||
Right-of-Use
Assets
|
471,059
|
—
|
|||||||
Deferred Tax Assets
|
1,089,305
|
739,482
|
|||||||
Total Assets
|
$ |
32,585,506
|
$ |
28,924,650
|
|||||
Liabilities and Equity
|
|
|
|
|
|
|
|||
Loans Payable
|
$ |
11,080,723
|
$ |
9,951,862
|
|||||
Due to Affiliates
|
1,026,871
|
1,035,776
|
|||||||
Accrued Compensation and Benefits
|
3,796,044
|
2,942,128
|
|||||||
Securities Sold, Not Yet Purchased
|
75,545
|
142,617
|
|||||||
Repurchase Agreements
|
154,118
|
222,202
|
|||||||
Operating Lease Liabilities
|
542,994
|
—
|
|||||||
Accounts Payable, Accrued Expenses and Other Liabilities
|
806,159
|
875,979
|
|||||||
Total Liabilities
|
17,482,454
|
15,170,564
|
|||||||
Commitments and Contingencies
|
|
|
|
|
|
|
|||
Redeemable
Non-Controlling
Interests in Consolidated Entities
|
87,651
|
141,779
|
|||||||
Equity
|
|
|
|
|
|
|
|||
Stockholders’ Equity of The Blackstone Group Inc.
|
|
|
|||||||
The Blackstone Group L.P. Partners’ Capital (663,212,830 common units issued and outstanding as of December 31, 2018)
|
—
|
6,415,700
|
|||||||
Class A Common Stock, $0.00001 par value, 90 billion shares authorized, (671,157,692 shares issued and outstanding as of December 31, 2019)
|
7
|
—
|
|||||||
Class B Common Stock, $0.00001 par value, 999,999,000 shares authorized, (1 share issued and outstanding as of December 31, 2019)
|
—
|
—
|
|||||||
Class C Common Stock, $0.00001 par value, 1,000 shares authorized, (1 share issued and outstanding as of December 31, 2019)
|
—
|
—
|
|||||||
Additional
Paid-in-Capital
|
6,428,647
|
—
|
|||||||
Retained Earnings
|
609,625
|
—
|
|||||||
Accumulated Other Comprehensive Loss
|
(28,495
|
) |
(36,476
|
) | |||||
Total Stockholders’ Equity of The Blackstone Group Inc.
|
7,009,784
|
6,379,224
|
|||||||
Non-Controlling
Interests in Consolidated Entities
|
4,186,069
|
3,648,766
|
|||||||
Non-Controlling
Interests in Blackstone Holdings
|
3,819,548
|
3,584,317
|
|||||||
Total Equity
|
15,015,401
|
13,612,307
|
|||||||
Total Liabilities and Equity
|
$ |
32,585,506
|
$ |
28,924,650
|
|||||
|
December 31,
2019 |
|
December 31,
2018 |
|
||||
Assets
|
|
|
|
|
|
|
||
Cash Held by Blackstone Funds and Other
|
$ |
351,210
|
$ |
337,030
|
||||
Investments
|
8,371,899
|
8,363,669
|
||||||
Accounts Receivable
|
220,372
|
179,863
|
||||||
Due from Affiliates
|
7,856
|
6,303
|
||||||
Other Assets
|
1,204
|
3,880
|
||||||
Total Assets
|
$ |
8,952,541
|
$ |
8,890,745
|
||||
Liabilities
|
|
|
|
|
|
|
||
Loans Payable
|
$ |
6,479,867
|
$ |
6,480,711
|
||||
Due to Affiliates
|
142,546
|
129,370
|
||||||
Securities Sold, Not Yet Purchased
|
55,289
|
92,603
|
||||||
Repurchase Agreements
|
154,118
|
222,202
|
||||||
Accounts Payable, Accrued Expenses and Other Liabilities
|
301,355
|
252,176
|
||||||
Total Liabilities
|
$ |
7,133,175
|
$ |
7,177,062
|
||||
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|
|
||||
Management and Advisory Fees, Net
|
$ |
3,472,155
|
$ |
3,027,796
|
$ |
2,751,322
|
|||||||
Incentive Fees
|
129,911
|
57,540
|
242,514
|
||||||||||
Investment Income (Loss)
|
|
|
|
||||||||||
Performance Allocations
|
|
|
|
||||||||||
Realized
|
1,739,000
|
1,876,507
|
3,571,811
|
||||||||||
Unrealized
|
1,126,332
|
561,373
|
(105,473
|
) | |||||||||
Principal Investments
|
|
|
|
||||||||||
Realized
|
393,478
|
415,862
|
635,769
|
||||||||||
Unrealized
|
215,003
|
49,917
|
42,605
|
||||||||||
Total Investment Income
|
3,473,813
|
2,903,659
|
4,144,712
|
||||||||||
Interest and Dividend Revenue
|
182,398
|
171,947
|
139,696
|
||||||||||
Other
|
79,993
|
672,317
|
(133,229
|
) | |||||||||
Total Revenues
|
7,338,270
|
6,833,259
|
7,145,015
|
||||||||||
Expenses
|
|
|
|
|
|
|
|
|
|
||||
Compensation and Benefits
|
|
|
|
||||||||||
Compensation
|
1,820,330
|
1,609,957
|
1,442,485
|
||||||||||
Incentive Fee Compensation
|
44,300
|
33,916
|
105,279
|
||||||||||
Performance Allocations Compensation
|
|
|
|
||||||||||
Realized
|
662,942
|
711,076
|
1,281,965
|
||||||||||
Unrealized
|
540,285
|
319,742
|
103,794
|
||||||||||
Total Compensation and Benefits
|
3,067,857
|
2,674,691
|
2,933,523
|
||||||||||
General, Administrative and Other
|
679,408
|
594,873
|
488,582
|
||||||||||
Interest Expense
|
199,648
|
163,990
|
197,486
|
||||||||||
Fund Expenses
|
17,738
|
78,486
|
132,787
|
||||||||||
Total Expenses
|
3,964,651
|
3,512,040
|
3,752,378
|
||||||||||
Other Income
|
|
|
|
|
|
|
|
|
|
||||
Change in Tax Receivable Agreement Liability
|
161,567
|
—
|
403,855
|
||||||||||
Net Gains from Fund Investment Activities
|
282,829
|
191,722
|
321,597
|
||||||||||
Total Other Income
|
444,396
|
191,722
|
725,452
|
||||||||||
Income Before Provision (Benefit) for Taxes
|
3,818,015
|
3,512,941
|
4,118,089
|
||||||||||
Provision (Benefit) for Taxes
|
(47,952
|
) |
249,390
|
743,147
|
|||||||||
Net Income
|
3,865,967
|
3,263,551
|
3,374,942
|
||||||||||
Net Income (Loss) Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
|
(121
|
) |
(2,104
|
) |
13,806
|
||||||||
Net Income Attributable to
Non-Controlling
Interests in Consolidated Entities
|
476,779
|
358,878
|
497,439
|
||||||||||
Net Income Attributable to
Non-Controlling
Interests in Blackstone Holdings
|
1,339,627
|
1,364,989
|
1,392,323
|
||||||||||
Net Income Attributable to The Blackstone Group Inc.
|
$ |
2,049,682
|
$ |
1,541,788
|
$ |
1,471,374
|
|||||||
Net Income Per Share of Class A Common Stock
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$ |
3.03
|
$ |
2.27
|
$ |
2.21
|
|||||||
Diluted
|
$ |
3.03
|
$ |
2.26
|
$ |
2.21
|
|||||||
Weighted-Average Shares of Class A Common Stock Outstanding
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
675,900,466
|
678,850,245
|
665,453,198
|
||||||||||
Diluted
|
676,167,851
|
1,206,962,846
|
666,246,846
|
||||||||||
|
Year Ended December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||||
Net Income
|
$ |
3,865,967
|
$ |
3,263,551
|
$ |
3,374,942
|
||||||||
Other Comprehensive Income (Loss) – Currency Translation Adjustment
|
14,332
|
(33,506
|
) |
80,366
|
||||||||||
Comprehensive Income
|
3,880,299
|
3,230,045
|
3,455,308
|
|||||||||||
Less:
|
|
|
|
|||||||||||
Comprehensive Income (Loss) Attributable to Redeemable
Non-Controlling
Interests in Consolidated Entities
|
(121
|
) |
(2,104
|
) |
13,806
|
|||||||||
Comprehensive Income Attributable to
Non-Controlling
Interests in Consolidated Entities
|
476,779
|
356,488
|
548,936
|
|||||||||||
Comprehensive Income Attributable to
Non-Controlling
Interests in Blackstone Holdings
|
1,345,980
|
1,336,331
|
1,392,323
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Comprehensive Income Attributable to Non-Controlling Interests
|
|
|
1,822,638
|
|
|
|
1,690,715
|
|
|
|
1,955,065
|
|
||
Comprehensive Income Attributable to The Blackstone Group Inc.
|
$ |
2,057,661
|
$ |
1,539,330
|
$ |
1,500,243
|
||||||||
|
|
|
The Blackstone Group L.P.
|
|
|
|
|
|
|
Redeemable
Non-
Controlling Interests in Consolidated Entities |
|
||||||||||||||||||||||
|
Common
Units |
|
Partners’
Capital |
|
Accumulated
Other Compre- hensive (Loss) |
|
Total
|
|
Non-
Controlling Interests in Consolidated Entities |
|
Non-
Controlling Interests in Blackstone Holdings |
|
Total
Partners’ Capital |
|
|||||||||||||||||||
Balance at December 31, 2016
|
643,459,542
|
$ |
6,521,531
|
$ |
(62,887
|
) | $ |
6,458,644
|
$ |
2,428,964
|
$ |
3,434,483
|
$ |
12,322,091
|
$ |
185,390
|
|||||||||||||||||
Consolidation of Fund Entity
|
—
|
—
|
—
|
—
|
387,006
|
—
|
387,006
|
—
|
|||||||||||||||||||||||||
Net Income
|
—
|
1,471,374
|
—
|
1,471,374
|
497,439
|
1,392,323
|
3,361,136
|
13,806
|
|||||||||||||||||||||||||
Currency Translation Adjustment
|
—
|
—
|
28,869
|
28,869
|
51,497
|
—
|
80,366
|
—
|
|||||||||||||||||||||||||
Capital Contributions
|
—
|
—
|
—
|
—
|
730,793
|
—
|
730,793
|
58,920
|
|||||||||||||||||||||||||
Capital Distributions
|
—
|
(1,534,586
|
) |
—
|
(1,534,586
|
) |
(836,535
|
) |
(1,307,996
|
) |
(3,679,117
|
) |
(47,172
|
) | |||||||||||||||||||
Transfer of
Non-Controlling
Interests in Consolidated Entities
|
—
|
—
|
—
|
—
|
(6,016
|
) |
—
|
(6,016
|
) |
—
|
|||||||||||||||||||||||
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders
|
—
|
11,057
|
—
|
11,057
|
—
|
—
|
11,057
|
—
|
|||||||||||||||||||||||||
Equity-Based Compensation
|
—
|
183,484
|
—
|
183,484
|
—
|
151,539
|
335,023
|
—
|
|||||||||||||||||||||||||
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units
|
7,084,888
|
(28,486
|
) |
—
|
(28,486
|
) |
—
|
(1,706
|
) |
(30,192
|
) |
—
|
|||||||||||||||||||||
Change in The Blackstone Group L.P.’s Ownership Interest
|
—
|
(15,197
|
) |
—
|
(15,197
|
) |
—
|
15,197
|
—
|
—
|
|||||||||||||||||||||||
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units
|
8,981,663
|
59,334
|
—
|
59,334
|
—
|
(59,334
|
) |
—
|
—
|
||||||||||||||||||||||||
Balance at December 31, 2017
|
659,526,093
|
$ |
6,668,511
|
$ |
(34,018
|
) | $ |
6,634,493
|
$ |
3,253,148
|
$ |
3,624,506
|
$ |
13,512,147
|
$ |
210,944
|
|
|
|
The Blackstone Group L.P.
|
|
|
|
|
|
|
Redeemable
Non-
Controlling Interests in Consolidated Entities |
|
||||||||||||||||||||||
|
Common
Units |
|
Partners’
Capital |
|
Accumulated
Other Compre- hensive (Loss) |
|
Total
|
|
Non-
Controlling Interests in Consolidated Entities |
|
Non-
Controlling Interests in Blackstone Holdings |
|
Total
Partners’ Capital |
|
|||||||||||||||||||
Balance at December 31, 2017
|
659,526,093
|
$ |
6,668,511
|
$ |
(34,018
|
) | $ |
6,634,493
|
$ |
3,253,148
|
$ |
3,624,506
|
$ |
13,512,147
|
$ |
210,944
|
|||||||||||||||||
Transfer Out Due to Deconsolidation of Fund Entities
|
—
|
—
|
—
|
—
|
(197,091
|
) |
—
|
(197,091
|
) |
—
|
|||||||||||||||||||||||
Net Income (Loss)
|
—
|
1,541,788
|
—
|
1,541,788
|
358,878
|
1,364,989
|
3,265,655
|
(2,104
|
) | ||||||||||||||||||||||||
Currency Translation Adjustment
|
—
|
—
|
(2,458
|
) |
(2,458
|
) |
(2,389
|
) |
(28,659
|
) |
(33,506
|
) |
—
|
||||||||||||||||||||
Capital Contributions
|
—
|
—
|
—
|
—
|
903,655
|
—
|
903,655
|
12,980
|
|||||||||||||||||||||||||
Capital Distributions
|
—
|
(1,635,921
|
) |
—
|
(1,635,921
|
) |
(687,623
|
) |
(1,410,483
|
) |
(3,734,027
|
) |
(78,688
|
) | |||||||||||||||||||
Transfer or Repurchase of
Non-Controlling
Interests in Consolidated Entities
|
—
|
(7,642
|
) |
—
|
(7,642
|
) |
20,188
|
(6,005
|
) |
6,541
|
(1,353
|
) | |||||||||||||||||||||
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders
|
—
|
13,907
|
—
|
13,907
|
—
|
—
|
13,907
|
—
|
|||||||||||||||||||||||||
Equity-Based Compensation
|
—
|
204,590
|
—
|
204,590
|
—
|
161,824
|
366,414
|
—
|
|||||||||||||||||||||||||
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Units
|
4,114,395
|
(20,198
|
) |
—
|
(20,198
|
) |
—
|
(5,462
|
) |
(25,660
|
) |
—
|
|||||||||||||||||||||
Repurchase of Blackstone Common Units
|
(16,000,000
|
) |
(541,501
|
) |
—
|
(541,501
|
) |
—
|
—
|
(541,501
|
) |
—
|
|||||||||||||||||||||
Change in The Blackstone Group L.P.’s Ownership Interest
|
—
|
66,799
|
—
|
66,799
|
—
|
(66,799
|
) |
—
|
—
|
||||||||||||||||||||||||
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Units
|
14,821,603
|
100,397
|
—
|
100,397
|
—
|
(100,397
|
) |
—
|
—
|
||||||||||||||||||||||||
Issuance of Blackstone Common Units and Blackstone Holdings Partnership Units
|
750,739
|
24,970
|
—
|
24,970
|
—
|
50,803
|
75,773
|
—
|
|||||||||||||||||||||||||
Balance at December 31, 2018
|
663,212,830
|
$ |
6,415,700
|
$ |
(36,476
|
) | $ |
6,379,224
|
$ |
3,648,766
|
$ |
3,584,317
|
$ |
13,612,307
|
$ |
141,779
|
|
Shares of The Blackstone
Group Inc. (a)
|
The Blackstone Group Inc. (a)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
Redeemable
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
Non-
|
|
Non-
|
|
|
|
Non-
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Compre-
|
|
|
|
Controlling
|
|
Controlling
|
|
|
|
Controlling
|
|||||||||||||||||||||||||
|
|
|
|
|
Class A
|
|
|
|
|
Class A
|
|
Additional
|
|
|
|
|
hensive
|
|
|
|
|
Interests in
|
|
Interests in
|
|
|
|
|
Interests in
|
|||||||||||||||||||
|
Common
|
|
Common
|
|
Partners’
|
|
Common
|
|
Paid-in-
|
|
Retained
|
|
Income
|
|
|
|
Consolidated
|
|
Blackstone
|
|
Total
|
|
Consolidated
|
|||||||||||||||||||||||||
|
Units
|
|
Stock
|
|
Capital
|
|
Stock
|
|
Capital
|
|
Earnings
|
|
(Loss)
|
|
Total
|
|
Entities
|
|
Holdings
|
|
Equity
|
|
Entities
|
|||||||||||||||||||||||||
Balance at December 31, 2018
|
|
|
663,212,830
|
|
|
|
—
|
|
|
$
|
6,415,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(36,476
|
)
|
|
$
|
6,379,224
|
|
|
$
|
3,648,766
|
|
|
$
|
3,584,317
|
|
|
$
|
13,612,307
|
|
|
$
|
141,779
|
|
Net Income (Loss)
|
|
|
—
|
|
|
|
—
|
|
|
|
787,096
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,262,586
|
|
|
|
—
|
|
|
|
2,049,682
|
|
|
|
476,779
|
|
|
|
1,339,627
|
|
|
|
3,866,088
|
|
|
|
(121
|
)
|
Currency Translation Adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,981
|
|
|
|
7,981
|
|
|
|
—
|
|
|
|
6,353
|
|
|
|
14,334
|
|
|
|
—
|
|
Capital Contributions
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
775,873
|
|
|
|
—
|
|
|
|
775,873
|
|
|
|
—
|
|
Capital Distributions
|
|
|
—
|
|
|
|
—
|
|
|
|
(639,210
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(652,961
|
)
|
|
|
—
|
|
|
|
(1,292,171
|
)
|
|
|
(712,234
|
)
|
|
|
(1,104,573
|
)
|
|
|
(3,108,978
|
)
|
|
|
(54,007
|
)
|
Transfer of Non-Controlling Interests in Consolidated Entities
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,115
|
)
|
|
|
—
|
|
|
|
(3,115
|
)
|
|
|
—
|
|
Deferred Tax Effects Resulting from Acquisition of Ownership Interests from Non-Controlling Interest Holders
|
|
|
—
|
|
|
|
—
|
|
|
|
5,016
|
|
|
|
—
|
|
|
|
23,706
|
|
|
|
—
|
|
|
|
—
|
|
|
|
28,722
|
|
|
|
—
|
|
|
|
—
|
|
|
|
28,722
|
|
|
|
—
|
|
Equity-Based Compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
101,200
|
|
|
|
—
|
|
|
|
131,501
|
|
|
|
—
|
|
|
|
—
|
|
|
|
232,701
|
|
|
|
—
|
|
|
|
182,809
|
|
|
|
415,510
|
|
|
|
—
|
|
Net Delivery of Vested Blackstone Holdings Partnership Units and Blackstone Common Shares
|
|
|
1,853,730
|
|
|
|
970,995
|
|
|
|
(10,613
|
)
|
|
|
—
|
|
|
|
(12,821
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(23,434
|
)
|
|
|
—
|
|
|
|
(6
|
)
|
|
|
(23,440
|
)
|
|
|
—
|
|
Repurchase of Common Shares and Blackstone Holdings Partnership Units
|
|
|
(8,100,000
|
)
|
|
|
(4,650,000
|
)
|
|
|
(325,214
|
)
|
|
|
—
|
|
|
|
(236,686
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(561,900
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(561,900
|
)
|
|
|
—
|
|
Change in The Blackstone Group Inc.’s Ownership Interest
|
|
|
—
|
|
|
|
—
|
|
|
|
(23,270
|
)
|
|
|
—
|
|
|
|
83,614
|
|
|
|
—
|
|
|
|
—
|
|
|
|
60,344
|
|
|
|
—
|
|
|
|
(60,344
|
)
|
|
|
—
|
|
|
|
—
|
|
Conversion of Blackstone Holdings Partnership Units to Blackstone Common Shares
|
|
|
3,621,809
|
|
|
|
14,248,328
|
|
|
|
25,192
|
|
|
|
—
|
|
|
|
103,443
|
|
|
|
—
|
|
|
|
—
|
|
|
|
128,635
|
|
|
|
—
|
|
|
|
(128,635
|
)
|
|
|
—
|
|
|
—
|
|
|
Reclassification Resulting from Conversion to a Corporation
|
|
|
(660,588,369
|
)
|
|
|
660,588,369
|
|
|
|
(6,335,897
|
)
|
|
|
7
|
|
|
|
6,335,890
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Balance at December 31, 2019
|
|
|
—
|
|
|
|
671,157,692
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
6,428,647
|
|
|
$
|
609,625
|
|
|
$
|
(28,495
|
)
|
|
$
|
7,009,784
|
|
|
$
|
4,186,069
|
|
|
$
|
3,819,548
|
|
|
$
|
15,015,401
|
|
|
$
|
87,651
|
|
(a) | Following the conversion to a corporation, Blackstone also has one share outstanding of each of Class B and Class C common stock, with par value of each less than one cent. After initial issuance, there have been no changes to the amounts related to Class B and Class C common stock during the period presented. |
|
Year Ended December 31,
|
|||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|||||
Net Income
|
$ |
3,865,967
|
$ |
3,263,551
|
$ |
3,374,942
|
||||||||
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities
|
|
|
|
|||||||||||
Blackstone Funds Related
|
|
|
|
|
|
|
|
|
|
|||||
Net Realized Gains on Investments
|
(2,242,227
|
) |
(2,381,683
|
) |
(4,613,531
|
) | ||||||||
Changes in Unrealized (Gains) Losses on Investments
|
(324,448
|
) |
4,784
|
(21,589
|
) | |||||||||
Non-Cash
Performance Allocations
|
(1,126,332
|
) |
(561,373
|
) |
105,472
|
|||||||||
Non-Cash
Performance Allocations and Incentive Fee Compensation
|
1,234,455
|
1,053,690
|
1,491,040
|
|||||||||||
Equity-Based Compensation Expense
|
417,092
|
366,928
|
338,687
|
|||||||||||
Amortization of Intangibles
|
70,999
|
59,021
|
46,776
|
|||||||||||
Other
Non-Cash
Amounts Included in Net Income
|
(448,241
|
) |
45,286
|
363,903
|
||||||||||
Cash Flows Due to Changes in Operating Assets and Liabilities
|
|
|
|
|||||||||||
Cash Acquired with Consolidation of Fund Entity
|
—
|
31,422
|
13,822
|
|||||||||||
Cash Relinquished with Deconsolidation of Fund Entities
|
—
|
(899,959
|
) |
(33,566
|
) | |||||||||
Accounts Receivable
|
(237,751
|
) |
43,037
|
282,026
|
||||||||||
Reverse Repurchase Agreements
|
—
|
—
|
118,495
|
|||||||||||
Due from Affiliates
|
(451,302
|
) |
(280,674
|
) |
(298,501
|
) | ||||||||
Other Assets
|
(50,017
|
) |
(76,596
|
) |
17,377
|
|||||||||
Accrued Compensation and Benefits
|
(382,120
|
) |
(729,109
|
) |
(1,177,852
|
) | ||||||||
Securities Sold, Not Yet Purchased
|
(72,645
|
) |
(10,125
|
) |
(62,730
|
) | ||||||||
Accounts Payable, Accrued Expenses and Other Liabilities
|
(324,358
|
) |
(357,582
|
) |
(755,232
|
) | ||||||||
Repurchase Agreements
|
(68,084
|
) |
103,362
|
43,516
|
||||||||||
Due to Affiliates
|
(5,250
|
) |
74,108
|
(9,652
|
) | |||||||||
Investments Purchased
|
(8,537,874
|
) |
(13,881,869
|
) |
(19,573,153
|
) | ||||||||
Cash Proceeds from Sale of Investments
|
10,645,243
|
14,179,523
|
18,723,355
|
|||||||||||
Net Cash Provided by (Used in) Operating Activities
|
1,963,107
|
45,742
|
(1,626,395
|
) | ||||||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|||||
Purchase of Furniture, Equipment and Leasehold Improvements
|
(60,280
|
) |
(18,377
|
) |
(24,347
|
) | ||||||||
Net Cash Paid for Acquisitions, Net of Cash Acquired
|
—
|
(98,219
|
) |
(168,913
|
) | |||||||||
Net Cash Used in Investing Activities
|
(60,280
|
) |
(116,596
|
) |
(193,260
|
) | ||||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|||||
Distributions to Non-Controlling Interest
|
|
|
|
|
|
|
|
|
|
|||||
Holders in Consolidated Entities
|
(765,849
|
) |
(762,588
|
) |
(813,987
|
) | ||||||||
Contributions from Non-Controlling Interest
|
|
|
|
|
|
|
|
|
|
|||||
Holders in Consolidated Entities
|
764,863
|
836,922
|
759,907
|
|||||||||||
Payments Under Tax Receivable Agreement
|
(84,640
|
) |
—
|
(135,831
|
) | |||||||||
Net Settlement of Vested Class A Common stock and Repurchase of Class A Common Stock and Blackstone Holdings Partnership Units
|
(585,340
|
) |
(567,161
|
) |
(30,192
|
) |
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Financing Activities (Continued)
|
|
|
|
|
|
|
|
|
|
||||
Proceeds from Loans Payable
|
$ |
1,549,732
|
$ |
3,218,399
|
$ |
7,600,153
|
|||||||
Repayment and Repurchase of Loans Payable
|
(403,401
|
) |
(1,009,354
|
) |
(1,766,129
|
) | |||||||
Dividends/Distributions to Shareholders and Unitholders
|
(2,396,744
|
) |
(3,046,404
|
) |
(2,842,582
|
) | |||||||
Net Cash Provided by (Used in) Financing Activities
|
(1,921,379
|
) |
(1,330,186
|
) |
2,771,339
|
||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
|
|
(2,958
|
)
|
|
|
9,712
|
|
|
|
123,850
|
|
||
Cash and Cash Equivalents and Cash Held by Blackstone Funds and Other
|
|
|
|
|
|
|
|
|
|
||||
Net Increase (Decrease)
|
(21,510
|
) |
(1,391,328
|
) |
1,075,534
|
||||||||
Beginning of Period
|
2,545,161
|
3,936,489
|
2,860,955
|
||||||||||
End of Period
|
$ |
2,523,651
|
$ |
2,545,161
|
$ |
3,936,489
|
|||||||
Supplemental Disclosure of Cash Flows Information
|
|
|
|
|
|
|
|
|
|
||||
Payments for Interest
|
$ |
167,458
|
$ |
169,872
|
$ |
160,178
|
|||||||
Payments for Income Taxes
|
$ |
159,302
|
$ |
192,790
|
$ |
106,032
|
|||||||
Supplemental Disclosure of
Non-Cash
Investing and Financing Activities
|
|
|
|
|
|
|
|
|
|
||||
Non-Cash
Contributions from
Non-Controlling
Interest Holders
|
$ |
10,078
|
$ |
10,435
|
$ |
1,112
|
|||||||
Non-Cash
Distributions to
Non-Controlling
Interest Holders
|
$ |
(392
|
) | $ |
(18,723
|
) | $ |
(69,721
|
) | ||||
Non-Cash
Consideration for Acquisition
|
$ |
—
|
$ |
(50,803
|
) | $ |
(95,262
|
) | |||||
Net Assets Related to the Consolidation of Certain Fund Entities
|
$ |
—
|
$ |
—
|
$ |
387,006
|
|||||||
Notes Issuance Costs
|
$ |
11,143
|
$ |
—
|
$ |
5,582
|
|||||||
Transfer of Interests to
Non-Controlling
Interest Holders
|
$ |
(3,115
|
) | $ |
20,188
|
$ |
(6,016
|
) | |||||
Change in The Blackstone Group Inc.’s Ownership Interest
|
$ |
60,344
|
$ |
66,799
|
$ |
(15,197
|
) | ||||||
Net Settlement of Vested Common Units
|
$ |
102,028
|
$ |
136,238
|
$ |
127,392
|
|||||||
Conversion of Blackstone Holdings Units to Common Units
|
$ |
128,635
|
$ |
100,397
|
$ |
59,334
|
|||||||
Acquisition of Ownership Interests from
Non-Controlling
Interest Holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Asset
|
$ |
(149,513
|
) | $ |
(93,391
|
) | $ |
(74,487
|
) | ||||
Due to Affiliates
|
$ |
120,791
|
$ |
79,484
|
$ |
63,430
|
|||||||
Equity
|
$ |
28,722
|
$ |
13,907
|
$ |
11,057
|
|||||||
Issuance of New Shares/Units
|
$ |
—
|
$ |
24,970
|
$ |
—
|
|||||||
|
December 31,
2019 |
|
December 31,
2018 |
|
|||||
Cash and Cash Equivalents
|
$ |
2,172,441
|
$ |
2,207,841
|
|||||
Cash Held by Blackstone Funds and Other
|
351,210
|
337,320
|
|||||||
|
$ |
2,523,651
|
$ |
2,545,161
|
|||||
• | Level I — Quoted prices are available in active markets for identical financial instruments as of the reporting date. The types of financial instruments in Level I include listed equities, listed derivatives and mutual funds with quoted prices. Blackstone does not adjust the quoted price for these investments, even in situations where Blackstone holds a large position and a sale could reasonably impact the quoted price. |
• |
Level II — Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. Financial instruments which are generally included in this category include corporate bonds and loans, including corporate bonds and loans held within CLO vehicles, government and agency securities, less liquid and restricted equity securities, and certain
over-the-counter
derivatives where the fair value is based on observable inputs. Senior and subordinated notes issued by CLO vehicles are classified within Level II of the fair value hierarchy.
|
• |
Level III — Pricing inputs are unobservable for the financial instruments and includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value require significant management judgment or estimation. Financial instruments that are included in this category generally include general and limited partnership interests in private equity and real estate funds, credit-focused funds, distressed debt and
non-investment
grade residual interests in securitizations, certain corporate bonds and loans held within CLO vehicles, and certain
over-the-counter
derivatives where the fair value is based on unobservable inputs.
|
• | Debt Instruments and Equity Securities are valued on the basis of prices from an orderly transaction between market participants provided by reputable dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrices and market transactions in comparable investments and various relationships between investments. The valuation of certain equity securities is based on an observable price for an identical security adjusted for the effect of a restriction. |
• | Freestanding Derivatives are valued using contractual cash flows and observable inputs comprising yield curves, foreign currency rates and credit spreads. |
• | Senior and subordinate notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (a) the fair value of any beneficial interests held by Blackstone, and (b) the carrying value of any beneficial interests that represent compensation for services. |
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
Finite-Lived Intangible Assets/Contractual Rights
|
$ |
1,712,576
|
$ |
1,712,576
|
|||||
Accumulated Amortization
|
(1,315,068
|
) |
(1,244,069
|
) | |||||
Intangible Assets, Net
|
$ |
397,508
|
$ |
468,507
|
|||||
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Balance, Beginning of Year
|
$ |
468,507
|
$ |
409,828
|
$ |
262,604
|
|||||||
Amortization Expense
|
(70,999
|
) |
(59,021
|
) |
(46,776
|
) | |||||||
Acquisitions
|
—
|
117,700
|
194,000
|
||||||||||
Balance, End of Year
|
$ |
397,508
|
$ |
468,507
|
$ |
409,828
|
|||||||
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
Investments of Consolidated Blackstone Funds
|
$ |
8,380,698
|
$ |
8,376,338
|
|||||
Equity Method Investments
|
|
|
|||||||
Partnership Investments
|
4,035,675
|
3,649,423
|
|||||||
Accrued Performance Allocations
|
7,180,449
|
5,883,924
|
|||||||
Corporate Treasury Investments
|
2,419,587
|
2,206,493
|
|||||||
Other Investments
|
265,273
|
260,853
|
|||||||
|
$ |
22,281,682
|
$ |
20,377,031
|
|||||
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Realized Gains
|
$ |
15,983
|
$ |
74,784
|
$ |
165,106
|
|||||||
Net Change in Unrealized Losses
|
109,445
|
(54,697
|
) |
(21,016
|
) | ||||||||
Realized and Net Change in Unrealized Gains from Consolidated Blackstone Funds
|
125,428
|
20,087
|
144,090
|
||||||||||
Interest and Dividend Revenue Attributable to Consolidated Blackstone Funds
|
157,401
|
171,635
|
177,507
|
||||||||||
Other Income — Net Gains from Fund Investment Activities
|
$ |
282,829
|
$ |
191,722
|
$ |
321,597
|
|||||||
|
December 31, 2019 and the Year Then Ended
|
||||||||||||||||||||||||
|
Real
Estate
|
|
Private
Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Other (a)
|
|
Total
|
|
|||||||||||||
Statement of Financial Condition
|
|
|
|
|
|
|
|||||||||||||||||||
Assets
|
|
|
|
|
|
|
|||||||||||||||||||
Investments
|
$ |
119,951,496
|
$ |
99,906,080
|
$ |
26,516,304
|
$ |
25,923,446
|
$ |
849
|
$ |
272,298,175
|
|||||||||||||
Other Assets
|
5,318,743
|
2,907,054
|
2,609,755
|
1,680,187
|
119,739
|
12,635,478
|
|||||||||||||||||||
Total Assets
|
$ |
125,270,239
|
$ |
102,813,134
|
$ |
29,126,059
|
$ |
27,603,633
|
$ |
120,588
|
$ |
284,933,653
|
|||||||||||||
Liabilities and Equity
|
|
|
|
|
|
|
|||||||||||||||||||
Debt
|
$ |
24,750,242
|
$ |
12,399,899
|
$ |
378,950
|
$ |
6,687,654
|
$ |
—
|
$ |
44,216,745
|
|||||||||||||
Other Liabilities
|
6,575,483
|
1,124,857
|
2,402,920
|
1,535,636
|
24,717
|
11,663,613
|
|||||||||||||||||||
Total Liabilities
|
31,325,725
|
13,524,756
|
2,781,870
|
8,223,290
|
24,717
|
55,880,358
|
|||||||||||||||||||
Equity
|
93,944,514
|
89,288,378
|
26,344,189
|
19,380,343
|
95,871
|
229,053,295
|
|||||||||||||||||||
Total Liabilities and Equity
|
$ |
125,270,239
|
$ |
102,813,134
|
$ |
29,126,059
|
$ |
27,603,633
|
$ |
120,588
|
$ |
284,933,653
|
|||||||||||||
Statement of Operations
|
|
|
|
|
|
|
|||||||||||||||||||
Interest Income
|
$ |
535,274
|
$ |
897,990
|
$ |
16,708
|
$ |
1,252,747
|
$ |
—
|
$ |
2,702,719
|
|||||||||||||
Other Income
|
1,422,711
|
46,126
|
206,630
|
313,009
|
109,692
|
2,098,168
|
|||||||||||||||||||
Interest Expense
|
(736,840
|
) |
(416,603
|
) |
(87,898
|
) |
(250,261
|
) |
—
|
(1,491,602
|
) | ||||||||||||||
Other Expenses
|
(1,465,212
|
) |
(1,011,584
|
) |
(164,948
|
) |
(470,033
|
) |
(61,423
|
) |
(3,173,200
|
) | |||||||||||||
Net Realized and Unrealized Gain from Investments
|
9,671,224
|
9,233,285
|
1,700,722
|
(456,651
|
) |
—
|
20,148,580
|
||||||||||||||||||
Net Income
|
$ |
9,427,157
|
$ |
8,749,214
|
$ |
1,671,214
|
$ |
388,811
|
$ |
48,269
|
$ |
20,284,665
|
|||||||||||||
(a)
|
Other represents the summarized financial information of equity method investments whose results, for segment reporting purposes, have been allocated across more than one of Blackstone’s segments.
|
|
December 31, 2018 and the Year Then Ended
|
||||||||||||||||||||||||
|
Real
Estate
|
|
Private
Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Other (a)
|
|
Total
|
|
|||||||||||||
Statement of Financial Condition
|
|
|
|
|
|
|
|||||||||||||||||||
Assets
|
|
|
|
|
|
|
|||||||||||||||||||
Investments
|
$ |
89,742,226
|
$ |
79,718,783
|
$ |
26,336,573
|
$ |
24,634,380
|
$ |
353
|
$ |
220,432,315
|
|||||||||||||
Other Assets
|
3,542,235
|
2,257,152
|
3,119,639
|
1,706,579
|
125,007
|
10,750,612
|
|||||||||||||||||||
Total Assets
|
$ |
93,284,461
|
$ |
81,975,935
|
$ |
29,456,212
|
$ |
26,340,959
|
$ |
125,360
|
$ |
231,182,927
|
|||||||||||||
Liabilities and Partners’ Capital
|
|
|
|
|
|
|
|||||||||||||||||||
Debt
|
$ |
15,081,536
|
$ |
9,989,289
|
$ |
350,982
|
$ |
5,087,998
|
$ |
—
|
$ |
30,509,805
|
|||||||||||||
Other Liabilities
|
3,568,159
|
749,043
|
1,529,466
|
1,338,712
|
28,295
|
7,213,675
|
|||||||||||||||||||
Total Liabilities
|
18,649,695
|
10,738,332
|
1,880,448
|
6,426,710
|
28,295
|
37,723,480
|
|||||||||||||||||||
Partners’ Capital
|
74,634,766
|
71,237,603
|
27,575,764
|
19,914,249
|
97,065
|
193,459,447
|
|||||||||||||||||||
Total Liabilities and Partners’ Capital
|
$ |
93,284,461
|
$ |
81,975,935
|
$ |
29,456,212
|
$ |
26,340,959
|
$ |
125,360
|
$ |
231,182,927
|
|||||||||||||
Statement of Operations
|
|
|
|
|
|
|
|||||||||||||||||||
Interest Income
|
$ |
377,615
|
$ |
1,022,387
|
$ |
6,695
|
$ |
1,130,490
|
$ |
—
|
$ |
2,537,187
|
|||||||||||||
Other Income
|
1,244,754
|
92,696
|
166,842
|
417,883
|
106,525
|
2,028,700
|
|||||||||||||||||||
Interest Expense
|
(518,137
|
) |
(278,348
|
) |
(17,780
|
) |
(228,734
|
) |
—
|
(1,042,999
|
) | ||||||||||||||
Other Expenses
|
(921,990
|
) |
(903,737
|
) |
(150,135
|
) |
(547,612
|
) |
(65,249
|
) |
(2,588,723
|
) | |||||||||||||
Net Realized and Unrealized Gain from Investments
|
4,437,434
|
10,172,066
|
352,018
|
(733,747
|
) |
—
|
14,227,771
|
||||||||||||||||||
Net Income
|
$ |
4,619,676
|
$ |
10,105,064
|
$ |
357,640
|
$ |
38,280
|
$ |
41,276
|
$ |
15,161,936
|
|||||||||||||
(a) | Other represents the summarized financial information of equity method investments whose results, for segment reporting purposes, have been allocated across more than one of Blackstone’s segments. |
|
December 31, 2017 and the Year Then Ended
|
||||||||||||||||||||||||
|
Real
Estate
|
|
Private
Equity
|
|
Hedge Fund
Solutions
|
|
Credit
|
|
Other (a)
|
|
Total
|
|
|||||||||||||
Statement of Financial Condition
|
|
|
|
|
|
|
|||||||||||||||||||
Assets
|
|
|
|
|
|
|
|||||||||||||||||||
Investments
|
$ |
67,780,737
|
$ |
50,339,913
|
$ |
21,639,763
|
$ |
22,593,717
|
$ |
363
|
$ |
162,354,493
|
|||||||||||||
Other Assets
|
3,077,573
|
2,283,602
|
1,969,832
|
1,573,279
|
154,131
|
9,058,417
|
|||||||||||||||||||
Total Assets
|
$ |
70,858,310
|
$ |
52,623,515
|
$ |
23,609,595
|
$ |
24,166,996
|
$ |
154,494
|
$ |
171,412,910
|
|||||||||||||
Liabilities and Partners’ Capital
|
|
|
|
|
|
|
|||||||||||||||||||
Debt
|
$ |
6,329,068
|
$ |
6,779,634
|
$ |
53,787
|
$ |
4,896,346
|
$ |
—
|
$ |
18,058,835
|
|||||||||||||
Other Liabilities
|
1,618,408
|
430,763
|
1,150,307
|
420,988
|
39,923
|
3,660,389
|
|||||||||||||||||||
Total Liabilities
|
7,947,476
|
7,210,397
|
1,204,094
|
5,317,334
|
39,923
|
21,719,224
|
|||||||||||||||||||
Partners’ Capital
|
62,910,834
|
45,413,118
|
22,405,501
|
18,849,662
|
114,571
|
149,693,686
|
|||||||||||||||||||
Total Liabilities and Partners’ Capital
|
$ |
70,858,310
|
$ |
52,623,515
|
$ |
23,609,595
|
$ |
24,166,996
|
$ |
154,494
|
$ |
171,412,910
|
|||||||||||||
Statement of Operations
|
|
|
|
|
|
|
|||||||||||||||||||
Interest Income
|
$ |
485,751
|
$ |
362,788
|
$ |
2,942
|
$ |
928,670
|
$ |
—
|
$ |
1,780,151
|
|||||||||||||
Other Income
|
1,334,544
|
45,770
|
91,006
|
178,281
|
107,204
|
1,756,805
|
|||||||||||||||||||
Interest Expense
|
(180,258
|
) |
(121,876
|
) |
(2,086
|
) |
(127,153
|
) |
—
|
(431,373
|
) | ||||||||||||||
Other Expenses
|
(703,165
|
) |
(568,369
|
) |
(435,974
|
) |
(258,157
|
) |
(57,830
|
) |
(2,023,495
|
) | |||||||||||||
Net Realized and Unrealized Gain from Investments
|
12,223,852
|
7,892,937
|
1,054,516
|
584,366
|
—
|
21,755,671
|
|||||||||||||||||||
Net Income
|
$ |
13,160,724
|
$ |
7,611,250
|
$ |
710,404
|
$ |
1,306,007
|
$ |
49,374
|
$ |
22,837,759
|
|||||||||||||
(a) | Other represents the summarized financial information of equity method investments whose results, for segment reporting purposes, have been allocated across more than one of Blackstone’s segments. |
|
Real
Estate
|
|
Private Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Total
|
|
|||||||||||
Accrued Performance Allocations, December 31, 2018
|
$ |
2,853,261
|
$ |
2,642,119
|
$ |
22,921
|
$ |
365,623
|
$ |
5,883,924
|
|||||||||||
Performance Allocations as a Result of Changes in Fund Fair Values
|
1,866,491
|
935,707
|
48,484
|
124,526
|
2,975,208
|
||||||||||||||||
Foreign Exchange Loss
|
(10,367
|
) |
—
|
—
|
—
|
(10,367
|
) | ||||||||||||||
Fund Distributions
|
(1,069,530
|
) |
(514,677
|
) |
(47,454
|
) |
(36,655
|
) |
(1,668,316
|
) | |||||||||||
Accrued Performance Allocations, December 31, 2019
|
$ |
3,639,855
|
$ |
3,063,149
|
$ |
23,951
|
$ |
453,494
|
$ |
7,180,449
|
|||||||||||
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Realized Gains (Losses)
|
$ |
28,585
|
$ |
(1,024
|
) | $ |
4,378
|
||||||
Net Change in Unrealized Gains (Losses)
|
62,042
|
(38,113
|
) |
50,222
|
|||||||||
|
$ |
90,627
|
$ |
(39,137
|
) | $ |
54,600
|
||||||
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Realized Gains
|
$ |
46,248
|
$ |
56,381
|
$ |
4,886
|
|||||||
Net Change in Unrealized Gains
|
21,450
|
20,335
|
14,324
|
||||||||||
|
$ |
67,698
|
$ |
76,716
|
$ |
19,210
|
|||||||
Strategy
|
Fair Value
|
|
Unfunded
Commitments |
|
Redemption
Frequency (if currently eligible) |
|
Redemption
Notice Period |
|
|||||||||
Diversified Instruments
|
$ |
221,901
|
$ |
126
|
(a)
|
(a)
|
|||||||||||
Credit Driven
|
79,092
|
268
|
(b)
|
(b)
|
|||||||||||||
Equity
|
6,245
|
—
|
(c)
|
(c)
|
|||||||||||||
Commodities
|
1,613
|
—
|
(d)
|
(d)
|
|||||||||||||
|
$
|
308,851
|
$ |
394
|
|
|
|||||||||||
(a) | Diversified Instruments include investments in funds that invest across multiple strategies. Investments representing 3% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. The remaining 97% of investments in this category are redeemable as of the reporting date. |
(b) | The Credit Driven category includes investments in hedge funds that invest primarily in domestic and international bonds. Investments representing 21% of the fair value of the investments in this category are in liquidation. The remaining 79% of investments in this category are redeemable as of the reporting date. |
(c) |
The Equity category includes investments in hedge funds that invest primarily in domestic and international equity securities. Investments representing 100% of the fair value of the investments in this category are in liquidation. As of the reporting date, the investee fund manager had elected to side
|
(d) | The Commodities category includes investments in commodities-focused funds that primarily invest in futures and physical-based commodity driven strategies. Investments representing 100% of the fair value of the investments in this category may not be redeemed at, or within three months of, the reporting date. |
|
December 31, 2019
|
December 31, 2018
|
|||||||||||||||||||||||||||||||
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|||||||||||||||||||||||||||||
|
Notional
|
|
Fair
Value |
|
Notional
|
|
Fair
Value |
|
Notional
|
|
Fair
Value |
|
Notional
|
|
Fair
Value |
|
|||||||||||||||||
Freestanding Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Blackstone
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Interest Rate Contracts
|
$ |
1,256,287
|
$ |
53,129
|
$ |
165,852
|
$ |
4,895
|
$ |
798,137
|
$ |
43,632
|
$ |
844,620
|
$ |
39,164
|
|||||||||||||||||
Foreign Currency Contracts
|
344,422
|
1,231
|
97,626
|
802
|
224,841
|
1,286
|
245,371
|
1,636
|
|||||||||||||||||||||||||
Credit Default Swaps
|
7,617
|
36
|
16,697
|
197
|
—
|
—
|
34,060
|
4,004
|
|||||||||||||||||||||||||
Investments of Consolidated Blackstone Funds
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Foreign Currency Contracts
|
106,906
|
307
|
40,110
|
1,167
|
108,271
|
524
|
16,952
|
164
|
|||||||||||||||||||||||||
Interest Rate Contracts
|
—
|
—
|
33,000
|
1,728
|
—
|
—
|
10,000
|
311
|
|||||||||||||||||||||||||
Credit Default Swaps
|
5,108
|
58
|
47,405
|
960
|
20,952
|
55
|
46,685
|
5,710
|
|||||||||||||||||||||||||
Total Return Swaps
|
4,558
|
21
|
27,334
|
464
|
—
|
—
|
31,440
|
1,855
|
|||||||||||||||||||||||||
Other
|
1
|
4
|
1
|
2
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||
|
$ |
1,724,899
|
$ |
54,786
|
$ |
428,025
|
$ |
10,215
|
$ |
1,152,201
|
$ |
45,497
|
$ |
1,229,128
|
$ |
52,844
|
|||||||||||||||||
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Freestanding Derivatives
|
|
|
|
|
|
|
|
|
|
||||
Realized Gains (Losses)
|
|
|
|
||||||||||
Interest Rate Contracts
|
$ |
(3,570
|
) | $ |
2,968
|
$ |
(2,400
|
) | |||||
Foreign Currency Contracts
|
6,099
|
10,761
|
(6,333
|
) | |||||||||
Credit Default Swaps
|
3,209
|
(539
|
) |
(3,764
|
) | ||||||||
Total Return Swaps
|
(908
|
) |
145
|
295
|
|||||||||
Other
|
(286
|
) |
(120
|
) |
(417
|
) | |||||||
|
$ |
4,544
|
$ |
13,215
|
$ |
(12,619
|
) | ||||||
Net Change in Unrealized Gains (Losses)
|
|
|
|
||||||||||
Interest Rate Contracts
|
50,431
|
36,472
|
(24,629
|
) | |||||||||
Foreign Currency Contracts
|
(441
|
) |
(6,682
|
) |
(3,556
|
) | |||||||
Credit Default Swaps
|
3,400
|
(521
|
) |
4,881
|
|||||||||
Total Return Swaps
|
1,296
|
(2,107
|
) |
(447
|
) | ||||||||
Other
|
(36
|
) |
—
|
129
|
|||||||||
|
$ |
54,650
|
$ |
27,162
|
$ |
(23,622
|
) | ||||||
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
Assets
|
|
|
|
|
|
|
|||
Loans and Receivables
|
$ |
500,751
|
$ |
304,173
|
|||||
Equity and Preferred Securities
|
432,472
|
390,095
|
|||||||
Debt Securities
|
506,924
|
529,698
|
|||||||
Assets of Consolidated CLO Vehicles
|
|
|
|||||||
Corporate Loans
|
6,801,691
|
6,766,700
|
|||||||
Other
|
770
|
—
|
|||||||
|
$ |
8,242,608
|
$ |
7,990,666
|
|||||
Liabilities
|
|
|
|
|
|
|
|||
Liabilities of Consolidated CLO Vehicles
|
|
|
|||||||
Senior Secured Notes
|
|
|
|||||||
Loans Payable
|
$ |
6,455,016
|
$ |
6,473,233
|
|||||
Due to Affiliates
|
57,717
|
3,201
|
|||||||
Subordinated Notes
|
|
|
|||||||
Loans Payable
|
24,738
|
7,478
|
|||||||
Due to Affiliates
|
20,535
|
52,811
|
|||||||
|
$ |
6,558,006
|
$ |
6,536,723
|
|||||
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2019
|
2018
|
2017
|
||||||||||||||||||||||
|
Realized
Gains
(Losses)
|
|
Net Change
in Unrealized Gains
(Losses)
|
|
Realized
Gains
(Losses)
|
|
Net Change
in Unrealized Gains
(Losses)
|
|
Realized
Gains
(Losses)
|
|
Net Change
in Unrealized Gains
(Losses)
|
|
|||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans and Receivables
|
$ |
(4,595
|
) | $ |
(6,533
|
) | $ |
291
|
$ |
(447
|
) | $ |
(1,214
|
) | $ |
6,590
|
|||||||||
Equity and Preferred Securities
|
16,493
|
(2,331
|
) |
3,451
|
(3,589
|
) |
4,611
|
22,326
|
|||||||||||||||||
Debt Securities
|
(7,139
|
) |
12,748
|
(1,105
|
) |
(29,069
|
) |
4,866
|
(3,390
|
) | |||||||||||||||
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|||||||||||||||||||
Corporate Loans
|
(29,191
|
) |
96,221
|
(8,749
|
) |
(285,698
|
) |
(3,827
|
) |
(6,603
|
) | ||||||||||||||
Corporate Bonds
|
—
|
—
|
(24,056
|
) |
9,693
|
12,442
|
(36,219
|
) | |||||||||||||||||
Other
|
—
|
133
|
—
|
6
|
—
|
454
|
|||||||||||||||||||
|
$ |
(24,432
|
) | $ |
100,238
|
$ |
(30,168
|
) | $ |
(309,104
|
) | $ |
16,878
|
$ |
(16,842
|
) | |||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Liabilities of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|||||||||||||||||||
Senior Secured Notes
|
$ |
—
|
$ |
(40,050
|
) | $ |
—
|
$ |
51,048
|
$ |
—
|
$ |
—
|
||||||||||||
Subordinated Notes
|
—
|
15,017
|
—
|
254,966
|
—
|
81,460
|
|||||||||||||||||||
|
$ |
—
|
$ |
(25,033
|
) | $ |
—
|
$ |
306,014
|
$ |
—
|
$ |
81,460
|
||||||||||||
|
December 31, 2019
|
December 31, 2018
|
|||||||||||||||||||||||
|
|
|
For Financial Assets
Past Due (a)
|
|
|
For Financial Assets
Past Due (a)
|
|||||||||||||||||||
|
Excess
(Deficiency) of Fair Value Over Principal |
|
Fair
Value |
|
Excess
(Deficiency) of Fair Value Over Principal |
|
Excess
(Deficiency) of Fair Value Over Principal |
|
Fair
Value |
|
Excess
(Deficiency) of Fair Value Over Principal |
|
|||||||||||||
Loans and Receivables
|
$ |
(3,875
|
) | $ |
—
|
$ |
—
|
$ |
2,421
|
$ |
—
|
$ |
—
|
||||||||||||
Debt Securities
|
(14,667
|
) |
—
|
—
|
(26,660
|
) |
—
|
—
|
|||||||||||||||||
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
|
|||||||||||||||||||
Corporate Loans
|
(234,430
|
) |
—
|
—
|
(301,085
|
) |
—
|
—
|
|||||||||||||||||
Other
|
|
133
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
||
|
$ |
(252,839
|
) | $ |
—
|
$ |
—
|
$ |
(325,324
|
) | $ |
—
|
$ |
—
|
|||||||||||
(a) | Corporate Loans within CLO assets are classified as past due if contractual payments are more than one day past due. |
|
December 31, 2019
|
||||||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
NAV
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and Cash Equivalents — Money Market Funds and Short-Term Investments
|
$ |
456,784
|
$ |
—
|
$ |
—
|
$ |
—
|
$ |
456,784
|
|||||||||||
Investments
|
|
|
|
|
|
||||||||||||||||
Investments of Consolidated Blackstone Funds (a)
|
|
|
|
|
|
||||||||||||||||
Investment Funds
|
—
|
—
|
—
|
23,647
|
23,647
|
||||||||||||||||
Equity Securities
|
31,812
|
40,495
|
255,900
|
—
|
328,207
|
||||||||||||||||
Partnership and LLC Interests
|
—
|
13,116
|
418,250
|
—
|
431,366
|
||||||||||||||||
Debt Instruments
|
—
|
715,246
|
79,381
|
—
|
794,627
|
||||||||||||||||
Freestanding Derivatives
|
|
|
|
|
|
||||||||||||||||
Foreign Currency Contracts
|
—
|
307
|
—
|
—
|
307
|
||||||||||||||||
Credit Default Swaps
|
—
|
58
|
—
|
—
|
58
|
||||||||||||||||
Total Return Swaps
|
—
|
21
|
—
|
—
|
21
|
||||||||||||||||
Other
|
—
|
4
|
—
|
—
|
4
|
||||||||||||||||
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
||||||||||||||||
Corporate Loans
|
—
|
6,505,720
|
295,971
|
—
|
6,801,691
|
||||||||||||||||
Other
|
—
|
—
|
770
|
—
|
770
|
||||||||||||||||
Total Investments of Consolidated Blackstone Funds
|
31,812
|
7,274,967
|
1,050,272
|
23,647
|
8,380,698
|
||||||||||||||||
Corporate Treasury Investments
|
|
|
|
|
|
||||||||||||||||
Equity Securities
|
429,527
|
—
|
—
|
—
|
429,527
|
||||||||||||||||
Debt Instruments
|
297,111
|
1,385,582
|
26,345
|
—
|
1,709,038
|
||||||||||||||||
Other
|
—
|
—
|
2,944
|
278,078
|
281,022
|
||||||||||||||||
Total Corporate Treasury Investments
|
726,638
|
1,385,582
|
29,289
|
278,078
|
2,419,587
|
||||||||||||||||
Other Investments
|
200,478
|
—
|
—
|
7,126
|
207,604
|
||||||||||||||||
Total Investments
|
958,928
|
8,660,549
|
1,079,561
|
308,851
|
11,007,889
|
||||||||||||||||
Accounts Receivable — Loans and Receivables
|
—
|
—
|
500,751
|
—
|
500,751
|
||||||||||||||||
Other Assets
|
|
|
|
|
|
||||||||||||||||
Freestanding Derivatives
|
|
|
|
|
|
||||||||||||||||
Interest Rate Contracts
|
502
|
52,627
|
—
|
—
|
53,129
|
||||||||||||||||
Foreign Currency Contracts
|
—
|
1,231
|
—
|
—
|
1,231
|
||||||||||||||||
Credit Default Swaps
|
—
|
36
|
—
|
—
|
36
|
||||||||||||||||
Total Other Assets
|
502
|
53,894
|
—
|
—
|
54,396
|
||||||||||||||||
|
$
|
1,416,214
|
$
|
8,714,443
|
$
|
1,580,312
|
$
|
308,851
|
$
|
12,019,820
|
|||||||||||
|
December 31, 2019
|
||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|
|||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
|
|
|
|
|
|||||||||||||
Senior Secured Notes (b)
|
$ |
—
|
$ |
6,455,016
|
$ |
—
|
$ |
6,455,016
|
|||||||||
Subordinated Notes (b)
|
—
|
24,738
|
—
|
24,738
|
|||||||||||||
Total Loans Payable
|
—
|
6,479,754
|
—
|
6,479,754
|
|||||||||||||
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
|
|
|
|
|
|||||||||||||
Senior Secured Notes (b)
|
—
|
57,717
|
—
|
57,717
|
|||||||||||||
Subordinated Notes (b)
|
—
|
20,535
|
—
|
20,535
|
|||||||||||||
Total Due to Affiliates
|
—
|
78,252
|
—
|
78,252
|
|||||||||||||
Securities Sold, Not Yet Purchased
|
19,977
|
55,569
|
—
|
75,546
|
|||||||||||||
Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
|
|
|||||||||||||
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a)
|
|
|
|
|
|||||||||||||
Foreign Currency Contracts
|
—
|
1,167
|
—
|
1,167
|
|||||||||||||
Credit Default Swaps
|
—
|
960
|
—
|
960
|
|||||||||||||
Total Return Swaps
|
—
|
464
|
—
|
464
|
|||||||||||||
Interest Rate Swaps
|
—
|
1,728
|
—
|
1,728
|
|||||||||||||
Other
|
—
|
2
|
—
|
2
|
|||||||||||||
Total Liabilities of Consolidated Blackstone Funds
|
—
|
4,321
|
—
|
4,321
|
|||||||||||||
Freestanding Derivatives
|
|
|
|
|
|||||||||||||
Interest Rate Contracts
|
150
|
4,745
|
—
|
4,895
|
|||||||||||||
Foreign Currency Contracts
|
—
|
802
|
—
|
802
|
|||||||||||||
Credit Default Swaps
|
—
|
197
|
—
|
197
|
|||||||||||||
Total Freestanding Derivatives
|
150
|
5,744
|
—
|
5,894
|
|||||||||||||
Total Accounts Payable, Accrued Expenses and Other Liabilities
|
150
|
10,065
|
—
|
10,215
|
|||||||||||||
|
$ |
20,127
|
$ |
6,623,640
|
$ |
—
|
$ |
6,643,767
|
|||||||||
|
December 31, 2018
|
||||||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
NAV
|
|
Total
|
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and Cash Equivalents — Money Market Funds and Short-Term Investments
|
$ |
623,526
|
$ |
—
|
$ |
—
|
$ |
—
|
$ |
623,526
|
|||||||||||
Investments
|
|
|
|
|
|
||||||||||||||||
Investments of Consolidated Blackstone Funds (a)
|
|
|
|
|
|
||||||||||||||||
Investment Funds
|
—
|
—
|
—
|
80,726
|
80,726
|
||||||||||||||||
Equity Securities
|
42,937
|
34,946
|
201,566
|
—
|
279,449
|
||||||||||||||||
Partnership and LLC Interests
|
—
|
7,170
|
355,273
|
—
|
362,443
|
||||||||||||||||
Debt Instruments
|
—
|
752,622
|
133,819
|
—
|
886,441
|
||||||||||||||||
Freestanding Derivatives
|
|
|
|
|
|
||||||||||||||||
Foreign Currency Contracts
|
—
|
524
|
—
|
—
|
524
|
||||||||||||||||
Credit Default Swaps
|
—
|
55
|
—
|
—
|
55
|
||||||||||||||||
Assets of Consolidated CLO Vehicles
|
|
|
|
|
|
||||||||||||||||
Corporate Loans
|
—
|
6,093,342
|
673,358
|
—
|
6,766,700
|
||||||||||||||||
Total Investments of Consolidated Blackstone Funds
|
42,937
|
6,888,659
|
1,364,016
|
80,726
|
8,376,338
|
||||||||||||||||
Corporate Treasury Investments
|
|
|
|
|
|
||||||||||||||||
Equity Securities
|
233,834
|
—
|
—
|
—
|
233,834
|
||||||||||||||||
Debt Instruments
|
243,297
|
1,444,968
|
24,568
|
—
|
1,712,833
|
||||||||||||||||
Other
|
—
|
—
|
—
|
259,826
|
259,826
|
||||||||||||||||
Total Corporate Treasury Investments
|
477,131
|
1,444,968
|
24,568
|
259,826
|
2,206,493
|
||||||||||||||||
Other Investments
|
176,432
|
—
|
31,617
|
7,581
|
215,630
|
||||||||||||||||
Total Investments
|
696,500
|
8,333,627
|
1,420,201
|
348,133
|
10,798,461
|
||||||||||||||||
Accounts Receivable — Loans and Receivables
|
—
|
—
|
304,173
|
—
|
304,173
|
||||||||||||||||
Other Assets
|
|
|
|
|
|
||||||||||||||||
Freestanding Derivatives
|
|
|
|
|
|
||||||||||||||||
Interest Rate Contracts
|
1,274
|
42,358
|
—
|
—
|
43,632
|
||||||||||||||||
Foreign Currency Contracts
|
—
|
1,286
|
—
|
—
|
1,286
|
||||||||||||||||
Total Other Assets
|
1,274
|
43,644
|
—
|
—
|
44,918
|
||||||||||||||||
|
$ |
1,321,300
|
$ |
8,377,271
|
$ |
1,724,374
|
$ |
348,133
|
$ |
11,771,078
|
|||||||||||
|
December 31, 2018
|
||||||||||||||||
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
|
|||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans Payable — Liabilities of Consolidated CLO Vehicles (a)
|
|
|
|
|
|||||||||||||
Senior Secured Notes (b)
|
$ |
—
|
$ |
6,473,233
|
$ |
—
|
$ |
6,473,233
|
|||||||||
Subordinated Notes (b)
|
—
|
7,478
|
—
|
7,478
|
|||||||||||||
Total Loans Payable
|
—
|
6,480,711
|
—
|
6,480,711
|
|||||||||||||
Due to Affiliates — Liabilities of Consolidated CLO Vehicles (a)
|
|
|
|
|
|||||||||||||
Senior Secured Notes (b)
|
—
|
3,201
|
—
|
3,201
|
|||||||||||||
Subordinated Notes (b)
|
—
|
52,811
|
—
|
52,811
|
|||||||||||||
Total Due to Affiliates
|
—
|
56,012
|
—
|
56,012
|
|||||||||||||
Securities Sold, Not Yet Purchased
|
35,959
|
106,658
|
—
|
142,617
|
|||||||||||||
Accounts Payable, Accrued Expenses and Other Liabilities
|
|
|
|
|
|||||||||||||
Liabilities of Consolidated Blackstone Funds — Freestanding Derivatives (a) Foreign Currency Contracts
|
—
|
164
|
—
|
164
|
|||||||||||||
Credit Default Swaps
|
—
|
5,710
|
—
|
5,710
|
|||||||||||||
Total Return Swaps
|
—
|
1,855
|
—
|
1,855
|
|||||||||||||
Interest Rate Swaps
|
—
|
311
|
—
|
311
|
|||||||||||||
Total Liabilities of Consolidated Blackstone Funds
|
—
|
8,040
|
—
|
8,040
|
|||||||||||||
Freestanding Derivatives
|
|
|
|
|
|||||||||||||
Interest Rate Contracts
|
3,080
|
36,084
|
—
|
39,164
|
|||||||||||||
Foreign Currency Contracts
|
—
|
1,636
|
—
|
1,636
|
|||||||||||||
Credit Default Swaps
|
—
|
4,004
|
—
|
4,004
|
|||||||||||||
Total Freestanding Derivatives
|
3,080
|
41,724
|
—
|
44,804
|
|||||||||||||
Total Accounts Payable, Accrued Expenses and Other Liabilities
|
3,080
|
49,764
|
—
|
52,844
|
|||||||||||||
|
$ |
39,039
|
$ |
6,693,145
|
$ |
—
|
$ |
6,732,184
|
|||||||||
(a) | Pursuant to GAAP consolidation guidance, Blackstone is required to consolidate all VIEs in which it has been identified as the primary beneficiary, including certain CLO vehicles, and other funds in which a consolidated entity of Blackstone, such as the general partner of the fund, has a controlling financial interest. While Blackstone is required to consolidate certain funds, including CLO vehicles, for GAAP purposes, Blackstone has no ability to utilize the assets of these funds and there is no recourse to Blackstone for their liabilities since these are client assets and liabilities. |
(b) | Senior and subordinated notes issued by CLO vehicles are classified based on the more observable fair value of CLO assets less (1) the fair value of any beneficial interests held by Blackstone, and (2) the carrying value of any beneficial interests that represent compensation for services. |
|
Fair Value
|
|
Valuation
Techniques |
|
Unobservable
Inputs |
|
Ranges
|
|
Weighted
Average (a) |
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investments of Consolidated Blackstone Funds
|
|
|
|
|
|
|||||||||||||||
Equity Securities
|
$ |
198,094
|
Discounted Cash Flows
|
Discount Rate
|
7.2%
|
13.1%
|
||||||||||||||
|
|
|
Revenue CAGR
|
0.0% - 25.4%
|
9.1%
|
|||||||||||||||
|
|
|
Book Value Multiple
|
0.9x - 10.0x
|
6.4x
|
|||||||||||||||
|
|
|
EBITDA Multiple
|
1.1x - 13.5x
|
8.3x
|
|||||||||||||||
|
|
|
Exit Capitalization Rate
|
5.0% - 11.4%
|
7.9%
|
|||||||||||||||
|
|
|
Exit Multiple
-
EBITDA
|
0.1x
-
17.0x
|
9.5x
|
|||||||||||||||
|
|
|
Exit Multiple - NOI
|
14.3x
|
N/A
|
|||||||||||||||
|
|
|
Exit Multiple - P/E
|
17.0x
|
N/A
|
|||||||||||||||
|
471
|
Market Comparable Companies
|
Book Value Multiple
|
1.1x
|
N/A
|
|||||||||||||||
|
30,250
|
Other
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
26,958
|
Transaction Price
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
127
|
Third Party Pricing
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Partnership and LLC Interests
|
367,308
|
Discounted Cash Flows
|
Discount Rate
|
0.9%
-
26.5%
|
9.2%
|
|||||||||||||||
|
|
|
Revenue CAGR
|
-4.3%
-
26.3%
|
17.1%
|
|||||||||||||||
|
|
|
Book Value Multiple
|
1.0x - 1.1x
|
1.1x
|
|||||||||||||||
|
|
|
EBITDA Multiple
|
6.5x - 14.0x
|
9.8x
|
|||||||||||||||
|
|
|
Exit Capitalization Rate
|
2.0%
-
27.0%
|
5.8%
|
|||||||||||||||
|
|
|
Exit Multiple - EBITDA
|
3.5x - 18.6x
|
10.2x
|
|||||||||||||||
|
|
|
Exit Multiple - NOI
|
13.0x
-
15.7x
|
14.6x
|
|||||||||||||||
|
3,330
|
Market Comparable Companies
|
Book Value Multiple
|
1.2x
|
N/A
|
|||||||||||||||
|
|
|
Dollar/Acre Multiple
|
$12.0
|
N/A
|
|||||||||||||||
|
2,637
|
Other
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
44,975
|
Transaction Price
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Debt Instruments
|
8,628
|
Discounted Cash Flows
|
Discount Rate
|
7.1%
-
58.2%
|
12.1%
|
|||||||||||||||
|
|
|
Exit Capitalization Rate
|
5.5% - 8.0%
|
6.7%
|
|||||||||||||||
|
|
|
Exit Multiple - EBITDA
|
6.5x
|
N/A
|
|||||||||||||||
|
69,620
|
Third Party Pricing
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
1,133
|
Transaction Price
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Assets of Consolidated CLO Vehicles
|
296,741
|
Third Party Pricing
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Total Investments of Consolidated Blackstone Funds
|
1,050,272
|
|
|
|
Fair Value
|
|
Valuation
Techniques
|
|
Unobservable
Inputs
|
|
Ranges
|
|
Weighted-
Average (a)
|
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Investments of Consolidated Blackstone Funds
|
|
|
|
|
|
|||||||||||||||
Equity Securities
|
$ |
138,725
|
Discounted Cash Flows
|
Discount Rate
|
7.1%
-
26.1%
|
12.6%
|
||||||||||||||
|
|
|
Revenue CAGR
|
-0.8%
-
32.4%
|
6.6%
|
|||||||||||||||
|
|
|
Book Value Multiple
|
0.9x - 9.5x
|
8.3x
|
|||||||||||||||
|
|
|
Exit Capitalization Rate
|
5.0%
-
11.4%
|
8.0%
|
|||||||||||||||
|
|
|
Exit Multiple
-
EBITDA
|
0.1x
-
17.5x
|
10.3x
|
|||||||||||||||
|
|
|
Exit Multiple - NOI
|
12.8x
|
N/A
|
|||||||||||||||
|
|
|
Exit Multiple
-
P/E
|
17.0x
|
N/A
|
|||||||||||||||
|
21,050
|
Market Comparable Companies
|
Book Value Multiple
|
0.8x - 8.0x
|
1.3x
|
|||||||||||||||
|
|
|
Dollar/Acre Multiple
|
$7.0
-
$44.1
|
$32.9
|
|||||||||||||||
|
21,492
|
Other
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
20,250
|
Transaction Price
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
49
|
Third Party Pricing
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Partnership and LLC Interests
|
295,251
|
Discounted Cash Flows
|
Discount Rate
|
4.1%
-
26.5%
|
9.7%
|
|||||||||||||||
|
|
|
Revenue CAGR
|
-1.1%
-
48.4%
|
26.9%
|
|||||||||||||||
|
|
|
Book Value Multiple
|
8.5x - 9.3x
|
9.2x
|
|||||||||||||||
|
|
|
Exit Capitalization Rate
|
2.9%
-
15.0%
|
6.3%
|
|||||||||||||||
|
|
|
Exit Multiple - EBITDA
|
0.1x - 15.3x
|
10.0x
|
|||||||||||||||
|
|
|
Exit Multiple - NOI
|
13.3x
|
N/A
|
|||||||||||||||
|
9,444
|
Market Comparable Companies
|
Book Value Multiple
|
1.1x
|
N/A
|
|||||||||||||||
|
|
|
Dollar/Acre Multiple
|
$5.3
-
$12.0
|
$7.5
|
|||||||||||||||
|
9,390
|
Other
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
41,188
|
Transaction Price
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Debt Instruments
|
8,342
|
Discounted Cash Flows
|
Discount Rate
|
7.0%
-
19.3%
|
9.8%
|
|||||||||||||||
|
|
|
Revenue CAGR
|
0.7%
|
N/A
|
|||||||||||||||
|
|
|
Exit Multiple - EBITDA
|
6.5x
|
N/A
|
|||||||||||||||
|
120,843
|
Third Party Pricing
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
4,634
|
Transaction Price
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Assets of Consolidated CLO Vehicles
|
41
|
Discounted Cash Flows
|
Discount Rate
|
5.0%
|
N/A
|
|||||||||||||||
|
673,317
|
Third Party Pricing
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Total Investments of Consolidated Blackstone Funds
|
1,364,016
|
|
|
|
Fair Value
|
|
Valuation
Techniques
|
|
Unobservable
Inputs
|
|
Ranges
|
|
Weighted-
Average (a) |
|
||||||||||
Corporate Treasury Investments
|
$ |
7,947
|
Discounted Cash Flows
|
Discount Rate
|
4.4% - 7.5%
|
6.6%
|
||||||||||||||
|
|
|
Default Rate
|
2.0%
|
N/A
|
|||||||||||||||
|
|
|
Pre-payment
Rate
|
20.0%
|
N/A
|
|||||||||||||||
|
|
|
Recovery Lag
|
12 Months
-
|
13 Months
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21 Months
|
|
|
|
|
|
|
|
|
Recovery Rate
|
17.5%
-
70.0%
|
67.7%
|
|||||||||||||||
|
|
|
Reinvestment Rate
|
LIBOR + 400 bps
|
N/A
|
|||||||||||||||
|
16,621
|
Third Party Pricing
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
Loans and Receivables
|
304,173
|
Discounted Cash Flows
|
Discount Rate
|
6.1%
-
12.8%
|
8.7%
|
|||||||||||||||
Other Investments
|
26,631
|
Discounted Cash Flows
|
Discount Rate
|
1.0%
-
15.0%
|
2.8%
|
|||||||||||||||
|
|
|
Default Rate
|
2.0%
|
N/A
|
|||||||||||||||
|
|
|
Pre-payment
Rate
|
20.0%
|
N/A
|
|||||||||||||||
|
|
|
Recovery Lag
|
12 Months
|
N/A
|
|||||||||||||||
|
|
|
Recovery Rate
|
70.0%
|
N/A
|
|||||||||||||||
|
|
|
Reinvestment Rate
|
LIBOR + 400 bps
|
N/A
|
|||||||||||||||
|
4,986
|
Transaction Price
|
N/A
|
N/A
|
N/A
|
|||||||||||||||
|
$ |
1,724,374
|
|
|
|
|
||||||||||||||
N/A
|
|
Not applicable.
|
CAGR
|
|
Compound annual growth rate.
|
EBITDA
|
|
Earnings before interest, taxes, depreciation and amortization.
|
Exit Multiple
|
|
Ranges include the last twelve months EBITDA, forward EBITDA and price/earnings exit multiples.
|
LIBOR
|
|
London Interbank Offered Rate.
|
NOI
|
|
Net operating income.
|
P/E
|
|
Price-earnings ratio.
|
Third Party Pricing
|
|
Third Party Pricing is generally determined on the basis of unadjusted prices between market participants provided by reputable dealers or pricing services.
|
Transaction Price
|
|
Includes recent acquisitions or transactions.
|
(a)
|
|
Unobservable inputs were weighted based on the fair value of the investments included in the range.
|
|
Level III Financial Assets at Fair Value
Year Ended December 31,
|
||||||||||||||||||||||||||||||||
|
2019
|
2018
|
|||||||||||||||||||||||||||||||
|
Investments of
Consolidated Funds |
|
Loans
and
Receivables |
|
Other
Investments (a) |
|
Total
|
|
Investments of
Consolidated Funds |
|
Loans
and
Receivables
|
|
Other
Investments (a) |
|
Total
|
|
|||||||||||||||||
Balance, Beginning of Period
|
$ |
1,364,016
|
$ |
304,173
|
$ |
56,185
|
$ |
1,724,374
|
$ |
1,029,371
|
$ |
239,659
|
$ |
119,642
|
$ |
1,388,672
|
|||||||||||||||||
Transfer In Due to Consolidation and Acquisition
|
—
|
—
|
—
|
—
|
50,043
|
—
|
—
|
50,043
|
|||||||||||||||||||||||||
Transfer Out Due to Deconsolidation
|
—
|
—
|
—
|
—
|
(217,182
|
) |
—
|
—
|
(217,182
|
) | |||||||||||||||||||||||
Transfer In to Level III (b)
|
154,046
|
—
|
29,941
|
183,987
|
190,497
|
—
|
8,484
|
198,981
|
|||||||||||||||||||||||||
Transfer Out of Level III (b)
|
(507,546
|
) |
—
|
(40,426
|
) |
(547,972
|
) |
(127,829
|
) |
—
|
(56,534
|
) |
(184,363
|
) | |||||||||||||||||||
Purchases
|
510,516
|
1,037,019
|
18,816
|
1,566,351
|
862,844
|
1,016,838
|
28,041
|
1,907,723
|
|||||||||||||||||||||||||
Sales
|
(536,156
|
) |
(834,145
|
) |
(34,905
|
) |
(1,405,206
|
) |
(457,824
|
) |
(953,538
|
) |
(43,213
|
) |
(1,454,575
|
) | |||||||||||||||||
Settlements
|
—
|
(21,262
|
) |
—
|
(21,262
|
) |
—
|
(22,285
|
) |
(73
|
) |
(22,358
|
) | ||||||||||||||||||||
Changes in Gains (Losses) Included in Earnings
|
65,396
|
14,966
|
(322
|
) |
80,040
|
34,096
|
23,499
|
(162
|
) |
57,433
|
|||||||||||||||||||||||
Balance, End of Period
|
$ |
1,050,272
|
$ |
500,751
|
$ |
29,289
|
$ |
1,580,312
|
$ |
1,364,016
|
$ |
304,173
|
$ |
56,185
|
$ |
1,724,374
|
|||||||||||||||||
Changes in Unrealized Gains (Losses) Included in Earnings Related to Financial Assets Still Held at the Reporting Date
|
$ |
33,721
|
$ |
(6,533
|
) | $ |
588
|
$ |
27,776
|
$ |
(4,378
|
) | $ |
—
|
$ |
2,439
|
$ |
(1,939
|
) | ||||||||||||||
(a) | Represents corporate treasury investments and Other Investments. |
(b) | Transfers in and out of Level III financial assets and liabilities were due to changes in the observability of inputs used in the valuation of such assets and liabilities. |
9.
|
Variable Interest Entities
|
|
December 31,
2019 |
|
December 31,
2018 |
|
|||||
Investments
|
$ |
1,216,932
|
$ |
942,700
|
|||||
Due from Affiliates
|
143,949
|
254,744
|
|||||||
Potential Clawback Obligation
|
109,240
|
159,691
|
|||||||
Maximum Exposure to Loss
|
$ |
1,470,121
|
$ |
1,357,135
|
|||||
Amounts Due to
Non-Consolidated
VIEs
|
$ |
231
|
$ |
207
|
|||||
11.
|
Other Assets and Accounts Payable, Accrued Expenses and Other Liabilities
|
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
Furniture, Equipment and Leasehold Improvements
|
$ |
417,373
|
$ |
360,571
|
|||||
Less: Accumulated Depreciation
|
(262,891
|
) |
(240,199
|
) | |||||
Furniture, Equipment and Leasehold Improvements, Net
|
154,482
|
120,372
|
|||||||
Prepaid Expenses
|
159,333
|
110,732
|
|||||||
Freestanding Derivatives
|
54,396
|
44,918
|
|||||||
Other
|
14,282
|
18,226
|
|||||||
|
$ |
382,493
|
$ |
294,248
|
|||||
12.
|
Offsetting of Assets and Liabilities
|
|
|
|
|
||||||||||||||
|
|
December 31, 2019
|
|||||||||||||||
|
|
Gross and Net
Amounts of Assets
Presented in the
Statement of
Financial Condition |
|
Gross Amounts Not Offset in
the Statement of
Financial Condition
|
|
|
|
||||||||||
|
Financial
Instruments (a)
|
|
Cash Collateral
Received
|
|
Net
Amount |
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
$
|
54,479
|
|
|
$
|
380
|
|
|
$
|
—
|
|
|
$
|
54,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
December 31, 2019
|
|||||||||||||||
|
|
Gross and Net
Amounts of Liabilities
Presented in the
Statement of
Financial Condition
|
|
Gross Amounts Not Offset in
the Statement of
Financial Condition
|
|
|
|
||||||||||
|
Financial
Instruments (a)
|
|
Cash Collateral
Pledged
|
|
Net
Amount |
|
|||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
$
|
10,215
|
|
|
$
|
380
|
|
|
$
|
9,198
|
|
|
$
|
637
|
|
|
Repurchase Agreements
|
|
|
154,118
|
|
|
|
154,118
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
164,333
|
|
|
$
|
154,498
|
|
|
$
|
9,198
|
|
|
$
|
637
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
December 31, 2018
|
|||||||||||||||
|
|
Gross and Net
Amounts of Assets
Presented in the
Statement of
Financial Condition |
|
Gross Amounts Not Offset in
the Statement of
Financial Condition
|
|
|
|
||||||||||
|
Financial
Instruments (a)
|
|
Cash Collateral
Received
|
|
Net
Amount |
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Freestanding Derivatives
|
|
$
|
45,416
|
|
|
$
|
37,788
|
|
|
$
|
5,547
|
|
|
$
|
2,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
||||||||||||||||
|
Gross and Net
Amounts of Liabilities
Presented in the
Statement of
Financial Condition
|
|
Gross Amounts Not Offset in
the Statement of
Financial Condition
|
|
|
||||||||||||
|
Financial
Instruments
|
|
Cash Collateral
Pledged
|
|
Net
Amount |
|
|||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Freestanding Derivatives
|
$ |
52,844
|
$ |
35,905
|
$ |
15,377
|
$ |
1,562
|
|||||||||
Repurchase Agreements
|
222,202
|
222,202
|
—
|
—
|
|||||||||||||
|
$
|
275,046
|
$
|
258,107
|
$
|
15,377
|
$
|
1,562
|
|||||||||
(a) | Amounts presented are inclusive of both legally enforceable master netting agreements, and financial instruments received or pledged as collateral. Financial instruments received or pledged as collateral offset derivative counterparty risk exposure, but do not reduce net balance sheet exposure. |
13.
|
Borrowings
|
|
December 31,
|
||||||||||||||||||||||||
|
2019
|
2018
|
|||||||||||||||||||||||
|
Credit
Available |
|
Borrowing
Outstanding |
|
Effective
Interest
Rate
|
|
Credit
Available |
|
Borrowing
Outstanding |
|
Effective
Interest
Rate
|
|
|||||||||||||
Revolving Credit Facility (a)
|
$ |
1,600,000
|
$ |
—
|
—
|
$ |
1,600,000
|
$ |
—
|
—
|
|||||||||||||||
Blackstone Issued Senior Notes (b)
|
|
|
|
|
|
|
|||||||||||||||||||
5.875%, Due 3/15/2021
|
—
|
—
|
—
|
400,000
|
400,000
|
6.01%
|
|||||||||||||||||||
4.750%, Due 2/15/2023
|
400,000
|
400,000
|
5.08%
|
400,000
|
400,000
|
5.08%
|
|||||||||||||||||||
2.000%, Due 5/19/2025
|
336,390
|
336,390
|
2.12%
|
344,010
|
344,010
|
2.14%
|
|||||||||||||||||||
1.000%, Due 10/5/2026
|
672,780
|
672,780
|
1.13%
|
688,020
|
688,020
|
1.14%
|
|||||||||||||||||||
3.150%, Due 10/2/2027
|
300,000
|
300,000
|
3.30%
|
300,000
|
300,000
|
3.30%
|
|||||||||||||||||||
1.500%, Due 4/10/2029
|
672,780
|
672,780
|
1.70%
|
—
|
—
|
—
|
|||||||||||||||||||
2.500%, Due 1/10/2030
|
500,000
|
500,000
|
2.71%
|
—
|
—
|
—
|
|||||||||||||||||||
6.250%, Due 8/15/2042
|
250,000
|
250,000
|
6.65%
|
250,000
|
250,000
|
6.65%
|
|||||||||||||||||||
5.000%, Due 6/15/2044
|
500,000
|
500,000
|
5.16%
|
500,000
|
500,000
|
5.16%
|
|||||||||||||||||||
4.450%, Due 7/15/2045
|
350,000
|
350,000
|
4.56%
|
350,000
|
350,000
|
4.56%
|
|||||||||||||||||||
4.000%, Due 10/2/2047
|
300,000
|
300,000
|
4.20%
|
300,000
|
300,000
|
4.20%
|
|||||||||||||||||||
3.500%, Due 9/10/2049
|
400,000
|
400,000
|
3.61%
|
—
|
—
|
—
|
|||||||||||||||||||
|
6,281,950
|
4,681,950
|
|
5,132,030
|
3,532,030
|
|
|||||||||||||||||||
Blackstone Fund Facilities (c)
|
113
|
113
|
3.68%
|
—
|
—
|
—
|
|||||||||||||||||||
CLO Vehicles (d)
|
6,859,535
|
6,859,535
|
3.55%
|
6,863,285
|
6,863,285
|
4.20%
|
|||||||||||||||||||
|
$ |
13,141,598
|
$ |
11,541,598
|
|
$ |
11,995,315
|
$ |
10,395,315
|
|
|||||||||||||||
(a) |
The Issuer has a credit facility (the “Credit Facility”) with Citibank, N.A., as Administrative Agent in the amount of
$1.6 billion with a maturity date of September 21, 2023.
Interest on the borrowings is based on an adjusted LIBOR rate or alternate base rate, in each case plus a margin, and undrawn commitments bear a commitment fee of 0.06%. The margin above adjusted LIBOR used to calculate the interest on borrowings was 0.75% as of December 31, 2019 and 2018. The margin is subject to change based on Blackstone’s credit rating. Borrowings may also be made in U.K. sterling, euros, Swiss francs, Japanese yen or Canadian dollars, in each case subject to certain sub-limits. The Credit Facility contains customary representations, covenants and events of default. Financial covenants consist of a maximum net leverage ratio and a requirement to keep a minimum amount of fee-earning assets under management, each tested quarterly. The Borrowing Outstanding at each date represent outstanding but undrawn letters of credit against the credit facility.
|
(b) |
The Issuer has issued long-term borrowings in the form of senior notes (the “Notes”). The Notes are unsecured and unsubordinated obligations of the Issuer. The Notes are fully and unconditionally guaranteed, jointly and severally, by Blackstone, Blackstone Holdings (the “Guarantors”), and the Issuer. The guarantees are unsecured and unsubordinated obligations of the Guarantors. Transaction costs related to the issuance of the Notes have been deducted from the Note liability and are being amortized over the life of the Notes. The indentures include covenants, including limitations on the Issuer’s and the Guarantors’ ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate or sell, transfer or lease assets. The indentures also provide for events of default and further provide that the trustee or the holders of not less than
25%
in aggregate principal amount of the outstanding Notes may declare the Notes immediately due and payable upon the occurrence and during the continuance of any event of default after expiration of any applicable grace period. In the case of specified events of bankruptcy, insolvency, receivership or reorganization, the principal amount of the Notes and any accrued and unpaid interest on the Notes automatically become due and payable. All or a portion of the Notes may be redeemed at the Issuer’s option in whole or in part, at any time and from time to time, prior to their stated maturity, at the make-whole redemption price set forth in the Notes. If a change of control repurchase event occurs, the holders of the Notes may require the Issuer to repurchase the Notes at a repurchase price in cash equal to
101%
of the aggregate principal amount of the Notes repurchased plus any accrued and unpaid interest on the Notes repurchased to, but not including, the date of repurchase.
|
(c) | Represents borrowing facilities for the various consolidated Blackstone Funds used to meet liquidity and investing needs. Certain borrowings under these facilities were used for bridge financing and general liquidity purposes. Other borrowings were used to finance the purchase of investments with the borrowing remaining in place until the disposition or refinancing event. Such borrowings have varying maturities and are rolled over until the disposition or a refinancing event. Because the timing of such events is unknown and may occur in the near term, these borrowings are considered short-term in nature. Borrowings bear interest at spreads to market rates. Borrowings were secured according to the terms of each facility and are generally secured by the investment purchased with the proceeds of the borrowing and/or the uncalled capital commitment of each respective fund. Certain facilities have commitment fees. When a fund borrows, the proceeds are available only for use by that fund and are not available for the benefit of other funds. Collateral within each fund is also available only against the borrowings by that fund and not against the borrowings of other funds. |
(d) | Represents borrowings due to the holders of debt securities issued by CLO vehicles consolidated by Blackstone. These amounts are included within Loans Payable and Due to Affiliates within the Consolidated Statements of Financial Condition. |
|
December 31,
|
||||||||||||||||
|
2019
|
2018
|
|||||||||||||||
Senior Notes
|
Carrying
Value |
|
Fair Value (a)
|
|
Carrying
Value |
|
Fair Value (a)
|
|
|||||||||
5.875%, Due 3/15/2021
|
$ |
—
|
$ |
—
|
$ |
398,947
|
$ |
421,720
|
|||||||||
4.750%, Due 2/15/2023
|
396,247
|
429,280
|
395,166
|
417,600
|
|||||||||||||
2.000%, Due 5/19/2025
|
332,393
|
365,521
|
339,959
|
352,197
|
|||||||||||||
1.000%, Due 10/5/2026
|
664,229
|
691,012
|
679,193
|
647,564
|
|||||||||||||
3.150%, Due 10/2/2027
|
297,046
|
309,540
|
296,717
|
285,030
|
|||||||||||||
1.500%, Due 4/10/2029
|
667,425
|
708,841
|
—
|
—
|
|||||||||||||
2.500%, Due 1/10/2030
|
489,841
|
493,500
|
—
|
—
|
|||||||||||||
6.250%, Due 8/15/2042
|
238,437
|
338,200
|
238,221
|
289,225
|
|||||||||||||
5.000%, Due 6/15/2044
|
488,968
|
606,700
|
488,747
|
490,150
|
|||||||||||||
4.450%, Due 7/15/2045
|
344,157
|
396,235
|
344,038
|
329,770
|
|||||||||||||
4.000%, Due 10/2/2047
|
290,344
|
321,780
|
290,163
|
262,800
|
|||||||||||||
3.500%, Due 9/10/2049
|
391,769
|
399,961
|
—
|
—
|
|||||||||||||
|
$ |
4,600,856
|
$ |
5,060,570
|
$ |
3,471,151
|
$ |
3,496,056
|
|||||||||
(a) | Fair value is determined by broker quote and these notes would be classified as Level II within the fair value hierarchy. |
|
December 31,
|
||||||||||||||||||||||||
|
2019
|
2018
|
|||||||||||||||||||||||
|
Borrowing
Outstanding |
|
Effective
Interest
Rate |
|
Weighted-
Average Remaining Maturity in Years |
|
Borrowing
Outstanding |
|
Effective
Interest
Rate |
|
Weighted-
Average Remaining Maturity in Years |
|
|||||||||||||
Senior Secured Notes
|
$ |
6,527,800
|
3.55%
|
3.5
|
$ |
6,531,550
|
4.20%
|
7.5
|
|||||||||||||||||
Subordinated Notes
|
331,735
|
(a)
|
N/A
|
331,735
|
(a)
|
N/A
|
|||||||||||||||||||
|
$ |
6,859,535
|
|
|
$ |
6,863,285
|
|
|
|||||||||||||||||
(a) | The Subordinated Notes do not have contractual interest rates but instead receive distributions from the excess cash flows of the CLO vehicles. |
|
December 31,
|
||||||||||||||||||||||||
|
2019
|
2018
|
|||||||||||||||||||||||
|
|
|
Amounts Due to Non-
Consolidated Affiliates |
|
|
Amounts Due to Non-
Consolidated Affiliates |
|||||||||||||||||||
|
Fair Value
|
|
Borrowing
Outstanding |
|
Fair
Value |
|
Fair Value
|
|
Borrowing
Outstanding |
|
Fair
Value |
|
|||||||||||||
Senior Secured Notes
|
$ |
6,512,733
|
$ |
57,750
|
$ |
57,717
|
$ |
6,476,434
|
$ |
3,250
|
$ |
3,201
|
|||||||||||||
Subordinated Notes
|
45,273
|
44,734
|
20,535
|
60,289
|
111,659
|
52,811
|
|||||||||||||||||||
|
$ |
6,558,006
|
$ |
102,484
|
$ |
78,252
|
$ |
6,536,723
|
$ |
114,909
|
$ |
56,012
|
|||||||||||||
|
Operating
Borrowings
|
|
Blackstone Fund
Facilities / CLO
Vehicles
|
|
Total Borrowings
|
|
|||||||
2020
|
$ |
—
|
$ |
113
|
$ |
113
|
|||||||
2021
|
—
|
—
|
—
|
||||||||||
2022
|
—
|
—
|
—
|
||||||||||
2023
|
400,000
|
—
|
400,000
|
||||||||||
2024
|
—
|
—
|
—
|
||||||||||
Thereafter
|
4,281,950
|
6,859,535
|
11,141,485
|
||||||||||
|
$ |
4,681,950
|
$ |
6,859,648
|
$ |
11,541,598
|
|||||||
14.
|
Leases
|
|
Year Ended
December 31, 2019
|
|
|||
Operating Lease Cost (a)
|
|
|
|
||
Straight-Line Lease Cost (b)
|
$ |
90,640
|
|||
Variable Lease Cost
|
14,574
|
||||
Sublease Income
|
(796
|
) | |||
|
$ |
104,418
|
|||
(a) | Rent expense for the years ended December 31, 2018 and 2017, was $109.9 million and $104.7 million, respectively. |
(b) | Straight-line lease cost includes short-term leases, which are immaterial. |
|
Year Ended
December 31, 2019 |
|
|||
Operating Cash Flows for Operating Leases
|
$ |
94,854
|
|||
Non-Cash
Right-of-Use
Assets Obtained in Exchange for New Operating Lease Liabilities
|
10,053
|
2020
|
$ |
84,639
|
||
2021
|
88,638
|
|||
2022
|
79,533
|
|||
2023
|
77,287
|
|||
2024
|
65,289
|
|||
Thereafter
|
207,090
|
|||
Total Lease Payments (a)
|
602,476
|
|||
Less: Imputed Interest
|
(59,482
|
) | ||
Present Value of Operating Lease Liabilities
|
$ |
542,994
|
||
(a) | Excludes $138.7 million of lease payments for signed leases that have not yet commenced. |
2019
|
$ |
78,506
|
||
2020
|
72,191
|
|||
2021
|
80,914
|
|||
2022
|
79,094
|
|||
2023
|
77,248
|
|||
Thereafter
|
273,347
|
|||
Total
|
$ |
661,300
|
||
15.
|
Income Taxes
|
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Income Before Provision (Benefit) for Taxes
|
|
|
|
|
|
|
|
|
|
||||
U.S. Domestic Income
|
$ |
3,547,292
|
$ |
3,308,202
|
$ |
3,956,339
|
|||||||
Foreign Income
|
270,723
|
204,739
|
161,750
|
||||||||||
|
$ |
3,818,015
|
$ |
3,512,941
|
$ |
4,118,089
|
|||||||
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Current
|
|
|
|
|
|
|
|
|
|
||||
Federal Income Tax
|
$ |
74,611
|
$ |
73,525
|
$ |
31,457
|
|||||||
Foreign Income Tax
|
38,098
|
42,128
|
36,083
|
||||||||||
State and Local Income Tax
|
19,267
|
53,961
|
40,507
|
||||||||||
|
131,976
|
169,614
|
108,047
|
||||||||||
Deferred
|
|
|
|
|
|
|
|
|
|
||||
Federal Income Tax
|
(222,790
|
) |
59,924
|
613,518
|
|||||||||
Foreign Income Tax
|
312
|
(2,518
|
) |
(34
|
) | ||||||||
State and Local Income Tax
|
42,550
|
22,370
|
21,616
|
||||||||||
|
(179,928
|
) |
79,776
|
635,100
|
|||||||||
Provision (Benefit) for Taxes
|
$ |
(47,952
|
) | $ |
249,390
|
$ |
743,147
|
||||||
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Income Before Provision (Benefit) for Taxes
|
$ |
3,818,015
|
$ |
3,512,941
|
$ |
4,118,089
|
|||||||
Provision (Benefit) for Taxes
|
$ |
(47,952
|
) | $ |
249,390
|
$ |
743,147
|
||||||
Effective Income Tax Rate
|
-1.3
|
% |
7.1
|
% |
18.0
|
% |
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|||||||||||
|
Year Ended December 31,
|
vs.
|
|
vs.
|
|
||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|||||||||||
Statutory U.S. Federal Income Tax Rate
|
21.0
|
% |
21.0
|
% |
35.0
|
% |
—
|
-14.0
|
% | ||||||||||||
Income Passed Through to Common Shareholders and
Non-Controlling
Interest Holders (a)
|
-13.5
|
% |
-15.5
|
% |
-25.9
|
% |
2.0
|
% |
10.4
|
% | |||||||||||
State and Local Income Taxes
|
1.6
|
% |
1.8
|
% |
1.5
|
% |
-0.2
|
% |
0.3
|
% | |||||||||||
Equity-Based Compensation
|
—
|
—
|
-0.1
|
% |
—
|
0.1
|
% | ||||||||||||||
Change to a Taxable Corporation
|
-10.3
|
% |
—
|
—
|
-10.3
|
% |
—
|
||||||||||||||
Impact of the Tax Reform Bill
|
—
|
—
|
8.3
|
% |
—
|
-8.3
|
% | ||||||||||||||
Change in Valuation Allowance (b)
|
-0.8
|
% |
—
|
—
|
-0.8
|
% |
—
|
||||||||||||||
Other
|
0.7
|
% |
-0.2
|
% |
-0.8
|
% |
0.9
|
% |
0.6
|
% | |||||||||||
Effective Income Tax Rate
|
-1.3
|
% |
7.1
|
% |
18.0
|
% |
-8.4
|
% |
-10.9
|
% | |||||||||||
(a) |
Includes income that was not taxable to Blackstone and its subsidiaries. Such income was directly taxable to the common unitholders for the period prior to the Conversion and remains taxable to Blackstone’s non-controlling interest holders.
|
(b)
|
The Change in Valuation Allowance for the year ended December 31, 2019 represents the change from July 1, 2019 to December 31, 2019, following the change to a taxable corporation.
|
|
December 31,
|
||||||||
|
2019
|
|
2018
|
|
|||||
Deferred Tax Assets
|
|
|
|
|
|
|
|||
Fund Management Fees
|
$ |
—
|
$ |
6,955
|
|||||
Equity-Based Compensation
|
—
|
69,484
|
|||||||
Amortization and Depreciation
|
—
|
768,984
|
|||||||
Investment Basis Differences/Net Unrealized Gains and Losses
|
1,712,982
|
—
|
|||||||
Other
|
5,342
|
—
|
|||||||
Total Deferred Tax Assets Before Valuation Allowance
|
1,718,324
|
845,423
|
|||||||
Valuation Allowance
|
(629,019
|
) |
—
|
||||||
Total Net Deferred Tax Assets
|
1,089,305
|
845,423
|
|||||||
Deferred Tax Liabilities
|
|
|
|
|
|
|
|||
Investment Basis Differences/Net Unrealized Gains and Losses
|
20,267
|
71,472
|
|||||||
Other
|
—
|
34,469
|
|||||||
Total Deferred Tax Liabilities
|
20,267
|
105,941
|
|||||||
|
|||||||||
Net Deferred Tax Asset
s
|
$ |
1,069,038
|
$ |
739,482
|
|||||
|
December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Unrecognized Tax Benefits — January 1
|
$ |
20,864
|
$ |
11,454
|
$ |
3,581
|
|||||||
Additions for Tax Positions of Prior Years
|
4,908
|
9,671
|
11,167
|
||||||||||
Reductions for Tax Positions of Prior Years
|
—
|
(323
|
) |
(1,860
|
) | ||||||||
Settlements
|
(829
|
) |
—
|
(1,382
|
) | ||||||||
Exchange Rate Fluctuations
|
15
|
62
|
(52
|
) | |||||||||
Unrecognized Tax Benefits — December 31
|
$ |
24,958
|
$ |
20,864
|
$ |
11,454
|
|||||||
16.
|
Earnings Per Share and Stockholder’s Equity
|
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Net Income for Per Share of Class A Common Stock Calculations
|
|
|
|
|
|
|
|
|
|
||||
Net Income Attributable to The Blackstone Group Inc., Basic
|
$ |
2,049,682
|
$ |
1,541,788
|
$ |
1,471,374
|
|||||||
Incremental Net Income from Assumed Exchange of Blackstone Holdings Partnership Units
|
—
|
1,185,799
|
—
|
||||||||||
Net Income Attributable to The Blackstone Group Inc., Diluted
|
$ |
2,049,682
|
$ |
2,727,587
|
$ |
1,471,374
|
|||||||
Shares/Units Outstanding
|
|
|
|
|
|
|
|
|
|
||||
Weighted-Average Shares of Class A Common Stock Outstanding, Basic
|
675,900,466
|
678,850,245
|
665,453,198
|
||||||||||
Weighted-Average Shares of Unvested Deferred Restricted Class A Common Stock
|
267,385
|
226,487
|
793,648
|
||||||||||
Weighted-Average Blackstone Holdings Partnership Units
|
—
|
527,886,114
|
—
|
||||||||||
Weighted-Average Shares of Class A Common Stock Outstanding, Diluted
|
676,167,851
|
1,206,962,846
|
666,246,846
|
||||||||||
Net Income Per Share of Class A Common Stock
|
|
|
|
||||||||||
Basic
|
$ |
3.03
|
$ |
2.27
|
$ |
2.21
|
|||||||
Diluted
|
$ |
3.03
|
$ |
2.26
|
$ |
2.21
|
|||||||
Dividends Declared Per Share of Class A Common Stock (a)
|
$ |
1.92
|
$ |
2.42
|
$ |
2.32
|
|||||||
(a) | Dividends declared reflects the calendar date of the declaration for each distribution. The fourth quarter dividends, if any, for any fiscal year will be declared and paid in the subsequent fiscal year. |
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Weighted-Average Blackstone Holdings Partnership Units
|
524,211,887
|
—
|
533,982,613
|
|
Shares/Units
|
|
|||
Class A Common Stock Outstanding
|
671,157,692
|
||||
Unvested Participating Common Stock
|
9,299,732
|
||||
Total Participating Common Stock
|
680,457,424
|
||||
Participating Blackstone Holdings Partnership Units
|
515,973,657
|
||||
|
1,196,431,081
|
||||
|
Blackstone Holdings
|
The Blackstone Group Inc.
|
|||||||||||||||||||||||
|
|
|
|
|
Equity Settled Awards
|
Cash Settled Awards
|
|||||||||||||||||||
Unvested Shares/Units
|
Partnership
Units |
|
Weighted-
Average Grant Date Fair Value |
|
Deferred
Restricted
Shares
Class A
Common
Stock
|
|
Weighted-
Average Grant Date Fair Value |
|
Phantom
Shares |
|
Weighted-
Average Grant Date Fair Value |
|
|||||||||||||
Balance, December 31, 2018
|
31,554,127
|
$ |
34.38
|
9,312,268
|
$ |
31.43
|
46,808
|
$ |
34.66
|
||||||||||||||||
Granted
|
9,094,157
|
43.57
|
3,639,947
|
38.80
|
20,355
|
50.71
|
|||||||||||||||||||
Vested
|
(6,893,962
|
) |
35.68
|
(3,272,213
|
) |
31.18
|
(11,035
|
) |
48.59
|
||||||||||||||||
Forfeited
|
(1,595,104
|
) |
31.77
|
(710,266
|
) |
22.60
|
(4,787
|
) |
47.95
|
||||||||||||||||
Balance, December 31, 2019
|
32,159,218
|
$ |
36.25
|
8,969,736
|
$ |
35.26
|
51,341
|
$ |
52.85
|
||||||||||||||||
|
Shares/Units
|
|
Weighted-Average
Service Period in Years |
|
|||||
Blackstone Holdings Partnership Units
|
25,800,455
|
3.2
|
|||||||
Deferred Restricted Shares of Class A Common Stock
|
7,465,122
|
2.2
|
|||||||
Total Equity-Based Awards
|
33,265,577
|
2.9
|
|||||||
Phantom Shares
|
39,155
|
2.9
|
|||||||
|
|
||||||||
|
|
December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
||||
Due from Affiliates
|
|
|
|
|
|
|
|
|
|
Management Fees, Performance Revenues, Reimbursable Expenses and Other Receivables from
Non-Consolidated
Entities and Portfolio Companies
|
|
$
|
1,999,568
|
|
|
$
|
1,520,100
|
|
|
Due from Certain
Non-Controlling
Interest Holders and Blackstone Employees
|
|
|
573,679
|
|
|
|
462,475
|
|
|
Accrual for Potential Clawback of Previously Distributed Performance Allocations
|
|
|
21,626
|
|
|
|
11,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,594,873
|
|
|
$
|
1,994,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
December 31,
|
|||||||
|
|
2019
|
|
2018
|
|
||||
Due to Affiliates
|
|
|
|
|
|
|
|
|
|
Due to Certain
Non-Controlling
Interest Holders in Connection with the Tax Receivable Agreements
|
|
$
|
672,981
|
|
|
$
|
796,902
|
|
|
Due to
Non-Consolidated
Entities
|
|
|
100,286
|
|
|
|
99,728
|
|
|
Due to Note-Holders of Consolidated CLO Vehicles
|
|
|
78,252
|
|
|
|
56,012
|
|
|
Due to Certain
Non-Controlling
Interest Holders and Blackstone Employees
|
|
|
48,433
|
|
|
|
53,613
|
|
|
Accrual for Potential Repayment of Previously Received Performance Allocations
|
|
|
126,919
|
|
|
|
29,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,026,871
|
|
|
$
|
1,035,776
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||||||||||||||||||||
|
2019
|
2018
|
|||||||||||||||||||||||
Segment
|
Blackstone
Holdings |
|
Current and
Former Personnel (a) |
|
Total
|
|
Blackstone
Holdings |
|
Current and
Former Personnel (a) |
|
Total
|
|
|||||||||||||
Real Estate
|
$ |
16,151
|
$ |
10,597
|
$ |
26,748
|
$ |
15,770
|
$ |
10,053
|
$ |
25,823
|
|||||||||||||
Private Equity
|
82,276
|
2,860
|
85,136
|
13,296
|
(12,448
|
) |
848
|
||||||||||||||||||
Credit
|
6,866
|
8,169
|
15,035
|
1,355
|
1,495
|
2,850
|
|||||||||||||||||||
|
$ |
105,293
|
$ |
21,626
|
$ |
126,919
|
$ |
30,421
|
$ |
(900
|
) | $ |
29,521
|
||||||||||||
(a) | The split of clawback between Blackstone Holdings and Current and Former Personnel is based on the performance of individual investments held by a fund rather than on a fund by fund basis. |
• |
Real Estate – Blackstone’s Real Estate segment primarily comprises its management of global, Europe and Asia-focused opportunistic real estate funds, high-yield and high-grade real estate debt funds, liquid real estate debt funds, core+ real estate funds which also include a
non-exchange
traded REIT and a NYSE-listed REIT.
|
• |
Private Equity – Blackstone’s Private Equity segment includes
its management of flagship corporate private equity funds, sector and geographically-focused corporate private equity funds, including energy and Asia-focused funds, a core private equity fund, an opportunistic investment platform, a secondary fund of funds business, infrastructure-focused funds, a life sciences private investment platform, a multi-asset investment program for eligible high net worth investors and a capital markets services business.
|
• |
Hedge Fund Solutions – The largest component of Blackstone’s Hedge Fund Solutions segment is Blackstone Alternative Asset Management, which manages a broad range of commingled and customized hedge fund of fund solutions. The segment also includes investment platforms that seed new hedge fund businesses, purchase minority interests in more established general partners and management companies of funds, invest in special situation opportunities, create
alternative solutions in the form of daily liquidity products and invest directly.
|
• |
Credit – Blackstone’s Credit segment consists principally of GSO Capital Partners LP, which is organized into three overarching strategies: performing credit strategies (which include mezzanine lending funds, middle market direct lending funds, including our business development company and other performing credit strategy funds), distressed strategies (which include credit alpha strategies, stressed/distressed funds and energy strategies) and long only strategies (which consist of CLOs, closed
-
ended funds, open
-
ended funds and separately managed accounts). In addition, the segment includes a publicly traded master limited partnership investment platform, Harvest, and our insurer-focused platform, Blackstone Insurance Solutions.
|
|
December 31, 2019 and the Year Then Ended
|
||||||||||||||||||||
|
Real
Estate
|
|
Private Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Total Segments
|
|
|||||||||||
Management and Advisory Fees, Net
|
|
|
|
|
|
||||||||||||||||
Base Management Fees
|
$ |
1,116,183
|
$ |
986,482
|
$ |
556,730
|
$ |
586,535
|
$ |
3,245,930
|
|||||||||||
Transaction, Advisory and Other Fees, Net
|
175,831
|
115,174
|
3,533
|
19,882
|
314,420
|
||||||||||||||||
Management Fee Offsets
|
(26,836
|
) |
(37,327
|
) |
(138
|
) |
(11,813
|
) |
(76,114
|
) | |||||||||||
Total Management and Advisory Fees, Net
|
1,265,178
|
1,064,329
|
560,125
|
594,604
|
3,484,236
|
||||||||||||||||
Fee Related Performance Revenues
|
198,237
|
—
|
—
|
13,764
|
212,001
|
||||||||||||||||
Fee Related Compensation
|
(531,259
|
) |
(423,752
|
) |
(151,960
|
) |
(229,607
|
) |
(1,336,578
|
) | |||||||||||
Other Operating Expenses
|
(168,332
|
) |
(160,010
|
) |
(81,999
|
) |
(160,801
|
) |
(571,142
|
) | |||||||||||
Fee Related Earnings
|
763,824
|
480,567
|
326,166
|
217,960
|
1,788,517
|
||||||||||||||||
Realized Performance Revenues
|
1,032,337
|
468,992
|
126,576
|
32,737
|
1,660,642
|
||||||||||||||||
Realized Performance Compensation
|
(374,096
|
) |
(192,566
|
) |
(24,301
|
) |
(12,972
|
) |
(603,935
|
) | |||||||||||
Realized Principal Investment Income
|
79,733
|
90,249
|
21,707
|
32,466
|
224,155
|
||||||||||||||||
Total Net Realizations
|
737,974
|
366,675
|
123,982
|
52,231
|
1,280,862
|
||||||||||||||||
Total Segment Distributable Earnings
|
$ |
1,501,798
|
$ |
847,242
|
$ |
450,148
|
$ |
270,191
|
$ |
3,069,379
|
|||||||||||
Segment Assets
|
$
|
9,023,353
|
$
|
9,007,658
|
$
|
2,238,048
|
$
|
4,009,354
|
$
|
24,278,413
|
|||||||||||
|
|
|
|
|
|||||||||||||||||
|
|
December 31, 2018 and the Year Then Ended
|
|||||||||||||||||||
|
|
Real
Estate
|
|
Private Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Total Segments
|
|
||||||||||
Management and Advisory Fees, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Management Fees
|
|
$
|
985,399
|
|
|
$
|
785,223
|
|
|
$
|
519,782
|
|
|
$
|
553,921
|
|
|
$
|
2,844,325
|
|
|
Transaction, Advisory and Other Fees, Net
|
|
|
152,513
|
|
|
|
58,165
|
|
|
|
3,180
|
|
|
|
15,640
|
|
|
|
229,498
|
|
|
Management Fee Offsets
|
|
|
(11,442
|
)
|
|
|
(13,504
|
)
|
|
|
(93
|
)
|
|
|
(12,332
|
)
|
|
|
(37,371
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net
|
|
|
1,126,470
|
|
|
|
829,884
|
|
|
|
522,869
|
|
|
|
557,229
|
|
|
|
3,036,452
|
|
|
Fee Related Performance Revenues
|
|
|
124,502
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(666
|
)
|
|
|
123,836
|
|
|
Fee Related Compensation
|
|
|
(459,430
|
)
|
|
|
(375,446
|
)
|
|
|
(162,172
|
)
|
|
|
(219,098
|
)
|
|
|
(1,216,146
|
)
|
|
Other Operating Expenses
|
|
|
(146,260
|
)
|
|
|
(133,096
|
)
|
|
|
(77,772
|
)
|
|
|
(131,200
|
)
|
|
|
(488,328
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee Related Earnings
|
|
|
645,282
|
|
|
|
321,342
|
|
|
|
282,925
|
|
|
|
206,265
|
|
|
|
1,455,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues
|
|
|
914,984
|
|
|
|
757,406
|
|
|
|
42,419
|
|
|
|
96,962
|
|
|
|
1,811,771
|
|
|
Realized Performance Compensation
|
|
|
(284,319
|
)
|
|
|
(318,167
|
)
|
|
|
(21,792
|
)
|
|
|
(53,863
|
)
|
|
|
(678,141
|
)
|
|
Realized Principal Investment Income
|
|
|
92,525
|
|
|
|
109,731
|
|
|
|
17,039
|
|
|
|
16,763
|
|
|
|
236,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Realizations
|
|
|
723,190
|
|
|
|
548,970
|
|
|
|
37,666
|
|
|
|
59,862
|
|
|
|
1,369,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Distributable Earnings
|
|
$
|
1,368,472
|
|
|
$
|
870,312
|
|
|
$
|
320,591
|
|
|
$
|
266,127
|
|
|
$
|
2,825,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Assets
|
|
$
|
7,521,117
|
|
|
$
|
7,548,544
|
|
|
$
|
1,976,809
|
|
|
$
|
3,592,356
|
|
|
$
|
20,638,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
Year Ended December 31, 2017
|
|||||||||||||||||||
|
|
Real
Estate
|
|
Private Equity
|
|
Hedge Fund
Solutions |
|
Credit
|
|
Total Segments
|
|
||||||||||
Management and Advisory Fees, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Management Fees
|
|
$
|
872,191
|
|
|
$
|
724,818
|
|
|
$
|
516,048
|
|
|
$
|
567,334
|
|
|
$
|
2,680,391
|
|
|
Transaction, Advisory and Other Fees, Net
|
|
|
82,781
|
|
|
|
57,624
|
|
|
|
2,980
|
|
|
|
13,431
|
|
|
|
156,816
|
|
|
Management Fee Offsets
|
|
|
(15,934
|
)
|
|
|
(18,007
|
)
|
|
|
(93
|
)
|
|
|
(32,382
|
)
|
|
|
(66,416
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Management and Advisory Fees, Net
|
|
|
939,038
|
|
|
|
764,435
|
|
|
|
518,935
|
|
|
|
548,383
|
|
|
|
2,770,791
|
|
|
Fee Related Performance Revenues
|
|
|
79,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
89,945
|
|
|
|
169,445
|
|
|
Fee Related Compensation
|
|
|
(437,311
|
)
|
|
|
(347,562
|
)
|
|
|
(146,924
|
)
|
|
|
(253,842
|
)
|
|
|
(1,185,639
|
)
|
|
Other Operating Expenses
|
|
|
(136,042
|
)
|
|
|
(120,997
|
)
|
|
|
(68,265
|
)
|
|
|
(99,562
|
)
|
|
|
(424,866
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee Related Earnings
|
|
|
445,185
|
|
|
|
295,876
|
|
|
|
303,746
|
|
|
|
284,924
|
|
|
|
1,329,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Performance Revenues
|
|
|
2,141,374
|
|
|
|
1,157,188
|
|
|
|
154,343
|
|
|
|
194,902
|
|
|
|
3,647,807
|
|
|
Realized Performance Compensation
|
|
|
(751,526
|
)
|
|
|
(404,544
|
)
|
|
|
(40,707
|
)
|
|
|
(100,834
|
)
|
|
|
(1,297,611
|
)
|
|
Realized Principal Investment Income
|
|
|
255,903
|
|
|
|
154,837
|
|
|
|
9,074
|
|
|
|
16,380
|
|
|
|
436,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Net Realizations
|
|
|
1,645,751
|
|
|
|
907,481
|
|
|
|
122,710
|
|
|
|
110,448
|
|
|
|
2,786,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Distributable Earnings
|
|
$
|
2,090,936
|
|
|
$
|
1,203,357
|
|
|
$
|
426,456
|
|
|
$
|
395,372
|
|
|
$
|
4,116,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP Revenues
|
|
$
|
7,338,270
|
|
|
$
|
6,833,259
|
|
|
$
|
7,145,015
|
|
|
Less: Unrealized Performance Allocations (a)
|
|
|
(1,126,668
|
)
|
|
|
(561,163
|
)
|
|
|
105,432
|
|
|
Less: Unrealized Principal Investment (Income) Loss (b)
|
|
|
(113,327
|
)
|
|
|
65,851
|
|
|
|
131,206
|
|
|
Less: Interest and Dividend Revenue (c)
|
|
|
(192,593
|
)
|
|
|
(181,763
|
)
|
|
|
(142,920
|
)
|
|
Less: Other Revenue (d)
|
|
|
(79,447
|
)
|
|
|
(89,468
|
)
|
|
|
140,051
|
|
|
Impact of Consolidation (e)
|
|
|
(88,164
|
)
|
|
|
(277,406
|
)
|
|
|
(322,729
|
)
|
|
Amortization of Intangibles (f)
|
|
|
1,548
|
|
|
|
1,548
|
|
|
|
1,548
|
|
|
Transaction-Related Charges (g)
|
|
|
(168,170
|
)
|
|
|
(588,710
|
)
|
|
|
(40,153
|
)
|
|
Intersegment Eliminations
|
|
|
9,585
|
|
|
|
5,969
|
|
|
|
6,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Revenue (h)
|
|
$
|
5,581,034
|
|
|
$
|
5,208,117
|
|
|
$
|
7,024,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP Expenses
|
|
$
|
3,964,651
|
|
|
$
|
3,512,040
|
|
|
$
|
3,752,378
|
|
|
Less: Unrealized Performance Allocations Compensation (i)
|
|
|
(540,285
|
)
|
|
|
(319,742
|
)
|
|
|
(103,794
|
)
|
|
Less: Equity-Based Compensation (j)
|
|
|
(230,194
|
)
|
|
|
(158,220
|
)
|
|
|
(107,110
|
)
|
|
Less: Interest Expense (k)
|
|
|
(195,034
|
)
|
|
|
(159,838
|
)
|
|
|
(192,838
|
)
|
|
Impact of Consolidation (e)
|
|
|
(55,902
|
)
|
|
|
(112,354
|
)
|
|
|
(133,081
|
)
|
|
Amortization of Intangibles (f)
|
|
|
(64,383
|
)
|
|
|
(58,446
|
)
|
|
|
(46,749
|
)
|
|
Transaction-Related Charges (g)
|
|
|
(376,783
|
)
|
|
|
(326,794
|
)
|
|
|
(267,477
|
)
|
|
Intersegment Eliminations
|
|
|
9,585
|
|
|
|
5,969
|
|
|
|
6,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Expenses (l)
|
|
$
|
2,511,655
|
|
|
$
|
2,382,615
|
|
|
$
|
2,908,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Other Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total GAAP Other Income
|
|
$
|
444,396
|
|
|
$
|
191,722
|
|
|
$
|
725,452
|
|
|
Impact of Consolidation (e)
|
|
|
(444,396
|
)
|
|
|
(191,722
|
)
|
|
|
(321,597
|
)
|
|
Transaction-Related Charges (g)
|
|
|
—
|
|
|
|
—
|
|
|
|
(403,855
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Other Income
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
|||||||
Income Before Provision (Benefit) for Taxes
|
|
|
|
|
|
|
|
|
|
||||
Total GAAP Income Before Provision (Benefit) for Taxes
|
$ |
3,818,015
|
$ |
3,512,941
|
$ |
4,118,089
|
|||||||
Less: Unrealized Performance Allocations (a)
|
(1,126,668
|
) |
(561,163
|
) |
105,432
|
||||||||
Less: Unrealized Principal Investment (Income) Loss (b)
|
(113,327
|
) |
65,851
|
131,206
|
|||||||||
Less: Interest and Dividend Revenue (c)
|
(192,593
|
) |
(181,763
|
) |
(142,920
|
) | |||||||
Less: Other Revenue (d)
|
(79,447
|
) |
(89,468
|
) |
140,051
|
||||||||
Plus: Unrealized Performance Allocations Compensation (i)
|
540,285
|
319,742
|
103,794
|
||||||||||
Plus: Equity-Based Compensation (j)
|
230,194
|
158,220
|
107,110
|
||||||||||
Plus: Interest Expense (k)
|
195,034
|
159,838
|
192,838
|
||||||||||
Impact of Consolidation (e)
|
(476,658
|
) |
(356,774
|
) |
(511,245
|
) | |||||||
Amortization of Intangibles (f)
|
65,931
|
59,994
|
48,297
|
||||||||||
Transaction-Related Charges (g)
|
208,613
|
(261,916
|
) |
(176,531
|
) | ||||||||
Total Segment Distributable Earnings
|
$ |
3,069,379
|
$ |
2,825,502
|
$ |
4,116,121
|
|||||||
|
|
|
As of December 31,
|
||||||||||
|
|
|
2019
|
|
2018
|
|
|||||||
Total Assets
|
|
|
|
|
|
|
|
|
|
|
|||
Total GAAP Assets
|
|
|
|
|
$ |
32,585,506
|
$ |
28,924,650
|
|||||
Impact of Consolidation (e)
|
|
|
|
|
(8,307,093
|
) |
(8,285,824
|
) | |||||
|
|
|
|
||||||||||
Total Segment Assets
|
|
|
|
|
$
|
24,278,413
|
$
|
20,638,826
|
|||||
|
|
|
|
(a) | This adjustment removes Unrealized Performance Revenues on a segment basis. |
(b) | This adjustment removes Unrealized Principal Investment Income (Loss) on a segment basis. |
(c) | This adjustment removes Interest and Dividend Revenue on a segment basis. |
(d) |
This adjustment removes Other Revenue on a segment basis.
For the years ended December 31, 2019, 2018 and 2017, Other Revenue on a GAAP basis was $80.0 million, $672.3 million and $(133.2) million and included $76.4 million, $87.4 million and $(146.5) million of foreign exchange gains (losses), respectively.
|
(e) |
This adjustment reverses the effect of consolidating Blackstone Funds, which are excluded from Blackstone’s segment presentation. This adjustment includes the elimination of Blackstone’s interest in these funds, the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures, and the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by
non-controlling
interests.
|
(f) | This adjustment removes the amortization of transaction-related intangibles, which are excluded from Blackstone’s segment presentation. This amount includes amortization of intangibles associated with Blackstone’s investment in Pátria, which is accounted for under the equity method. |
(g) | This adjustment removes Transaction-Related Charges, which are excluded from Blackstone’s segment presentation. Transaction-Related Charges arise from corporate actions including acquisitions, divestitures, and Blackstone’s initial public offering. They consist primarily of equity-based compensation charges, gains and losses on contingent consideration arrangements, changes in the balance of the Tax Receivable Agreement resulting from a change in tax law or similar event, transaction costs and any gains or losses associated with these corporate actions. |
(h)
|
Total Segment Revenues is comprised of the following:
|
|
|
|
|||||||||||
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Total Segment Management and Advisory Fees, Net
|
|
$
|
3,484,236
|
|
|
$
|
3,036,452
|
|
|
$
|
2,770,791
|
|
|
Total Segment Fee Related Performance Revenues
|
|
|
212,001
|
|
|
|
123,836
|
|
|
|
169,445
|
|
|
Total Segment Realized Performance Revenues
|
|
|
1,660,642
|
|
|
|
1,811,771
|
|
|
|
3,647,807
|
|
|
Total Segment Realized Principal Investment Income
|
|
|
224,155
|
|
|
|
236,058
|
|
|
|
436,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Revenues
|
|
$
|
5,581,034
|
|
|
$
|
5,208,117
|
|
|
$
|
7,024,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
This adjustment removes Unrealized Performance Allocations Compensation.
|
(j)
|
This adjustment removes Equity-Based Compensation on a segment basis.
|
(k)
|
This adjustment removes Interest Expense, excluding interest expense related to the Tax Receivable Agreement.
|
(l)
|
Total Segment Expenses is comprised of the following:
|
|
|
|
|||||||||||
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Total Segment Fee Related Compensation
|
|
$
|
1,336,578
|
|
|
$
|
1,216,146
|
|
|
$
|
1,185,639
|
|
|
Total Segment Realized Performance Compensation
|
|
|
603,935
|
|
|
|
678,141
|
|
|
|
1,297,611
|
|
|
Total Segment Other Operating Expenses
|
|
|
571,142
|
|
|
|
488,328
|
|
|
|
424,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment Expenses
|
|
$
|
2,511,655
|
|
|
$
|
2,382,615
|
|
|
$
|
2,908,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Management and Advisory Fees, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
3,472,155
|
|
|
$
|
3,027,796
|
|
|
$
|
2,751,322
|
|
|
Segment Adjustment (a)
|
|
|
12,081
|
|
|
|
8,656
|
|
|
|
19,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
|
|
$
|
3,484,236
|
|
|
$
|
3,036,452
|
|
|
$
|
2,770,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
GAAP Realized Performance Revenues to Total Segment Fee Related Performance Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Fees
|
|
$
|
129,911
|
|
|
$
|
57,540
|
|
|
$
|
242,514
|
|
|
Investment Income — Realized Performance Allocations
|
|
|
1,739,000
|
|
|
|
1,876,507
|
|
|
|
3,571,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
1,868,911
|
|
|
|
1,934,047
|
|
|
|
3,814,325
|
|
|
Total Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Realized Performance Revenues
|
|
|
(1,660,642
|
)
|
|
|
(1,811,771
|
)
|
|
|
(3,647,807
|
)
|
|
Segment Adjustment (b)
|
|
|
3,732
|
|
|
|
1,560
|
|
|
|
2,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
|
|
$
|
212,001
|
|
|
$
|
123,836
|
|
|
$
|
169,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
GAAP Compensation to Total Segment Fee Related Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation
|
|
$
|
1,820,330
|
|
|
$
|
1,609,957
|
|
|
$
|
1,442,485
|
|
|
Incentive Fee Compensation
|
|
|
44,300
|
|
|
|
33,916
|
|
|
|
105,279
|
|
|
Realized Performance Allocations Compensation
|
|
|
662,942
|
|
|
|
711,076
|
|
|
|
1,281,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
2,527,572
|
|
|
|
2,354,949
|
|
|
|
2,829,729
|
|
|
Total Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Realized Performance Compensation
|
|
|
(603,935
|
)
|
|
|
(678,141
|
)
|
|
|
(1,297,611
|
)
|
|
Less: Equity-Based Compensation — Operating Compensation
|
|
|
(221,684
|
)
|
|
|
(145,213
|
)
|
|
|
(93,410
|
)
|
|
Less: Equity-Based Compensation — Performance Compensation
|
|
|
(8,510
|
)
|
|
|
(13,007
|
)
|
|
|
(13,700
|
)
|
|
Segment Adjustment (c)
|
|
|
(356,865
|
)
|
|
|
(302,442
|
)
|
|
|
(239,369
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
|
|
$
|
1,336,578
|
|
|
$
|
1,216,146
|
|
|
$
|
1,185,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
GAAP General, Administrative and Other to Total Segment Other Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
679,408
|
|
|
$
|
594,873
|
|
|
$
|
488,582
|
|
|
Segment Adjustment (d)
|
|
|
(108,266
|
)
|
|
|
(106,545
|
)
|
|
|
(63,716
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
|
|
$
|
571,142
|
|
|
$
|
488,328
|
|
|
$
|
424,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Realized Performance Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Fees
|
|
$
|
129,911
|
|
|
$
|
57,540
|
|
|
$
|
242,514
|
|
|
Investment Income — Realized Performance Allocations
|
|
|
1,739,000
|
|
|
|
1,876,507
|
|
|
|
3,571,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
1,868,911
|
|
|
|
1,934,047
|
|
|
|
3,814,325
|
|
|
Total Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Fee Related Performance Revenues
|
|
|
(212,001
|
)
|
|
|
(123,836
|
)
|
|
|
(169,445
|
)
|
|
Segment Adjustment (b)
|
|
|
3,732
|
|
|
|
1,560
|
|
|
|
2,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
|
|
$
|
1,660,642
|
|
|
$
|
1,811,771
|
|
|
$
|
3,647,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Realized Performance Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Fee Compensation
|
|
$
|
44,300
|
|
|
$
|
33,916
|
|
|
$
|
105,279
|
|
|
Realized Performance Allocations Compensation
|
|
|
662,942
|
|
|
|
711,076
|
|
|
|
1,281,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
707,242
|
|
|
|
744,992
|
|
|
|
1,387,244
|
|
|
Total Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Fee Related Performance Compensation
|
|
|
(94,797
|
)
|
|
|
(53,844
|
)
|
|
|
(75,933
|
)
|
|
Less: Equity-Based Compensation — Performance Compensation
|
|
|
(8,510
|
)
|
|
|
(13,007
|
)
|
|
|
(13,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
|
|
$
|
603,935
|
|
|
$
|
678,141
|
|
|
$
|
1,297,611
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Year Ended December 31,
|
|||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
Realized Principal Investment Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
393,478
|
|
|
$
|
415,862
|
|
|
$
|
635,769
|
|
|
Segment Adjustment (e)
|
|
|
(169,323
|
)
|
|
|
(179,804
|
)
|
|
|
(199,575
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Segment
|
|
$
|
224,155
|
|
|
$
|
236,058
|
|
|
$
|
436,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents (1) the add back of net management fees earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of revenue from the reimbursement of certain expenses by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures.
|
(b)
|
Represents the add back of Performance Revenues earned from consolidated Blackstone Funds which have been eliminated in consolidation.
|
(c)
|
Represents the removal of Transaction-Related Charges that are not recorded in the Total Segment measures.
|
(d)
|
Represents the removal of (1) the amortization of transaction-related intangibles, and (2) certain expenses reimbursed by the Blackstone Funds, which are presented gross under GAAP but netted against Management and Advisory Fees, Net in the Total Segment measures.
|
(e)
|
Represents (1) the add back of Principal Investment Income, including general partner income, earned from consolidated Blackstone Funds which have been eliminated in consolidation, and (2) the removal of amounts associated with the ownership of Blackstone consolidated operating partnerships held by
non-controlling
interests.
|
21.
|
Subsequent Events
|
22.
|
Quarterly Financial Data (Unaudited)
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended
|
|||||||||||||||
|
|
March 31,
2019 |
|
June 30,
2019
|
|
September 30,
2019 (a) |
|
December 31,
2019 |
|
||||||||
Revenues
|
|
$
|
2,024,871
|
|
|
$
|
1,486,806
|
|
|
$
|
1,735,113
|
|
|
$
|
2,091,480
|
|
|
Expenses
|
|
|
1,041,164
|
|
|
|
862,240
|
|
|
|
947,220
|
|
|
|
1,114,027
|
|
|
Other Income
|
|
|
130,325
|
|
|
|
61,131
|
|
|
|
223,056
|
|
|
|
29,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Provision (Benefit) for Taxes
|
|
$
|
1,114,032
|
|
|
$
|
685,697
|
|
|
$
|
1,010,949
|
|
|
$
|
1,007,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
1,072,877
|
|
|
$
|
646,961
|
|
|
$
|
1,167,735
|
|
|
$
|
978,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to The Blackstone Group Inc.
|
|
$
|
481,304
|
|
|
$
|
305,792
|
|
|
$
|
779,437
|
|
|
$
|
483,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share of Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.71
|
|
|
$
|
0.45
|
|
|
$
|
1.15
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.71
|
|
|
$
|
0.45
|
|
|
$
|
1.15
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared (b)
|
|
$
|
0.58
|
|
|
$
|
0.37
|
|
|
$
|
0.48
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Three Months Ended
|
|||||||||||||||
|
|
March 31,
2018 |
|
June 30,
2018 (c)
|
|
September 30,
2018 |
|
December 31,
2018 |
|
||||||||
Revenues
|
|
$
|
1,769,131
|
|
|
$
|
2,632,570
|
|
|
$
|
1,926,580
|
|
|
$
|
504,978
|
|
|
Expenses
|
|
|
982,931
|
|
|
|
1,016,381
|
|
|
|
1,017,632
|
|
|
|
495,096
|
|
|
Other Income (Loss)
|
|
|
110,599
|
|
|
|
73,519
|
|
|
|
66,838
|
|
|
|
(59,234
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Provision (Benefit) for Taxes
|
|
$
|
896,799
|
|
|
$
|
1,689,708
|
|
|
$
|
975,786
|
|
|
$
|
(49,352
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
842,304
|
|
|
$
|
1,550,977
|
|
|
$
|
948,988
|
|
|
$
|
(78,718
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Attributable to The Blackstone Group Inc.
|
|
$
|
367,872
|
|
|
$
|
742,042
|
|
|
$
|
442,742
|
|
|
$
|
(10,868
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Per Share of Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.55
|
|
|
$
|
1.09
|
|
|
$
|
0.65
|
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.53
|
|
|
$
|
1.09
|
|
|
$
|
0.64
|
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared (b)
|
|
$
|
0.85
|
|
|
$
|
0.35
|
|
|
$
|
0.58
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
As a result of the Conversion, there was a reduction of $174.6 million of the tax receivable agreement liability during the three months ended September 30, 2019. The reduction of the tax receivable agreement liability was included in Other Income.
|
(b)
|
Dividends declared reflects the calendar date of the declaration of each dividend.
|
(c)
|
For the three months ended June 30, 2018, Revenues included $580.9 million of Transaction-Related Charges recorded in Other Revenues received upon the conclusion of Blackstone’s investment
sub-advisory
relationship with FS Investments’ funds.
|
Item 8A.
|
Unaudited Supplemental Presentation of Statements of Financial Condition
|
|
December 31, 2019
|
||||||||||||||||
|
Consolidated
Operating Partnerships |
|
Consolidated
Blackstone Funds (a) |
|
Reclasses and
Eliminations |
|
Consolidated
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and Cash Equivalents
|
$ |
2,172,441
|
$ |
—
|
$ |
—
|
$ |
2,172,441
|
|||||||||
Cash Held by Blackstone Funds and Other
|
—
|
351,210
|
—
|
351,210
|
|||||||||||||
Investments
|
14,535,685
|
8,380,698
|
(634,701
|
) |
22,281,682
|
||||||||||||
Accounts Receivable
|
754,703
|
220,372
|
—
|
975,075
|
|||||||||||||
Due from Affiliates
|
2,606,563
|
8,818
|
(20,508
|
) |
2,594,873
|
||||||||||||
Intangible Assets, Net
|
397,508
|
—
|
—
|
397,508
|
|||||||||||||
Goodwill
|
1,869,860
|
—
|
—
|
1,869,860
|
|||||||||||||
Other Assets
|
381,289
|
1,204
|
—
|
382,493
|
|||||||||||||
Right-of-Use
Assets
|
471,059
|
—
|
—
|
471,059
|
|||||||||||||
Deferred Tax Assets
|
1,089,305
|
—
|
—
|
1,089,305
|
|||||||||||||
Total Assets
|
$ |
24,278,413
|
$ |
8,962,302
|
$ |
(655,209
|
) | $ |
32,585,506
|
||||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans Payable
|
$ |
4,600,856
|
$ |
6,479,867
|
$ |
—
|
$ |
11,080,723
|
|||||||||
Due to Affiliates
|
885,655
|
509,681
|
(368,465
|
) |
1,026,871
|
||||||||||||
Accrued Compensation and Benefits
|
3,796,044
|
—
|
—
|
3,796,044
|
|||||||||||||
Securities Sold, Not Yet Purchased
|
20,256
|
55,289
|
—
|
75,545
|
|||||||||||||
Repurchase Agreements
|
—
|
154,118
|
—
|
154,118
|
|||||||||||||
Operating Lease Liabilities
|
542,994
|
—
|
—
|
542,994
|
|||||||||||||
Accounts Payable, Accrued Expenses and Other Liabilities
|
504,804
|
301,355
|
—
|
806,159
|
|||||||||||||
Total Liabilities
|
10,350,609
|
7,500,310
|
(368,465
|
) |
17,482,454
|
||||||||||||
Redeemable
Non-Controlling
Interests in Consolidated Entities
|
22,002
|
65,649
|
—
|
87,651
|
|||||||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Class A Common Stock
|
7
|
—
|
—
|
7
|
|||||||||||||
Class B Common Stock
|
—
|
—
|
—
|
—
|
|||||||||||||
Class C Common Stock
|
—
|
—
|
—
|
—
|
|||||||||||||
Additional
Paid-in-Capital
|
6,428,647
|
283,339
|
(283,339
|
) |
6,428,647
|
||||||||||||
Retained Earnings
|
609,625
|
3,405
|
(3,405
|
) |
609,625
|
||||||||||||
Accumulated Other Comprehensive Loss
|
(28,495
|
) |
—
|
—
|
(28,495
|
) | |||||||||||
Non-Controlling
Interests in Consolidated Entities
|
3,076,470
|
1,109,599
|
—
|
4,186,069
|
|||||||||||||
Non-Controlling
Interests in Blackstone Holdings
|
3,819,548
|
—
|
—
|
3,819,548
|
|||||||||||||
Total Equity
|
13,905,802
|
1,396,343
|
(286,744
|
) |
15,015,401
|
||||||||||||
Total Liabilities and Equity
|
$ |
24,278,413
|
$ |
8,962,302
|
$ |
(655,209
|
) | $ |
32,585,506
|
||||||||
|
December 31, 2018
|
||||||||||||||||
|
Consolidated
Operating Partnerships |
|
Consolidated
Blackstone Funds (a) |
|
Reclasses and
Eliminations |
|
Consolidated
|
|
|||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and Cash Equivalents
|
$ |
2,207,841
|
$ |
—
|
$ |
—
|
$ |
2,207,841
|
|||||||||
Cash Held by Blackstone Funds and Other
|
—
|
337,320
|
—
|
337,320
|
|||||||||||||
Investments
|
12,596,138
|
8,376,338
|
(595,445
|
) |
20,377,031
|
||||||||||||
Accounts Receivable
|
455,308
|
180,930
|
—
|
636,238
|
|||||||||||||
Due from Affiliates
|
2,011,324
|
7,405
|
(24,606
|
) |
1,994,123
|
||||||||||||
Intangible Assets, Net
|
468,507
|
—
|
—
|
468,507
|
|||||||||||||
Goodwill
|
1,869,860
|
—
|
—
|
1,869,860
|
|||||||||||||
Other Assets
|
290,366
|
3,882
|
—
|
294,248
|
|||||||||||||
Deferred Tax Assets
|
739,482
|
—
|
—
|
739,482
|
|||||||||||||
Total Assets
|
$ |
20,638,826
|
$ |
8,905,875
|
$ |
(620,051
|
) | $ |
28,924,650
|
||||||||
Liabilities and Partners’ Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loans Payable
|
$ |
3,471,151
|
$ |
6,480,711
|
$ |
—
|
$ |
9,951,862
|
|||||||||
Due to Affiliates
|
907,748
|
470,780
|
(342,752
|
) |
1,035,776
|
||||||||||||
Accrued Compensation and Benefits
|
2,942,128
|
—
|
—
|
2,942,128
|
|||||||||||||
Securities Sold, Not Yet Purchased
|
50,014
|
92,603
|
—
|
142,617
|
|||||||||||||
Repurchase Agreements
|
—
|
222,202
|
—
|
222,202
|
|||||||||||||
Accounts Payable, Accrued Expenses and Other Liabilities
|
622,490
|
253,489
|
—
|
875,979
|
|||||||||||||
Total Liabilities
|
7,993,531
|
7,519,785
|
(342,752
|
) |
15,170,564
|
||||||||||||
Redeemable
Non-Controlling
Interests in Consolidated Entities
|
22,000
|
119,779
|
—
|
141,779
|
|||||||||||||
Partners’ Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Partners’ Capital
|
6,415,700
|
277,299
|
(277,299
|
) |
6,415,700
|
||||||||||||
Accumulated Other Comprehensive Loss
|
(36,476
|
) |
—
|
—
|
(36,476
|
) | |||||||||||
Non-Controlling
Interests in Consolidated Entities
|
2,659,754
|
989,012
|
—
|
3,648,766
|
|||||||||||||
Non-Controlling
Interests in Blackstone Holdings
|
3,584,317
|
—
|
—
|
3,584,317
|
|||||||||||||
Total Partners’ Capital
|
12,623,295
|
1,266,311
|
(277,299
|
) |
13,612,307
|
||||||||||||
Total Liabilities and Partners’ Capital
|
$ |
20,638,826
|
$ |
8,905,875
|
$ |
(620,051
|
) | $ |
28,924,650
|
||||||||
(a) | The Consolidated Blackstone Funds consisted of the following: |
* | Consolidated as of December 31, 2018 only. |
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Name
|
Age
|
|
Position
|
|||
Stephen A. Schwarzman
|
73
|
Founder, Chairman and Chief Executive Officer and Director
|
||||
Jonathan D. Gray
|
50
|
President, Chief Operating Officer and Director
|
||||
Hamilton E. James
|
69
|
Executive Vice Chairman and Director
|
||||
Michael S. Chae
|
51
|
Chief Financial Officer
|
||||
John G. Finley
|
63
|
Chief Legal Officer
|
||||
Joseph P. Baratta
|
49
|
Global Head of Private Equity and Director*
|
||||
Kelly A. Ayotte
|
51
|
Director
|
||||
James W. Breyer
|
58
|
Director
|
||||
Sir John Antony Hood
|
68
|
Director
|
||||
Rochelle B. Lazarus
|
72
|
Director
|
||||
Jay O. Light
|
78
|
Director
|
||||
The Right Honorable Brian Mulroney
|
80
|
Director
|
||||
William G. Parrett
|
74
|
Director
|
* | Appointment to board of directors effective March 2, 2020. |
Item 11.
|
Executive Compensation
|
Executive
|
Title
|
|
Stephen A. Schwarzman
|
Chairman and Chief Executive Officer
|
|
Jonathan D. Gray
|
President and Chief Operating Officer
|
|
Hamilton E. James
|
Executive Vice Chairman
|
|
Michael S. Chae
|
Chief Financial Officer
|
|
John G. Finley
|
Chief Legal Officer
|
Name and Principal Position
|
Year
|
|
Salary
|
|
Bonus (a)
|
|
Stock
Awards (b) |
|
All Other
Compensation (c) |
|
Total
|
|
||||||||||||
Stephen A. Schwarzman
Chairman and
Chief Executive Officer
|
2019
|
$ |
350,000
|
$ |
—
|
$ |
—
|
$ |
56,723,953
|
$ |
57,073,953
|
|||||||||||||
2018
|
$ |
350,000
|
$ |
—
|
$ |
—
|
$ |
68,797,028
|
$ |
69,147,028
|
||||||||||||||
2017
|
$ |
350,000
|
$ |
—
|
$ |
—
|
$ |
125,169,429
|
$ |
125,519,429
|
||||||||||||||
Jonathan D. Gray
President and
Chief Operating Officer
|
2019
|
$ |
350,000
|
$ |
10,000,000
|
$ |
33,006,635
|
$ |
55,637,598
|
$ |
98,994,233
|
|||||||||||||
2018
|
$ |
350,000
|
$ |
10,000,000
|
$ |
—
|
$ |
47,470,560
|
$ |
57,820,560
|
||||||||||||||
2017
|
$ |
350,000
|
$ |
25,797,554
|
$ |
6,040,668
|
$ |
131,861,776
|
$ |
164,049,998
|
||||||||||||||
Hamilton E. James
Executive Vice Chairman
|
2019
|
$ |
350,000
|
$ |
27,347,258
|
$ |
—
|
$ |
28,265,429
|
$ |
55,962,687
|
|||||||||||||
2018
|
$ |
350,000
|
$ |
28,785,507
|
$ |
—
|
$ |
37,108,062
|
$ |
66,243,569
|
||||||||||||||
2017
|
$ |
350,000
|
$ |
45,978,814
|
$ |
—
|
$ |
61,426,748
|
$ |
107,755,562
|
||||||||||||||
Michael S. Chae
Chief Financial Officer
|
2019
|
$ |
350,000
|
$ |
5,713,868
|
$ |
3,960,195
|
$ |
5,556,311
|
$ |
15,580,374
|
|||||||||||||
2018
|
$ |
350,000
|
$ |
5,702,045
|
$ |
1,398,751
|
$ |
6,865,619
|
$ |
14,316,416
|
||||||||||||||
2017
|
$ |
350,000
|
$ |
6,634,789
|
$ |
27,723
|
$ |
11,204,987
|
$ |
18,217,499
|
||||||||||||||
John G. Finley
Chief Legal Officer
|
2019
|
$ |
350,000
|
$ |
3,691,801
|
$ |
4,564,697
|
$ |
1,383,733
|
$ |
9,990,231
|
|||||||||||||
2018
|
$ |
350,000
|
$ |
3,584,415
|
$ |
2,143,429
|
$ |
1,627,559
|
$ |
7,705,403
|
||||||||||||||
2017
|
$ |
350,000
|
$ |
3,787,940
|
$ |
1,578,479
|
$ |
2,295,742
|
$ |
8,012,161
|
(a) | The amounts reported in this column reflect the annual cash bonus payments made for performance in the indicated year. |
(b) | The reference to “stock” in this table refers to deferred restricted Blackstone Holdings Partnership Units or deferred restricted common stock units. The amounts reported in this column represent the grant date fair value of stock awards granted for financial statement reporting purposes in accordance with GAAP pertaining to equity-based compensation. The assumptions used in determining the grant date fair value are set forth in Note 17. “Equity-Based Compensation” in the “Notes to Consolidated Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data.” |
(c) |
Amounts reported for 2019 include distributions, whether in cash or
in-kind,
in respect of carried interest or incentive fee allocations relating to our Performance Plans to the named executive officer in 2019 as follows: $53,486,800 for Mr. Schwarzman, $52,790,654 for Mr. Gray, $27,169,243 for Mr. James, $5,358,441 for Mr. Chae and $1,303,840 for Mr. Finley, respectively. Any
in-kind
distributions in respect of carried interest are reported based on the market value of the securities distributed as of the date of distribution. For 2019, Messrs. Schwarzman, Gray, James and Chae were the only named executive officers who received such
in-kind
distributions. We have determined to present compensation relating to carried interest and incentive fees within the Summary Compensation Table in the year in which such compensation is paid to the named executive officer under the terms of the relevant Performance Plan. Accordingly, the amounts presented in the table differ from the compensation expense recorded by us on an accrual basis for such year in respect of carried interest and incentive fees allocable to a named executive officer, which accrued amounts for 2019 are separately disclosed in this footnote to the Summary Compensation Table. We believe that the presentation of the actual amounts of carried interest- and incentive
fee-related
compensation paid to a named executive officer during the year, instead of the amounts of compensation expense we have recorded on an accrual basis, most appropriately reflects the actual compensation received by the named executive officer and represents the amount most directly aligned with the named executive officer’s actual performance. By contrast, the amount of compensation expense accrued in respect of carried interest and incentive fees allocable to a named executive officer can be highly volatile from year to year, with amounts accrued in one year being reversed in a following year, and vice versa, causing such amounts to be less useful as a measure of the compensation actually earned by a named executive officer in any particular year.
|
Name
|
Grant Date
|
|
All Other
Stock Awards: Number of Shares of Stock or Units (a) |
|
Grant Date Fair
Value of Stock and
Option
Awards (a) |
|
|||||||
Stephen A. Schwarzman
|
—
|
—
|
$ |
—
|
|||||||||
Jonathan D. Gray
|
7/1/2019
|
708,601
|
(c) | $ |
33,006,635
|
||||||||
Hamilton E. James
|
—
|
—
|
$ |
—
|
|||||||||
Michael S. Chae
|
7/1/2019
|
47,241
|
(c) | $ |
2,200,486
|
||||||||
|
1/10/2020
|
30,487
|
(b) | $ |
1,759,710
|
||||||||
John G. Finley
|
7/1/2019
|
47,241
|
(c) | $ |
2,200,486
|
||||||||
|
1/10/2020
|
40,960
|
(b) | $ |
2,364,211
|
(a) | The references to “stock” or “shares” in this table refer to deferred restricted Blackstone Holdings Partnership Units or our deferred restricted common stock units. |
(b) | Represents deferred restricted common stock units granted in 2020 under the Bonus Deferral Plan for 2019 performance. These grants are reflected in the “Stock Awards” column of the Summary Compensation Table in 2019. |
(c) | Represents deferred restricted Blackstone Holdings Partnership Units granted under our 2007 Equity Incentive Plan and reflects 2018 performance. |
Portion of Annual Incentive
|
Marginal
Deferral Rate Applicable to Such Portion |
|
Effective
Deferral Rate for Entire Annual Bonus (a) |
|
||||
$0 - 100,000
|
0%
|
0.0%
|
||||||
$100,001 - 200,000
|
15%
|
7.5%
|
||||||
$200,001 - 500,000
|
20%
|
15.0%
|
||||||
$500,001 - 750,000
|
30%
|
20.0%
|
||||||
$750,001 - 1,250,000
|
40%
|
28.0%
|
||||||
$1,250,001 - 2,000,000
|
45%
|
34.4%
|
||||||
$2,000,001 - 3,000,000
|
50%
|
39.6%
|
||||||
$3,000,001 - 4,000,000
|
55%
|
43.4%
|
||||||
$4,000,001 - 5,000,000
|
60%
|
46.8%
|
||||||
$5,000,000 +
|
65%
|
52.8%
|
(a) | Effective deferral rates are shown for illustrative purposes only and are based on an annual cash payment equal to the maximum amount in the range shown in the far left column (which is assumed to be $7,500,000 for the last range shown). |
|
Stock Awards (a)
|
||||||||
Name
|
Number of
Shares or Units of Stock That Have Not Vested |
|
Market Value of
Shares or Units of Stock That Have Not Vested (b) |
|
|||||
Stephen A. Schwarzman
|
—
|
$ |
—
|
||||||
Jonathan D. Gray
|
915,896
|
$ |
51,235,222
|
||||||
Hamilton E. James
|
—
|
$ |
—
|
||||||
Michael Chae
|
947,166
|
$ |
53,038,733
|
||||||
John G. Finley (c)
|
292,029
|
$ |
16,409,011
|
(a) | The references to “stock” or “shares” in this table refer to unvested deferred restricted Blackstone Holdings Partnership Units and unvested deferred restricted common stock units granted under the Bonus Deferral Plan (including deferred restricted common stock units granted to Messrs. Chae and Finley in 2020 in respect of 2019 performance). The vesting terms of these awards are described under the captions “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2019 — Terms of Blackstone Holdings Partnership Units Granted in 2019 and Prior Years” above. |
(b) | The dollar amounts shown under this column were calculated by multiplying the number of unvested deferred restricted Blackstone Holdings Partnership Units or unvested deferred restricted common stock units held by the named executive officer by the closing market price of $55.94 per share of our Class A common stock on December 31, 2019, the last trading day of 2019, other than the deferred restricted common stock units granted in 2020 in respect of 2019 performance, which are valued as of the date of their grant. |
(c) | Amounts reported for Mr. Finley include (1) 68,494 deferred restricted Blackstone Holdings Partnership Units, which reflects 50% of the unvested deferred restricted Blackstone Holdings Partnership Units that have been granted to Mr. Finley and (2) 155,042 deferred restricted common stock units granted pursuant to the Bonus Deferral Plan, which are considered vested and undelivered for financial statement reporting purposes in accordance with GAAP pertaining to equity-based compensation due to Mr. Finley’s retirement eligibility. Upon retirement the deferred restricted Blackstone Holdings Partnership Units are scheduled to vest and be delivered over the vesting period and the deferred restricted common stock units are scheduled to be delivered in equal annual installments over the three year deferral period, in each case subject to forfeiture if the named executive officer violates any applicable provision of his employment agreement or engages in any competitive activity (as such term is defined in the applicable award agreement or the Bonus Deferral Plan, as applicable). |
|
Stock Awards (a)
|
||||||||
Name
|
Number of Shares
Acquired on Vesting |
|
Value Realized
on Vesting (b) |
|
|||||
Stephen A. Schwarzman
|
—
|
$ |
—
|
||||||
Jonathan D. Gray
|
165,304
|
$ |
4,927,712
|
||||||
Hamilton E. James
|
—
|
$ |
—
|
||||||
Michael S. Chae
|
170,834
|
$ |
7,836,922
|
||||||
John G. Finley
|
115,078
|
$ |
4,598,187
|
(a) | The references to “stock” or “shares” in this table refer to deferred restricted Blackstone Holdings Partnership Units and our deferred restricted common stock units. |
(b) | The value realized on vesting is based on the closing market prices of our Class A common stock on the day of vesting. |
• | engage in any business activity in which we operate, including any competitive business, |
• | render any services to any competitive business, or |
• | acquire a financial interest in or become actively involved with any competitive business (other than as a passive investor holding minimal percentages of the stock of public companies). |
Covenant
|
Stephen A. Schwarzman
|
Other Senior
Managing Directors
|
Other Contracting
Employees
|
|||
Non-competition
|
Two years after termination of employment.
|
One year after termination of employment (which may be extended to 18 months in Blackstone’s sole discretion).
|
Between 90 days and nine months after termination of employment.
|
|||
Non-solicitation
of Blackstone employees
|
Two years after termination of employment.
|
Two years after termination of employment.
|
Generally one year after termination of employment.
|
|||
Non-solicitation
of Blackstone clients or investors
|
Two years after termination of employment.
|
One year after termination of employment (which may be extended to 18 months in Blackstone’s sole discretion).
|
Generally between six months and one year after termination of employment.
|
|||
Non-interference
with business relationships
|
Two years after termination of
employment.
|
One year after termination of
employment (which may be extended to 18 months in Blackstone’s sole discretion).
|
Generally between six months and one year after termination of employment.
|
Name
|
Fees
Earned or Paid in Cash |
|
Stock
Awards
(a) (b)
|
|
Total
|
|
|||||||
Bennett J. Goodman (c)
|
$ |
—
|
$ |
—
|
$ |
—
|
|||||||
Kelly A. Ayotte (d)
|
$ |
94,758
|
$ |
209,210
|
$ |
303,968
|
|||||||
James W. Breyer
|
$ |
150,000
|
$ |
210,035
|
$ |
360,035
|
|||||||
Sir John Hood
|
$ |
150,000
|
$ |
211,524
|
$ |
361,524
|
|||||||
Rochelle B. Lazarus
|
$ |
150,000
|
$ |
212,182
|
$ |
362,182
|
|||||||
Jay O. Light
|
$ |
200,000
|
$ |
209,022
|
$ |
409,022
|
|||||||
The Right Honorable Brian Mulroney
|
$ |
150,000
|
$ |
209,481
|
$ |
359,481
|
|||||||
William G. Parrett
|
$ |
180,000
|
$ |
219,930
|
$ |
399,930
|
(a) | The references to “stock” in this table refer to our deferred restricted common stock units. Amounts for 2019 represent the grant date fair value of stock awards granted in the year, computed in accordance with GAAP, pertaining to equity-based compensation. The assumptions used in determining the grant date fair value are set forth in Note 16. “Earnings Per Share and Stockholder’s Equity” in the “Notes to Consolidated Financial Statements” in “Part II. Item 8. Financial Statements and Supplementary Data.” These deferred restricted common stock units vest, and the underlying shares of Blackstone Class A common stock will be delivered, on the first anniversary of the date of the grant, subject to the outside director’s continued service on our board of directors. |
(b) |
Each of our
non-employee
directors was granted deferred restricted common stock units upon appointment as a director. In 2019, in connection with the anniversary of his or her initial grant, each of the following directors was granted deferred restricted common stock units: Ms. Lazarus — 4,566 units; Mr. Light — 3,955 units; Mr. Mulroney — 4,651 units; Mr. Parrett — 4,268 units; Mr. Hood — 5,370 units; and Mr. Breyer — 4,564 units. In addition, Ms. Ayotte was granted 5,392 deferred
|
restricted common stock units upon her appointment as a director in 2019. The amounts of our
non-employee
directors’ compensation were approved by our board of directors upon the recommendation of our founder following his review of directors’ compensation paid by comparable companies.
|
|
Stock Awards (1)
|
|||||||
Name
|
Number of
Shares or Units of Stock That Have Not Vested |
|
Market
Value of
Shares or Units of Stock That Have Not Vested (2) |
|
||||
Kelly A. Ayotte
|
5,392
|
$ |
301,628
|
|||||
James W. Breyer
|
4,564
|
$ |
255,310
|
|||||
Sir John Hood
|
5,370
|
$ |
300,398
|
|||||
Rochelle B. Lazarus
|
4,566
|
$ |
255,422
|
|||||
Jay O. Light
|
3,955
|
$ |
221,243
|
|||||
The Right Honorable Brian Mulroney
|
4,651
|
$ |
260,177
|
|||||
William G. Parrett
|
4,268
|
$ |
238,752
|
(1) | The references to “stock” or “shares” in this table refer to our deferred restricted common stock units. |
(2) | The dollar amounts shown in this column were calculated by multiplying the number of unvested deferred restricted common stock units held by the director by the closing market price of $55.94 per share of our Class A common stock on December 31, 2019, the last trading day of 2019. |
(c) | Mr. Goodman resigned from the board of directors effective January 1, 2020. During 2019, Mr. Goodman served as a senior managing director of the Company and no additional remuneration was paid to him for his service as director. Mr. Goodman’s employee compensation is discussed in “—Item 13. Certain Relationships and Related Transactions, and Director Independence.” |
(d) |
Ms. Ayotte was appointed to the board of directors on April 11, 2019. Therefore, the amounts reported for Ms. Ayotte reflect the
pro-rated
portion of her annual cash retainer earned from the date of her appointment.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
• | each person known to us to beneficially own 5% of any class of the outstanding voting securities of The Blackstone Group Inc.; |
• | each member of our board of directors; |
• | each of our named executive officers; and |
• | all our directors and executive officers as a group. |
|
Class A Common Stock
Beneficially Owned |
Blackstone Holdings
Partnership Units Beneficially Owned (a) |
|||||||||||||||
Name of Beneficial Owner
|
Number
|
|
% of
Class |
|
Number
|
|
% of
Class |
|
|||||||||
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The Vanguard Group, Inc. (b)
|
37,649,030
|
5.6
|
% |
—
|
—
|
||||||||||||
Directors and Executive Officers (c)(d)
|
|
|
|
|
|||||||||||||
Stephen A. Schwarzman (e)(f)
|
—
|
—
|
231,924,793
|
48.8
|
% | ||||||||||||
Jonathan D. Gray (f)
|
438,315
|
*
|
40,585,300
|
8.5
|
% | ||||||||||||
Hamilton E. James (f)
|
20,497
|
*
|
28,880,300
|
6.1
|
% | ||||||||||||
Michael S. Chae (f)
|
35,880
|
*
|
5,995,079
|
1.3
|
% | ||||||||||||
John G. Finley (f)
|
135,306
|
*
|
440,789
|
*
|
|||||||||||||
Kelly A. Ayotte
|
—
|
—
|
—
|
—
|
|||||||||||||
James W. Breyer
|
14,625
|
*
|
—
|
—
|
|||||||||||||
Sir John Hood
|
3,344
|
*
|
—
|
—
|
|||||||||||||
Rochelle B. Lazarus (f)
|
42,540
|
*
|
—
|
—
|
|||||||||||||
Jay O. Light
|
58,513
|
*
|
—
|
—
|
|||||||||||||
The Right Honorable Brian Mulroney
|
164,724
|
*
|
—
|
—
|
|||||||||||||
William G. Parrett (g)
|
84,903
|
*
|
—
|
—
|
|||||||||||||
All executive officers and directors as a group (12 persons)
|
998,647
|
*
|
307,826,261
|
64.7
|
% |
* | Less than one percent |
(a) |
Subject to certain requirements and restrictions, the partnership units of Blackstone Holdings are exchangeable for shares of our Class A common stock on a
one-for-one
basis. A Blackstone Holdings limited partner must exchange one partnership unit in each of the five Blackstone Holdings Partnerships to effect an exchange for a share of our Class A common stock. See “— Item 13. Certain Relationships and Related Transactions, and Director Independence — Exchange Agreement.” Beneficial ownership of Blackstone Holdings Partnership Units reflected in this table has not been also reflected as beneficial ownership of our shares of Class A common stock for which such units may be exchanged.
|
(b) | Reflects shares of Class A common stock beneficially owned by The Vanguard Group, Inc. and its subsidiaries based on the Schedule 13G filed by The Vanguard Group, Inc. on February 11, 2020. The address of The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. |
(c) | The shares of Class A common stock and Blackstone Holdings Partnership Units beneficially owned by the directors and executive officers reflected above do not include the following number of securities that will be delivered to the respective individual more than 60 days after February 28, 2020: Mr. Gray — 708,601 deferred restricted Blackstone Holdings Partnership Units and 57,596 deferred restricted common stock units; Mr. Chae — 865,477 deferred restricted Blackstone Holdings Partnership Units and 59,919 deferred restricted common stock units; Mr. Finley — 136,987 deferred restricted Blackstone Holdings Partnership Units and 100,706 deferred restricted common stock units; Ms. Ayotte — 5,392 deferred restricted common stock units; Mr. Mulroney — 4,651 deferred restricted common stock units; Mr. Parrett — 4,268 deferred restricted common stock units; Ms. Lazarus — 4,566 deferred restricted common stock units; Mr. Light — 3,955 deferred restricted common stock units; Mr. Breyer — 4,564 deferred restricted common stock units; and Mr. Hood — 5,370 deferred restricted common stock units. |
(d) | The Blackstone Holdings Partnership Units shown in the table above include the following number of vested units being held back under our minimum retained ownership requirements: Mr. Schwarzman — 24,489,796 Blackstone Holdings Partnership Units; Mr. Gray — 11,477,971 Blackstone Holdings Partnership Units; Mr. James — 14,648,744 Blackstone Holdings Partnership Units; Mr. Chae — 3,223,072 Blackstone Holdings Partnership Units; and Mr. Finley — 165,445 Blackstone Holdings Partnership Units. |
(e) | On those few matters that may be submitted for a vote of the sole holder of the Class B common stock, Blackstone Partners L.L.C., an entity owned by senior managing directors of Blackstone and controlled by Mr. Schwarzman, is entitled to an aggregate number of votes on any matter that may be submitted for a vote of our Class A common stock that is equal to the aggregate number of vested and unvested Blackstone Holdings Partnership Units held by the limited partners of Blackstone Holdings on the relevant record date and entitles it to participate in the vote on the same basis as our Class A common stock. Our senior managing directors have agreed in the limited liability company agreement of Blackstone Partners L.L.C. that our founder, Mr. Schwarzman, will have the power to determine how the Class B common stock held by Blackstone Partners L.L.C. will be voted. Following the withdrawal, death or disability of Mr. Schwarzman (and any successor founder), this power will revert to the members of Blackstone Partners L.L.C. holding a majority in interest in that entity. The limited liability company agreement of Blackstone Partners L.L.C. provides that at such time as Mr. Schwarzman should cease to be a founding member, Jonathan D. Gray will thereupon succeed Mr. Schwarzman as the sole founding member of Blackstone Partners L.L.C. If Blackstone Partners L.L.C. directs us to do so, we will issue shares of Class B common stock to each of the limited partners of Blackstone Holdings, whereupon each holder of Class B common stock will be entitled to a number of votes that is equal to the number of vested and unvested Blackstone Holdings Partnership Units held by such Class B common stockholder on the relevant record date. |
(f) | The Blackstone Holdings Partnership Units shown in the table above for such named executive officers and directors include (a) the following units held for the benefit of family members with respect to which the named executive officer or director, as applicable, disclaims beneficial ownership: Mr. Schwarzman — 1,873,140 units held in various trusts for which Mr. Schwarzman is the investment trustee, Mr. James — 9,157,207 units held in various trusts for which Mr. James and his brother are trustees (but Mr. James does not have or share investment control with respect to the units), Mr. Gray — 7,218,465 units held in a trust for which Mr. Gray is the investment trustee and Mr. Chae — 1,150,070 units held in various trusts for which Mr. Chae is the investment trustee, (b) the following units held in grantor retained annuity trusts for which the named executive officer or director, as applicable, is the investment trustee: Mr. Schwarzman — 2,723,913 units and Mr. Gray — 15,141,837 units, (c) the following units held by a corporation for which the named executive officer is a controlling shareholder: Mr. Schwarzman — 1,438,529 units and (d) 5,000,000 units that have been pledged by Mr. Schwarzman as security to a third party to secure payment for a loan made by such third party. Mr. Schwarzman also directly, or through a corporation for which he is the controlling shareholder, beneficially owns an additional 364,278 partnership units in each of Blackstone Holdings II L.P., Blackstone Holdings III L.P. and Blackstone Holdings IV L.P. In addition, with respect to Mr. Schwarzman, the above table excludes partnership units of Blackstone Holdings held by his children or in trusts for the benefit of his family as to which he has no voting or investment control. The Blackstone Class A common stock shown in the table above for each named executive officer and director include (a) the following shares held for the benefit of family members with respect to which the named executive officer or director, as applicable, disclaims beneficial ownership: Mr. James — 20,497 shares held in a family limited liability company, Mr. Finley — 62,523 shares held in a family limited liability company and 2,000 shares held in a trust for the benefit of family members of which he is a trustee, and Ms. Lazarus — 2,950 shares held in trusts for the benefit of family members over which she shares investment control and (b) 11,000 shares held in a trust for the benefit of Mr. Finley and of which he is the trustee. |
(g) | The Class A common stock shown in the table above for Mr. Parrett includes 13,000 shares that are pledged to a third party to secure payment for a loan. |
|
Number of
Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) |
|
Weighted-Average
Exercise Price of Outstanding Options, Warrants and Rights |
|
Number of
Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) |
|
||||||
Equity Compensation Plans Approved by Security Holders
|
53,502,880
|
—
|
158,769,854
|
|||||||||
Equity Compensation Plans Not Approved by Security Holders
|
—
|
—
|
—
|
|||||||||
|
53,502,880
|
—
|
158,769,854
|
|||||||||
(a) | Reflects the outstanding number of our deferred restricted common stock units and deferred restricted Blackstone Holdings Partnership Units granted under the 2007 Equity Incentive Plan as of December 31, 2019. |
(b) |
The aggregate number of our Class A common stock and Blackstone Holdings Partnership Units covered by the 2007 Equity Incentive Plan is increased on the first day of each fiscal year during its term by a number of shares of Class A common stock equal to the positive difference, if any, of (a) 15% of the aggregate number of shares of our Class A common stock and Blackstone Holdings Partnership Units outstanding on the last day of the immediately preceding fiscal year (excluding Blackstone Holdings Partnership Units held by The Blackstone Group Inc. or its wholly owned subsidiaries) minus (b) the aggregate number of shares of our Class A common stock and Blackstone Holdings Partnership Units covered by the 2007 Equity Incentive Plan as of such date (unless the administrator of the 2007 Equity Incentive Plan should decide to increase the number of shares of our Class A common stock and Blackstone Holdings Partnership Units covered by the plan by a lesser amount). As of January 1, 2020, pursuant to this formula, 171,085,619 shares of Class A common stock, which is equal to 0.15 times the number of shares of our Class A common stock and Blackstone Holdings Partnership Units outstanding on December 31, 2019, were available for issuance under the 2007 Equity Incentive Plan. We have filed a registration statement and intend to file additional registration statements on Form
S-8
under the Securities Act to register shares of Class A common stock covered by the 2007 Equity Incentive Plan (including pursuant to automatic annual increases). Any such Form
S-8
registration statement will automatically become effective upon filing. Accordingly, shares of Class A common stock registered under such registration statement will be available for sale in the open market.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
|
Year Ended December 31, 2019
|
||||||||||||||||
|
The Blackstone
Group Inc. |
|
Blackstone
Entities, Principally Fund Related (c) |
|
Blackstone
Funds, Transaction Related (d) |
|
Total
|
|
|||||||||
|
(Dollars in Thousands)
|
||||||||||||||||
Audit Fees
|
$ |
10,185
|
(a) | $ |
41,395
|
$ |
—
|
$ |
51,580
|
||||||||
Audit-Related Fees
|
—
|
2,946
|
19,257
|
22,203
|
|||||||||||||
Tax Fees
|
1,222
|
(b) |
63,424
|
10,873
|
75,519
|
||||||||||||
All Other Fees
|
—
|
172
|
—
|
172
|
|||||||||||||
|
$ |
11,407
|
$ |
107,937
|
$ |
30,130
|
$ |
149,474
|
|||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||
|
The Blackstone
Group Inc. |
|
Blackstone
Entities, Principally Fund Related (c) |
|
Blackstone
Funds, Transaction Related (d) |
|
Total
|
|
|||||||||
|
(Dollars in Thousands)
|
||||||||||||||||
Audit Fees
|
$ |
9,500
|
(a) | $ |
37,306
|
$ |
—
|
$ |
46,806
|
||||||||
Audit-Related Fees
|
—
|
191
|
25,473
|
25,664
|
|||||||||||||
Tax Fees
|
1,316
|
(b) |
54,216
|
14,145
|
69,677
|
||||||||||||
All Other Fees
|
—
|
739
|
—
|
739
|
|||||||||||||
|
$ |
10,816
|
$ |
92,452
|
$ |
39,618
|
$
|
142,886
|
|||||||||
(a) |
Audit Fees consisted of fees for (1) the audits of our consolidated financial statements in our Annual Report on Form
10-K
and services attendant to, or required by, statute or regulation, (2) reviews of the interim condensed consolidated financial statements included in our quarterly reports on Form
10-Q,
and (3) consents and other services related to SEC and other regulatory filings.
|
(b) | Tax Fees consisted of fees for services rendered for tax compliance and tax planning and advisory services. |
(c) | The Deloitte Entities also provide audit, audit-related and tax services (primarily tax compliance and related services) to certain Blackstone Funds and other corporate entities. |
(d) | Audit-Related and Tax Fees included merger and acquisition due diligence services provided in connection with potential acquisitions of portfolio companies for investment purposes primarily to certain private equity and real estate funds managed by Blackstone in its capacity as the general partner. In addition, the Deloitte Entities provide audit, audit-related, tax and other services to the portfolio companies, which are approved directly by the portfolio company’s management and are not included in the amounts presented here. |
Item 15.
|
Exhibits, Financial Statement Schedules
|
(a) | The following documents are filed as part of this annual report. |
1. |
Financial Statements:
|
2. |
Financial Statement Schedules:
|
3. |
Exhibits:
|
Exhibit
Number |
|
Exhibit Description
|
||
3.1
|
||||
3.2
|
||||
3.3
|
||||
4.1*
|
||||
4.2
|
||||
4.3
|
||||
4.4
|
||||
4.5
|
||||
4.6
|
||||
4.7
|
Exhibit
Number |
|
Exhibit Description
|
||
4.8
|
||||
4.9
|
||||
4.10
|
||||
4.11
|
||||
4.12
|
||||
4.13
|
||||
4.14
|
||||
4.15
|
||||
4.16
|
||||
4.17
|
||||
4.18
|
Form of 3.150% Senior Note due 2027 (included in Exhibit 4.17 hereto). |
|||
4.19
|
||||
4.20
|
Form of 4.000% Senior Note due 2047 (included in Exhibit 4.19 hereto). |
Exhibit
Number |
|
Exhibit Description
|
||
10.7
|
||||
10.8
|
||||
10.9
|
||||
10.10
|
||||
10.11+
|
||||
10.12+*
|
||||
10.13+
|
||||
10.14+
|
||||
10.15+
|
||||
10.16+
|
||||
10.17+
|
||||
10.18+
|
Exhibit
Number |
|
Exhibit Description
|
||
10.19+
|
||||
10.19.1+
|
||||
10.20+
|
||||
10.21+
|
||||
10.22+
|
||||
10.23+
|
||||
10.24+
|
||||
10.25+
|
||||
10.26+
|
||||
10.27+
|
Exhibit
Number |
|
Exhibit Description
|
||
10.27.1+
|
||||
10.28
|
||||
10.29+
|
||||
10.30+
|
||||
10.31+
|
||||
10.32+
|
||||
10.33+
|
||||
10.34+
|
||||
10.35+
|
||||
10.36+
|
||||
10.37+
|
Exhibit
Number |
|
Exhibit Description
|
||
10.38+
|
||||
10.39+
|
||||
10.40+
|
||||
10.41+
|
||||
10.42+
|
||||
10.43+
|
||||
10.44+
|
||||
10.45+
|
||||
10.46+
|
||||
10.47+
|
||||
10.48+
|
Exhibit
Number |
|
Exhibit Description
|
||
10.49+
|
||||
10.50+
|
||||
10.51+
|
||||
10.52+
|
||||
10.53+
|
||||
10.54+
|
||||
10.55+
|
||||
10.56+
|
||||
10.57+
|
||||
10.58+
|
||||
10.59+
|
||||
10.60+
|
Exhibit
Number |
|
Exhibit Description
|
||
10.61
|
||||
10.62+
|
||||
10.63+
|
||||
10.64+
|
||||
10.65+
|
||||
10.66+
|
||||
10.67+
|
||||
10.68+
|
||||
10.69+
|
||||
10.70+
|
||||
10.71+
|
||||
10.72+
|
Exhibit
Number |
|
Exhibit Description
|
||
10.73+
|
||||
10.74+
|
||||
10.75+
|
||||
10.76+
|
||||
10.77+
|
||||
10.78+
|
||||
10.79+
|
||||
10.80+
|
||||
10.81+
|
||||
10.82*
|
||||
10.83*
|
||||
10.84*
|
Exhibit
Number |
|
Exhibit Description
|
||
10.85
|
||||
10.86+
|
||||
10.87+
|
||||
10.88+
|
||||
10.89+
|
||||
10.90+*
|
||||
10.91+
|
||||
10.92+
|
||||
10.93+
|
||||
10.94+
|
||||
10.95+
|
Exhibit
Number |
|
Exhibit Description
|
||
10.96+
|
||||
10.97+
|
||||
10.98+
|
||||
10.99+
|
||||
10.100+
|
||||
10.101+*
|
||||
10.102+*
|
||||
10.103+*
|
||||
10.104+*
|
||||
10.105+*
|
||||
10.106+*
|
||||
21.1*
|
||||
23.1*
|
||||
31.1*
|
||||
31.2*
|
||||
32.1*
|
||||
32.2*
|
Exhibit
Number |
|
Exhibit Description
|
||
101.INS*
|
XBRL Instance Document.
|
|||
101.SCH*
|
XBRL Taxonomy Extension Schema Document.
|
|||
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|||
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|||
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|||
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
* | Filed herewith. |
+ | Management contract or compensatory plan or arrangement in which directors or executive officers are eligible to participate. |
Item 16.
|
Form
10-
K Summary
|
The Blackstone Group Inc.
|
||
/s/ Michael S. Chae
|
||
Name:
|
Michael S. Chae
|
|
Title:
|
Chief Financial Officer
|
|
|
(Principal Financial Officer and Authorized Signatory)
|
/s/ Stephen A. Schwarzman
Stephen A. Schwarzman, Chief Executive Officer
and Chairman of the Board of Directors
(Principal Executive Officer)
|
/s/ James W. Breyer
James W. Breyer, Director
|
|
/s/ Jonathan D. Gray
Jonathan D. Gray, President, Chief Operating Officer and Director
|
/s/ Sir John Antony Hood
Sir John Antony Hood, Director
|
|
/s/ Hamilton E. James
Hamilton E. James, Executive Vice Chairman and Director
|
/s/ Rochelle B. Lazarus
Rochelle B. Lazarus, Director
|
|
/s/ Michael S. Chae
Michael S. Chae, Chief Financial Officer
(Principal Financial Officer)
|
/s/ Jay O. Light
Jay O. Light, Director
|
|
/s/ Christopher Striano
Christopher Striano, Principal Accounting Officer
(Principal Accounting Officer)
|
/s/ Brian Mulroney
Brian Mulroney, Director
|
|
/s/ Kelly A. Ayotte
Kelly A. Ayotte, Director
|
/s/ William G. Parrett
William G. Parrett, Director
|
Exhibit 4.1
DESCRIPTION OF CAPITAL STOCK
General
The following description summarizes important terms of our capital stock. This summary does not purport to be complete and is qualified in its entirety by the provisions of our certificate of incorporation and bylaws, copies of which have been filed by us with the Securities and Exchange Commission. For a complete description of our capital stock, you should refer to our certificate of incorporation, our bylaws and applicable provisions of Delaware law. As used in this section, we, us and our mean The Blackstone Group Inc., a Delaware corporation, and its successors, but not any of its subsidiaries.
Our authorized capital stock consists of 100,000,000,000 shares, all with a par value of $0.00001 per share, of which:
|
90,000,000,000 are designated as Class A common stock; |
|
999,999,000 are designated as Class B common stock; |
|
1,000 are designated as Class C common stock; and |
|
9,000,000,000 are designated as preferred stock. |
Common Stock
Our common stock consists of Class A common stock, Class B common stock and Class C common stock.
Economic Rights
Dividends. Subject to preferences that apply to any shares of preferred stock outstanding at the time, the holders of our Class A common stock are entitled to receive dividends out of funds legally available therefor if our board of directors, in its discretion, determines to declare and pay dividends and then only at the times and in the amounts that our board of directors may determine. Our certificate of incorporation provides that dividends shall not be declared or paid on our Class B common stock or our Class C common stock.
Liquidation. If we become subject to an event giving rise to our dissolution, liquidation or winding up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our Class A common stock and any participating preferred stock outstanding at that time ranking on a parity with our Class A common stock with respect to such distribution, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock. Our certificate of incorporation provides that the holders of our Class B common stock and our Class C common stock are not entitled to receive any of our assets upon our dissolution, liquidation or winding up.
Voting Rights
Our Class A common stock and our Class B common stock are non-voting and are not entitled to any votes on any matter that is submitted to a vote of our stockholders (including for purposes of the rules of any securities exchange on which the Class A common stock or Class B common stock, as applicable, is listed for trading), except as expressly provided in our certificate of incorporation or required by Delaware law. The Class C common stock is voting and is entitled to one vote per share on any matter that is submitted to a vote of our stockholders generally.
Our certificate of incorporation provides for holders of our Class A common stock and our Class B common stock, voting together as a single class, to have the right to vote on the following matters:
1
|
a sale, exchange or other disposition of all or substantially all of our and our subsidiaries assets, taken as a whole, in a single transaction or series of related transactions (except (i) for the sole purpose of changing our legal form into another limited liability entity and where the governing instruments of the new entity provide our stockholders with substantially the same rights and obligations and (ii) mortgages, pledges, hypothecations or grants of a security interest by us in all or substantially all of our assets (including for the benefit of affiliates of the holder of the Class C common stock (the Class C Stockholder)) and any forced sale of any or all of our or our subsidiaries assets pursuant to the foreclosure of, or other realization upon, any such encumbrance); |
|
a merger, consolidation or other combination (except for the sole purpose of changing our legal form into another limited liability entity and where the governing instruments of the new entity provide our stockholders with substantially the same rights and obligations); |
|
the removal of the Class C Stockholder and forced transfer by the Class C Stockholder of its shares of Class C common stock and the designation of a successor Class C Stockholder. See Removal of Class C Stockholder below; and |
|
certain amendments to our certificate of incorporation. |
In addition, our certificate of incorporation provides that holders of our Class B common stock will be entitled to vote separately as a class on certain matters, including any amendment to our certificate of incorporation that changes certain terms of the Class B common stock or is inconsistent with such terms. Delaware law would also permit the holders of our Class B common stock to vote separately as a class on any amendment to our certificate of incorporation that changes the par value of the shares of Class B common stock or alters or changes the powers, preferences or special rights of the Class B common stock in a way that would affect them adversely.
In addition, Delaware law would permit holders of our Class A common stock to vote as a separate class on an amendment to our certificate of incorporation that would:
|
change the par value of our Class A common stock; or |
|
alter or change the powers, preferences, or special rights of the Class A common stock in a way that would affect them adversely. |
Our certificate of incorporation provides that the number of authorized shares of any class of stock, including our Class A common stock, may be increased or decreased (but not below the number of shares of such class then outstanding) solely with the approval of the Class C Stockholder. As a result, the Class C Stockholder can approve an increase or decrease in the number of authorized shares of Class A common stock, Class B common stock, Class C common stock and preferred stock without a separate vote of the holders of the applicable class of common stock or preferred stock. This could allow us to increase and issue additional shares of Class A common stock, Class B common stock, Class C common stock and/or preferred stock beyond what is currently authorized in our certificate of incorporation without the consent of the holders of the applicable class of common stock or preferred stock. Blackstone Group Management L.L.C., an entity owned by senior managing directors of Blackstone and controlled by Mr. Schwarzman, is the initial holder of the Class C common stock.
Except as described below under Anti-Takeover ProvisionsLoss of voting rights, each record holder of Class A common stock will be entitled to a number of votes equal to the number of shares of Class A common stock held with respect to any matter on which the holders of Class A common stock are entitled to vote.
In addition, holders of our Class B common stock, as such, will collectively be entitled to a number of votes equal to the aggregate number of Blackstone Holdings Partnership Units (as defined below) held by the limited partners of the Blackstone Holdings Partnerships (as defined below) on the relevant record date and will vote together with holders of our Class A common stock as a single class. Blackstone Partners L.L.C., an entity owned by senior managing directors of Blackstone and controlled by Mr. Schwarzman, is the initial holder of the Class B common stock. If Blackstone Partners L.L.C. directs us to do so, we will issue one share of Class B common stock
2
to each of the limited partners of the Blackstone Holdings Partnerships, whereupon each holder of Class B common stock will be entitled to a number of votes that is equal to the number of Blackstone Holdings Partnership Units held by such holder of Class B common stock on the relevant record date. If the holders of Class A common stock become entitled to a number of votes other than one vote per share or the ratio at which Blackstone Holdings Partnership Units are exchangeable for our Class A common stock changes from a one-for-one basis, the number of votes to which the holders of the Class B common stock are entitled will be adjusted accordingly. Additional classes of common stock having special voting rights could also be issued.
No Preemptive or Similar Rights
The holders of our Class A common stock, Class B common stock and Class C common stock are not entitled to preemptive rights, and, except in the case of impermissible transfers of the Class C common stock, which would result in the cancellation of such Class C common stock, are not subject to conversion, redemption or sinking fund provisions.
Transferability
Without the approval of any other stockholder, the Class C Stockholder may transfer all or any part of the Class C common stock held by it with the prior written approval of our board of directors so long as the transferee agrees to assume the rights and duties of the Class C Stockholder under our certificate of incorporation, agrees to be bound by the provisions of our certificate of incorporation and we receive an opinion of counsel regarding certain limited liability matters. The foregoing limitations do not preclude the members or other interest holders of the Class C Stockholder from selling or transferring all or part of their outstanding equity or other interests in the Class C Stockholder at any time.
Removal of Class C Stockholder
The Class C Stockholder may, upon (i) the approval of the stockholders holding at least two-thirds of the voting power of our outstanding shares of Class A common stock and Class B common stock, voting together as a single class, and (ii) our receipt of an opinion of counsel regarding certain limited liability and tax matters, be required to transfer its shares of Class C common stock to a successor holder of Class C common stock designated by the stockholders holding a majority of the voting power of such classes, voting together as a single class (such designated successor, a Successor Class C Stockholder) (the Class C Stockholder Removal).
In the event of a Class C Stockholder Removal under circumstances where cause (as such term is defined in the certificate of incorporation) exists, the Successor Class C Stockholder will have the option to purchase the Class C Stockholders shares of Class C common stock and the Class C Stockholders general partner interest (or equivalent interest), if any, in our subsidiaries (collectively, the Combined Interest) for a cash payment equal to the fair market value of such Combined Interest. In the event of a Class C Stockholder Removal under all other circumstances, the Class C Stockholder will have the option to require the Successor Class C Stockholder to purchase its Combined Interest for a cash payment equal to the fair market value of such Combined Interest. In each case, this fair market value will be determined by agreement between the Class C Stockholder and the Successor Class C Stockholder. If no agreement is reached within 30 days after the Class C Stockholder Removal, an independent investment banking firm or other independent expert selected by the Class C Stockholder and the Successor Class C Stockholder will determine the fair market value. If the Class C Stockholder and the Successor Class C Stockholder cannot agree upon an expert within 45 days of the Class C Stockholder Removal, then an independent investment banking firm or other independent expert mutually chosen by the investment banking firms or experts designated by each of them will determine the fair market value.
If the option described above is not exercised by either the Class C Stockholder or the Successor Class C Stockholder, we will issue to the Class C Stockholder (or its transferee) shares of Class A common stock having a value equal to the Combined Interest determined pursuant to a valuation of such Combined Interest as determined by an investment banking firm or other independent expert selected in the manner described in the preceding paragraph, without reduction in such shares of Class C common stock (but subject to proportionate dilution by reason of the Successor Class C Stockholder).
3
In addition, we are required to reimburse the Class C Stockholder for all amounts due to the Class C Stockholder, including without limitation all employee-related liabilities, including severance liabilities, incurred for the termination of any employees employed by the Class C Stockholder or its affiliates for our benefit.
Exchange
The limited partner interests (the Blackstone Holdings Partnership Units) in Blackstone Holdings I L.P., Blackstone Holdings AI L.P., Blackstone Holdings II L.P., Blackstone Holdings III L.P., and Blackstone Holdings IV L.P. (collectively, the Blackstone Holdings Partnerships) are exchangeable for our Class A common stock on a one-for-one basis, subject to customary adjustments for splits, unit distributions and reclassifications and compliance with applicable lock-up, vesting and transfer restrictions. When Blackstone Holdings Partnership Units are exchanged for shares of Class A common stock, the number of votes to which the shares of our Class B common stock are entitled shall automatically be reduced by the number of Blackstone Holdings Partnership Units so exchanged.
Limited Call Right
If at any time less than 10% of the then issued and outstanding shares of any class (other than Class B common stock and Class C common stock) is held by persons other than the Class C Stockholder and its affiliates, we will have the right, which we may assign in whole or in part to the Class C Stockholder or any of its affiliates, to acquire all, but not less than all, of the remaining shares of the class held by unaffiliated persons as of a record date to be selected by us, on at least ten but not more than 60 days notice. The purchase price in the event of this purchase is the greater of:
(1) the current market price as of the date three days before the date the notice is mailed, and
(2) the highest cash price paid by us or any of our affiliates for any share of the class purchased within the 90 days preceding the date on which we first mail notice of our election to purchase those shares.
As a result of our right to purchase outstanding shares of stock, including Class A common stock, as described in the foregoing paragraph, a stockholder may have their shares purchased at an undesirable time or price.
Preferred Stock
Our board of directors is authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers (including voting powers), preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further vote or action by our stockholders (except as may be required by the terms of any preferred stock then outstanding). Our board of directors can also increase (but not above the total number of shares of preferred stock then authorized and available for issuance and not committed for other issuance) or decrease (but not below the number of shares of that series then outstanding) the number of shares of any series of preferred stock without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the proportion of voting power held by, or other relative rights of, the holders of our Class A common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control of our company and might adversely affect the market price of the Class A common stock or the proportion of voting power held by, or other relative rights of, the holders of the Class A common stock.
Conflicts of Interest
Delaware law permits corporations to adopt provisions renouncing any interest or expectancy in certain opportunities that are presented to the corporation or its officers, directors or stockholders. Our certificate of incorporation, to the maximum extent permitted from time to time by Delaware law, renounces any interest or expectancy that we have in any business ventures of (a) the Class C Stockholder, (b) our former general partner, (c)
4
any person who is or was a controlling affiliate of the Class C Stockholder or our former general partner, (d) any person who is or was a director or officer of Blackstone, the Class C Stockholder or our former general partner, (e) any person in clause (d) who is or was serving at the request of Blackstone, the Class C Stockholder or our former general partner as an officer, director, employee, member, partner, agent, fiduciary or trustee of another person (subject to certain limitations) and (f) certain other persons designated by the Corporation (collectively, the Indemnitees), except with respect to any corporate opportunity expressly offered to any Indemnitee solely through their service to us or our subsidiaries. Our certificate of incorporation provides that each Indemnitee has the right to engage in businesses of every type and description, including business interests and activities in direct competition with our business and activities. Our certificate of incorporation also waives and renounces any interest or expectancy that we may have in, or right to be offered an opportunity to participate in, business opportunities that are from time to time presented to the Indemnitees. Notwithstanding the foregoing, pursuant to our certificate of incorporation, the Class C Stockholder, for so long as it owns Class C common stock, has agreed that its sole business will be to act as the Class C Stockholder and as a general partner or managing member of any partnership or limited liability company that we may hold an interest in and that it will not engage in any business or activity or incur any debts or liabilities except (x) in connection therewith or incidental thereto or (y) in connection with or incidental to the acquisition, owning or disposing of debt or equity securities of us or any of our subsidiaries.
Anti-Takeover Provisions
Our certificate of incorporation and bylaws and the Delaware General Corporation Law (the DGCL) contain provisions, which are summarized in the following paragraphs, that are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and to discourage certain types of transactions that may involve an actual or threatened acquisition of our company. These provisions are intended to avoid costly takeover battles, reduce our vulnerability to a hostile change in control or other unsolicited acquisition proposal, and enhance the ability of our board of directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these provisions may have the effect of delaying, deterring or preventing a merger or acquisition of our company by means of a tender offer, a proxy contest or other takeover attempt that a stockholder might consider in its best interest, including attempts that might result in a premium over the prevailing market price for the shares of Class A common stock held by stockholders.
Non-voting common stock. Our Class A common stock is generally non-voting. In addition, our certificate of incorporation provides that generally, with respect to any matter on which the Class A common stock is entitled to vote, such vote shall require a majority in voting power or more of all the outstanding Class A common stock and Class B common stock, voting together as a single class. With respect to any matter as to which Class A common stock may be entitled to vote, depending on the number of shares of outstanding shares of Class A common stock and Class B common stock actually voted, our senior managing directors, as the owners of Blackstone Partners L.L.C., the initial holder of Class B common stock, and the persons to whom the shares of Class B common stock will be issued at the direction of Blackstone Partners L.L.C., should generally have sufficient voting power to significantly influence matters subject to the vote. Because our Class A common stock, which is the class of our capital stock listed on the New York Stock Exchange (the NYSE), is generally nonvoting, we believe based on discussions with the NYSE that the stockholder approval requirements of the NYSE do not apply.
Election of directors. Subject to the rights granted to one or more series of preferred stock then outstanding, the Class C Stockholder has the sole authority to elect directors.
Removal of directors. Subject to the rights granted to one or more series of preferred stock then outstanding, the Class C Stockholder has the sole authority to remove and replace any director, with or without cause, at any time.
Vacancies. In addition, our bylaws also provide that, subject to the rights granted to one or more series of preferred stock then outstanding, any newly created directorship on the board of directors that results from an increase in the number of directors and any vacancies on our board of directors will be filled only by the Class C Stockholder.
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Loss of voting rights. If at any time any person or group (other than the Class C Stockholder and its affiliates, a direct or indirect transferee of the Class C Stockholder or its affiliates (provided that, with respect to any indirect transferee, our board of directors shall have provided such transferee with written notification that this limitation shall not apply) or a person or group that has acquired such stock with the prior approval of our board of directors) acquires, in the aggregate, beneficial ownership of 20% or more of the Class A common stock then outstanding, that person or group will lose voting rights on all of its shares of Class A common stock and such shares of Class A common stock may not be voted on any matter as to which the holders of such shares of Class A common stock may be entitled to vote and will not be considered to be outstanding when sending notices of a meeting of stockholders, calculating required votes, determining the presence of a quorum or for other similar purposes, in each case, as applicable and to the extent the holders of such shares of Class A common stock are entitled to any vote.
Requirements for advance notification of stockholder proposals. Stockholders are only permitted to make stockholder proposals with respect to the limited matters on which they are entitled to vote. Further, our bylaws establish advance notice procedures with respect to stockholder proposals relating to the limited matters on which the holders of our Class A common stock may be entitled to vote. Generally, to be timely, a stockholders notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the immediately preceding annual meeting of stockholders. Our bylaws also specify requirements as to the form and content of a stockholders notice. Our bylaws allow the chairman of the meeting at a meeting of the stockholders to adopt rules and regulations for the conduct of meetings, which may have the effect of precluding the conduct of certain business at a meeting if the rules and regulations are not followed. These provisions may deter, delay or discourage a potential acquirer from attempting to influence or obtain control of our company.
Special stockholder meetings. Our certificate of incorporation provides that special meetings of our stockholders may be called at any time only by or at the direction of our board of directors, the Class C Stockholder or, if at any time any stockholders other than the Class C Stockholder are entitled under applicable law or our certificate of incorporation to vote on specific matters proposed to be brought before a special meeting, stockholders owning 50% or more of the voting power of the outstanding stock of the class or classes of stock which are entitled to vote at such meeting. Class A common stock and Class B common stock are considered the same class of common stock for this purpose.
Stockholder action by written consent. Pursuant to Section 228 of the DGCL, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted, unless the certificate of incorporation provides otherwise or it conflicts with the rules of the NYSE. Our certificate of incorporation permits the Class C Stockholder to act by written consent. Under our certificate of incorporation, stockholders (other than the Class C Stockholder) may only act by written consent if consented to by the Class C Stockholder.
Amendments to our certificate of incorporation requiring only Class C Stockholder approval. Except as otherwise expressly provided by applicable law, only the vote of the Class C Stockholder, together with the approval of our board of directors, shall be required in order to amend certain provisions of our certificate of incorporation and none of our other stockholders shall have the right to vote with respect to any such amendments, which include, without limitation:
(1) a change in our name, our registered agent or our registered office;
(2) an amendment that our board of directors has determined to be necessary or appropriate to address changes in U.S. federal income tax regulations, legislation or interpretation;
(3) an amendment that is necessary, in the opinion of our counsel, to prevent us or our directors, officers, trustees or agents from having a material risk of being in any manner subjected to the provisions of the U.S. Investment Company Act of 1940, as amended, the U.S. Investment Advisers Act of 1940, as amended, or plan asset regulations adopted under the U.S. Employee Retirement Income Security Act of 1974, as amended, whether or not substantially similar to plan asset regulations currently applied or proposed by the U.S. Department of Labor;
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(4) an amendment that is a change in our fiscal year or taxable year or that our board of directors has determined is necessary or appropriate as a result of such change;
(5) an amendment that our board of directors has determined to be necessary or appropriate for the creation, authorization or issuance of any class or series of our capital stock or options, rights, warrants or appreciation rights relating to our capital stock;
(6) any amendment expressly permitted in our certificate of incorporation to be voted on solely by the Class C Stockholder acting alone;
(7) an amendment effected, necessitated or contemplated by an agreement of merger, consolidation or other business combination agreement that has been approved under the terms of our certificate of incorporation;
(8) an amendment effected, necessitated or contemplated by an amendment to the partnership agreement of a Blackstone Holdings Partnership that requires unitholders of the Blackstone Holdings Partnership to provide a statement, certification or other proof of evidence regarding whether such unitholder is subject to U.S. federal income taxation on the income generated by the Blackstone Holdings Partnership;
(9) any amendment that our board of directors has determined is necessary or appropriate to reflect and account for our formation of, or our investment in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct of the activities permitted by our certificate of incorporation;
(10) any amendment that reflects a merger into, or conveyance of all of our assets to, another limited liability entity that is newly formed and has no assets, liabilities or operations at the time of the merger or conveyance other than those it receives by way of the merger or conveyance consummated solely to effect a mere change in our legal form, the governing instruments of which provide the stockholders with substantially the same rights and obligations as provided by our certificate of incorporation; or
(11) any other amendments substantially similar to any of the matters described in (1) through (10) above or the immediately following paragraph.
In addition, except as otherwise provided by applicable law, the Class C Stockholder, together with the approval of our board of directors, can amend our certificate of incorporation without the approval of any other stockholder to adopt any amendments that our board of directors has determined:
(1) do not adversely affect the stockholders (other than the Class C Stockholder) considered as a whole (including any particular class or series of stock as compared to other classes or series) in any material respect;
(2) are necessary or appropriate to satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any federal or state or non-U.S. agency or judicial authority or contained in any federal or state or non-U.S. statute (including the DGCL);
(3) are necessary or appropriate to facilitate the trading of our stock or to comply with any rule, regulation, guideline or requirement of any securities exchange on which our stock is or will be listed for trading;
(4) are necessary or appropriate for any action taken by us relating to distributions, splits or combinations of shares of our capital stock under the provisions of our certificate of incorporation; or
(5) are required to effect the intent of or are otherwise contemplated by our certificate of incorporation.
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Super-majority requirements for certain amendments to our certificate of incorporation. Except for amendments to our certificate of incorporation that require only the approval of the Class C Stockholder, any amendments to our certificate of incorporation require, in addition to the consent of the Class C Stockholder, the vote or consent of stockholders holding at least 90% of the voting power of our Class A common stock and Class B common stock, voting together as a single class, unless we obtain an opinion of counsel confirming that such amendment would not affect the limited liability of any stockholder under the DGCL. Any amendment of this provision of our certificate of incorporation also requires the vote or consent of stockholders holding at least 90% in voting power of our Class A common stock and Class B common stock, voting together as a single class.
Merger, sale or other disposition of assets. Our certificate of incorporation provides that we may, with the approval of the Class C Stockholder and with the approval of the holders of at least a majority in voting power of our Class A common stock and Class B common stock, voting together as a single class, sell, exchange or otherwise dispose of all or substantially all of our assets in a single transaction or a series of related transactions, or consummate any merger, consolidation or other similar combination, or approve the sale, exchange or other disposition of all or substantially all of the assets of our subsidiaries, except that no approval of our Class A common stock and Class B common stock shall be required in the case of certain limited transactions involving our reorganization into another limited liability entity. See Common StockVoting Rights. We may in our sole discretion mortgage, pledge, hypothecate or grant a security interest in all or substantially all of our assets (including for the benefit of persons other than us or our subsidiaries) without the prior approval of the holders of our Class A common stock and Class B common stock. We may also sell all or substantially all of our assets under any forced sale of any or all of our assets pursuant to the foreclosure or other realization upon those encumbrances without the prior approval of the holders of our Class A common stock and Class B common stock.
Business Combinations
We have opted out of Section 203 of the DGCL, which provides that an interested stockholder (a person other than the corporation or any direct or indirect majority-owned subsidiary who, together with affiliates and associates, owns, or, if such person is an affiliate or associate of the corporation, within three years did own, 15% or more of the outstanding voting stock of a corporation) may not engage in business combinations (which is broadly defined to include a number of transactions, such as mergers, consolidations, asset sales and other transactions in which an interested stockholder receives or could receive a financial benefit on other than a pro rata basis with other stockholders) with the corporation for a period of three years after the date on which the person became an interested stockholder without certain statutorily mandated approvals.
Transfer Agent and Registrar
The transfer agent and registrar for our Class A common stock is American Stock Transfer & Trust Company, LLC. The transfer agent and registrars address is 6201 15th Avenue, Brooklyn, New York 11219, and its telephone number is (718) 921-8300 or (800) 937-5449.
Listing
Our Class A common stock is listed on the NYSE under the ticker symbol BX.
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Exhibit 10.12
THE BLACKSTONE GROUP INC.
EIGHTH AMENDED AND RESTATED BONUS DEFERRAL PLAN
Purpose
The Blackstone Group Inc., f.k.a. Blackstone Group L.P. (Blackstone), initially adopted the Blackstone Group L.P. Bonus Deferral Plan (the First Plan) as of December 17, 2007, representing a deferred compensation plan for certain eligible employees and senior managing directors of Blackstone and certain of its affiliates in order to provide such individuals with pre-tax deferred incentive compensation awards and thereby enhance the alignment of interests between such individuals and Blackstone and its affiliates. Blackstone previously amended and restated the First Plan, effective as of November 5, 2009, as the Amended and Restated Blackstone Group L.P. Bonus Deferral Plan, effective as of December 14, 2010, as the Second Amended and Restated Blackstone Group L.P. Bonus Deferral Plan, effective as of December 1, 2011, as the Third Amended and Restated Blackstone Group L.P. Bonus Deferral Plan, effective as of December 1, 2012, as the Fourth Amended and Restated Blackstone Group L.P. Bonus Deferral Plan, and effective as of December 1, 2013, as the Fifth Amended and Restated Blackstone Group L.P. Bonus Deferral Plan, as the Sixth Amended and Restated Blackstone Group L.P. Bonus Deferral Plan, effective as of December 1, 2014, and as the Seventh Amended and Restated Blackstone Group Inc. Bonus Deferral Plan, effective as of July 1, 2019 (the First Plan and the subsequent amended and restated versions of the Bonus Deferral Plan, collectively, the Prior Plans). Blackstone is hereby further amending and restating the plan as this Eighth Amended and Restated Blackstone Group Inc. Bonus Deferral Plan, effective as of December 1, 2019 (the Plan). This Plan governs Annual Bonuses (as defined below) earned in respect of 2019 and subsequent calendar years. Annual Bonuses earned in respect of years prior to 2019 are subject to the Prior Plan as in effect with respect to the relevant year for which such Annual Bonus was earned.
ARTICLE I.
DEFINITIONS
As used herein, the following terms have the meanings set forth below.
Affiliated Employer means, except as provided under Section 409A of the Code and the regulations promulgated thereunder, any company or other entity that is related to Blackstone (including Blackstone Administrative Services Partnership L.P.) as a member of a controlled group of corporations in accordance with Section 414(b) of the Code or as a trade or business under common control in accordance with Section 414(c) of the Code.
Annual Bonus means the annual bonus awarded to a Participant with respect to a given Fiscal Year under the applicable annual bonus plan, program, agreement or other arrangement (as designated by the Plan Administrator in its sole discretion); provided that a Participants Annual Bonus for purposes of this Plan shall exclude any bonus or other amount, the payment of which has been guaranteed or promised to the Participant at any time prior to the Annual Bonus Notification Date pursuant to any agreement, plan, program or other arrangement between the Participant and the Firm (a Guaranteed Bonus) unless the document evidencing the Guaranteed Bonus expressly provides for the deferral of all or a specified portion of such
Guaranteed Bonus, in which case such deferral will occur pursuant to the terms and conditions set forth in such document. Notwithstanding the foregoing, if the Plan Administrator determines that the deferral under the Plan of a Participants Guaranteed Bonus likely would result in the imposition of tax or penalties under Section 409A of the Code, the Participants Annual Bonus shall exclude such Guaranteed Bonus.
Annual Bonus Notification Date means the date on which the Firm notifies a Participant of the amount of such Participants Annual Bonus (if any) for the relevant Fiscal Year.
BHP Units means units, each of which consists of one partnership unit in each of Blackstone Holdings I L.P., a Delaware limited partnership, Blackstone Holdings AI L.P., a Delaware limited partnership, Blackstone Holdings II L.P., a Delaware limited partnership, Blackstone Holdings III L.P., a Québec société en commandite, and Blackstone Holdings IV L.P., a Québec société en commandite.
Board means the board of directors of The Blackstone Group Inc., a Delaware corporation.
Bonus Deferral Amount has the meaning set forth in Section 3.01(a).
Cause, with respect to a Participant, has the meaning set forth in the Employment Agreement to which such Participant is a party.
Change in Control means, with respect to the Firm, a Change in Control as defined under the Equity Incentive Plan, to the extent that such event also constitutes a change of control within the meaning of Section 409A of the Code and the regulations and Internal Revenue Service guidance promulgated thereunder.
Code means the Internal Revenue Code of 1986, as amended.
Common Stock means the Class A common stock, par value $0.00001 per share, of Blackstone which are available for issuance under the Equity Incentive Plan.
Competitive Activity means a Participants engagement in any activity that would constitute a violation of any non-competition covenants to which the Participant is subject under the Participants Employment Agreement, determined without regard to the actual duration of such non-competition covenants pursuant to the Employment Agreement.
Deferral Share has the meaning set forth in Section 3.01(b).
Delivery Date shall mean the date upon which shares of Common Stock (or, if applicable, BHP Units, cash or other securities) are delivered with respect to any Deferral Shares, as set forth in Section 5.01.
Disability has the meaning as provided under Section 409A(a)(2)(C)(i) of the Code.
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Employment means (i) a Participants employment if the Participant is an employee of Blackstone or any Affiliated Employer or (ii) a Participants services as a senior managing director of Blackstone or any Affiliated Employer if the Participant is a senior managing director.
Employment Agreement means, with respect to a Participant, the Contracting Employment Agreement (including all schedules and exhibits thereto) or, with respect to a Participant who is a senior managing director, the Senior Managing Director Agreement (including all schedules and exhibits thereto), as applicable, to which such Participant is a party.
Equity Incentive Plan means The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan or such other plan as the Plan Administrator may designate in its sole discretion.
Fair Market Value shall have the meaning given to such term in the Equity Incentive Plan; provided that, with respect to a BHP Unit or other security, if the fair market value of such BHP Unit or other security cannot reasonably be determined pursuant to the foregoing definition, the Fair Market Value of such BHP Unit or other security shall be the value thereof as determined pursuant to a valuation made by the Plan Administrator in good faith and based upon a reasonable valuation method.
Firm means Blackstone and each Participating Employer (individually or collectively as the context requires).
Fiscal Year means the fiscal year of Blackstone.
Investment Date means the January 1 immediately following the Fiscal Year in respect of which a Participants
Annual Bonus is earned, which shall be the date on which such Participants Bonus Deferral Amount is deemed invested in shares of Common Stock in accordance with
Section 3.01(b).
Participant means a participant selected by the Plan Administrator in accordance with Section 2.01 hereof.
Participating Employer means Blackstone and each Affiliated Employer (or division or unit of an Affiliated Employer) that is designated as a Participating Employer by the Plan Administrator and which adopts this Plan.
Person means any individual, partnership, corporation, limited liability company, unincorporated organization, trust, joint venture or enterprise or a governmental agency or political subdivision thereof.
Plan Account has the meaning given to such term in Section 3.01(b).
Plan Administrator means the Compensation Committee of the Board, or such subcommittee thereof or, if the Compensation Committee shall so determine, the Board or such other committee thereof, to whom authority to administer the Plan has been delegated. Additionally, the Plan Administrator may delegate its authority under the Plan to any employee or group of employees of Blackstone or an Affiliate Employer; provided that such delegation is consistent with applicable law and guidelines established by the Board from time to time.
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Retirement means a Participants Separation from Service (whether voluntary or involuntary) after (i) the Participant has reached age sixty-five (65) and has at least five (5) full years of service with the Firm or (ii) (A) the Participants age plus years of service with the Firm totals at least sixty-five (65), (B) the Participant has reached age fifty-five (55) and (C) the Participant has had a minimum of five (5) years of service.
Separation from Service means a Participants separation from service with the Firm within the meaning of Section 409A of the Code and the regulations thereunder.
Vesting Date has the meanings set forth in Sections 4.01(b) and 6.01.
Vesting Period has the meaning set forth in Section 4.01(b).
VWAP means the 30-day volume weighted average trading price of a share of Common Stock (as reported on the national exchange on which the shares of Common Stock are listed on each such date) over the 30-day period (only counting trading days for shares of Common Stock) immediately preceding the relevant measurement date.
ARTICLE II.
PLAN PARTICIPATION
2.01. Plan Participation. Each Fiscal Year, on or prior to the Annual Bonus Notification Date for such Fiscal Year, the Plan Administrator, in its sole discretion, will select Participants from among the employees and senior managing directors of the Participating Employers and will notify such individuals that they have been selected to participate in the Plan for such Fiscal Year. The Plan Administrator may, in its sole discretion, establish different rules and/or sub-plans under the Plan (x) with respect to Participants based outside of the United States and Participants who are employees of, or other service providers for, a nonqualified entity within the meaning of Section 457A of the Code, in each case, in a manner intended to address tax, administrative and securities law considerations with respect to the Firm and such Participants or (y) on such terms as are approved by the Plan Administrator and communicated to the applicable Participants prior to or coincident with the Annual Bonus Notification Date. Such alternate rules and/or sub-plans may include, without limitation, different treatment with respect to timing of vesting and delivery of shares of Common Stock (or, if applicable, BHP Units, cash or other securities) under the Plan and may be set forth in Schedules to be attached hereto from time to time.
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ARTICLE III.
DEFERRALS
3.01. Bonus Award Deferrals.
(a) With respect to a given Fiscal Year commencing with the Fiscal Year ending December 31, 2019, and for each Participant selected to participate in the Plan in accordance with Section 2.01 hereof, a portion of the Annual Bonus (excluding any portion thereof that is being separately deferred pursuant to this Plan or any other agreement, plan, program or other arrangement between the Participant and the Firm) for the Fiscal Year shall be deferred (his or her Bonus Deferral Amount) in accordance with the following table (or such other table that may be adopted by the Plan Administrator prior to or coincident with the Annual Bonus Notification Date):
Portion of Annual Bonus |
Marginal Deferral
Rate Applicable to Such Portion |
Effective Deferral
Rate for Entire Annual Bonus* |
||||||
$0 - 100,000 |
0.0 | % | 0.0 | % | ||||
$100,001 - 200,000 |
15.0 | % | 7.5 | % | ||||
$200,001 - 500,000 |
20.0 | % | 15.0 | % | ||||
$500,001 - 750,000 |
30.0 | % | 20.0 | % | ||||
$750,001 - 1,250,000 |
40.0 | % | 28.0 | % | ||||
$1,250,001 - 2,000,000 |
45.0 | % | 34.4 | % | ||||
$2,000,001 - 3,000,000 |
50.0 | % | 39.6 | % | ||||
$3,000,001 - 4,000,000 |
55.0 | % | 43.4 | % | ||||
$4,000,001 - 5,000,000 |
60.0 | % | 46.8 | % | ||||
$5,000,000 + |
65.0 | % | 52.8 | % |
* |
Effective Deferral Rates are shown for illustrative purposes only and are based on an Annual Bonus equal to the maximum amount in the range shown in the far left column (which is assumed to be $7,500,000 for the last range shown). |
For purposes of determining the Bonus Deferral Amount pursuant to the above table, (i) a Participants total annual incentive compensation shall be taken into account (including, without limitation, performance incentive fees earned in connection with Firm sponsored investment funds), although the Bonus Deferral Amount shall only reduce (but not below zero) the amount of the Annual Bonus otherwise payable in cash on a current basis and (ii) the amount subject to deferral pursuant to the above table shall be reduced (but not below zero) by an amount equal to the deemed pre-tax value (using an assumed 50% tax rate) of the Participants annual mandatory contributions to Firm sponsored investment funds with respect to the Fiscal Year for which the Annual Bonus was earned.
Notwithstanding the foregoing: (i) if a Participants Annual Bonus includes a Guaranteed Bonus, such Participants Bonus Deferral Amount shall be equal to (x) the portion of the Guaranteed Bonus which the document evidencing the Guaranteed Bonus states will be deferred, plus (y) a portion of the amount (if any) by which the Participants Annual Bonus exceeds his or her Guaranteed Bonus, determined pursuant to the table above and (ii) the Firm reserves the right to change the method by which a Participants Bonus Deferral Amount will be calculated with respect to any Annual Bonus by notifying the Participant in writing in advance of the Annual Bonus Notification Date for such Annual Bonus. Deferral of each Participants Bonus Deferral Amount for the relevant Fiscal Year shall be automatic and mandatory and shall occur immediately prior to the Investment Date for such Fiscal Year. The excess of the Participants Annual Bonus for the relevant Fiscal Year over his or her Bonus Deferral Amount for such Fiscal Year shall be paid to the Participant on such date and in the same manner as such Participants Annual Bonus would have been paid to him or her if he or she was not a Participant in the Plan with respect to such Fiscal Year.
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(b) On the Investment Date, the Participants entire Bonus Deferral Amount corresponding to such Investment Date shall automatically and mandatorily be notionally invested in the number of shares of Common Stock (the Participants Deferral Shares) that is equal to such Bonus Deferral Amount divided by the VWAP of a share of Common Stock as of the corresponding Annual Bonus Notification Date, rounded up to the nearest whole number. The Firm will keep on its books and records an account for each Participant (his or her Plan Account), in which the Firm will record the number of Deferral Shares credited to such Participant.
ARTICLE IV.
VESTING
4.01. Vesting.
(a) Deferral Shares. Subject to Article VI, and except as otherwise provided in Sections 6.01(f) and 6.01(g), one-third of the Deferral Shares granted to a Participant in respect of a given Investment Date will vest (but will only be deliverable pursuant to Article V) on the January 1 that immediately follows the end of each of the first, second and third Fiscal Years after the Fiscal Year to which the relevant Annual Bonus relates, subject to the Participant remaining continuously Employed with the Firm through the applicable Vesting Date (or on such other vesting schedule selected by the Plan Administrator and communicated to the Participant prior to or coincident with the Annual Bonus Notification Date or as otherwise set forth in prior versions of this Plan). For the avoidance of doubt, Deferral Shares shall not be eligible for partial-year vesting.
(b) Vesting Date; Vesting Period. For purposes of this Plan, and except as otherwise provided in Sections 6.01(f) and 6.01(g), the date upon which all or a portion of a Participants Deferral Shares vest in accordance with the provisions of this Section 4.01 shall be referred to as the Vesting Date for such Deferral Shares. The period between the Investment Date in respect of which a Deferral Share is granted and the Vesting Date on which such Deferral Share vests in accordance with the provisions hereof shall be referred to as the Vesting Period.
ARTICLE V.
DELIVERY OF UNITS
5.01. Delivery Generally. The shares of Common Stock (or, if applicable, BHP Units, cash or other securities) underlying the Deferral Shares shall generally be delivered to Participants on a date intended to coincide with a date upon which the underlying shares of Common Stock (or, if applicable, BHP Units or other securities) may next be traded or converted by the Participant (subject to further restrictions due to Firm policies in place at such time) as set forth below:
(a) Window Period for Delivery of Deferral Shares. The Delivery Date for each Deferral Share shall be a date selected by the Plan Administrator which falls between the first February 1 and March 1 following the Vesting Date applicable to such Deferral Share.
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(b) Form of Delivery. On the applicable Delivery Date, or as soon as reasonably practicable after such Delivery Date (but in no event more than ten (10) business days after such Delivery Date), the Firm shall issue to the Participant, in full settlement of the Firms obligations with respect to the deliverable portion of the Participants Deferral Shares, the number of shares of Common Stock subject to such Deferral Shares (or, at the Plan Administrators sole discretion, which will likely be only in rare occasions, an amount in cash equal to the VWAP of such number of shares of Common Stock as of the date of such payment). Notwithstanding the foregoing, if the Plan Administrator determines, in its sole discretion, that the issuance of shares of Common Stock may raise tax, securities law or administrative concerns to the Firm or the Participant, then distributions to such Participant hereunder shall not be made in shares of Common Stock but instead (in the Plan Administrators sole discretion, which will likely be only in rare occasions), may be made in BHP Units or other securities, as determined by the Plan Administrator.
5.02. Issuance of Units. The issuance of any shares of Common Stock (or, if applicable, BHP Units) to a Participant pursuant to the Plan shall be effectuated by recording the Participants ownership of such shares of Common Stock (or, if applicable, BHP Units) in a book-entry or similar system utilized by the Firm as soon as practicable following the Delivery Date applicable thereto. Any shares of Common Stock (or, if applicable, BHP Units) issued to a Participant hereunder will be held in an account administered by the Firms equity plan administrator or such other account as the Plan Administrator may determine in its discretion. No Participant shall have any rights as an owner with respect to any shares of Common Stock (or, if applicable, BHP Units) under the Plan prior to the date on which the Participant becomes entitled to delivery of such shares of Common Stock (or, if applicable, BHP Units) in accordance with Section 5.01. The Plan Administrator may, in its sole discretion, cause the Firm to defer the delivery of any shares of Common Stock (or, if applicable, BHP Units, cash or other securities) pursuant to this Plan as the Plan Administrator deems necessary to ensure compliance under federal or state securities laws or to avoid adverse tax or other consequences to the Firm or the Participant.
5.03. Taxes and Withholding. As a condition to any payment or distribution pursuant to this Plan, the Firm may require a Participant to pay such sum to the Firm as may be necessary to discharge the Firms obligations with respect to any taxes, assessments or other governmental charges, whether of the United States or any other jurisdiction, which the Firm reasonably expects will be imposed as a result of such payment or distribution. In the discretion of the Firm, the Firm may deduct or withhold such sum from such payment or distribution (including by deduction or withholding of shares of Common Stock (or, if applicable, BHP Units or other securities), provided that the amount the Firm deducts or withholds shall not (unless otherwise determined by the Plan Administrator) exceed the Firms minimum statutory withholding obligations. Alternatively, the Firm may elect to satisfy the tax withholding obligations by advancing and remitting its own funds on behalf of the Participant to the applicable tax authorities, in which case the Participant shall be required to repay such amounts to the Firm within 5 days of such remittance, together with interest thereon based on the Firms cost of funds as determined by Blackstone Treasury from time to time. As of November 5, 2009, this rate will equal the prime rate (as published in the Wall Street Journal) for JPMorgan Chase (or any successor) plus 500 basis points (or a comparable rate as determined by Blackstone or such Affiliate). In the event that the Firm plans to advance a tax withholding remittance on behalf of the Participant as described in the preceding sentence, the Firm shall provide the Participant with reasonable advance notice to permit the Participant to remit the required funds in cash to the Firm prior to the required withholding date and thereby avoid the need to have the Firm advance its own funds to the tax authorities.
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5.04. Liability for Payment. Each Participating Employer shall be liable for the amount of any distribution or payment owed to a Participant pursuant to Section 5.01 who is Employed by such Participating Employer during the relevant Vesting Period; provided, however, that in the event that a Participant is Employed by more than one Participating Employer during the relevant Vesting Period, each Participating Employer shall be liable for its allocable portion of such distribution or payment.
ARTICLE VI.
TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL
6.01. Termination of Employment. In the event that a Participants Employment with the Firm is terminated, or a Change in Control occurs, in either case prior to the Vesting Date or Delivery Date that would otherwise apply to any of such Participants Deferral Shares, vesting and delivery (if any) of such Deferral Shares shall be governed by this Section 6.01.
(a) Termination by the Firm For Cause. Upon termination of a Participants Employment by the Firm for Cause, such Participants Deferral Shares (vested and unvested) shall be forfeited without any payment.
(b) Termination by the Firm Without Cause. Upon termination of a Participants Employment with the Firm without Cause at such time as the Participant does not qualify for Retirement, such Participants unvested Deferral Shares shall immediately vest (in which case, the date of the Participants termination without Cause shall be referred to as the Vesting Date for such Deferral Shares) and be delivered to the Participant in accordance with Article V.
(c) Resignation. In the event that a Participant resigns from the Firm (and such resignation does not constitute Retirement), such Participants unvested Deferral Shares shall be forfeited without payment.
(d) Retirement. In the event of a Participants Retirement from the Firm, all of such Participants unvested Deferral Shares shall continue to vest in accordance with Article IV, and shall continue to be delivered to the Participant in accordance with Article V, as though the Participant remained continuously Employed with the Firm through the end of the Vesting Period; provided that if, following a termination of his or her Employment with the Firm as described in this Section 6.01(d), such Participant breaches any applicable provision of the Employment Agreement to which the Participant is a party or otherwise engages in any Competitive Activity, such Participants Deferral Shares which remain undelivered as of the date of such violation or engagement in Competitive Activity, as determined by the Plan Administrator in its sole discretion, will be forfeited without payment. As a pre-condition to a Participants right to continued vesting following Retirement, the Plan Administrator may require the Participant to certify in writing prior to each scheduled Vesting Date that the Participant has not breached any applicable provisions of the Participants Employment Agreement or otherwise engaged in any Competitive Activity.
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(e) Disability. In the event that a Participants Employment with the Firm is terminated due to the Participants Disability, such Participants unvested Deferral Shares shall immediately vest (in which case, the date of the Participants termination due to Disability shall be referred to as the Vesting Date for such Deferral Shares) and be delivered to the Participant in accordance with Article V.
(f) Death. In the event of a Participants death during his or her Employment with the Firm, or during the period following termination of Employment in which his or her Deferral Shares remain subject to vesting pursuant to this Section 6.01, such Participants Deferral Shares which remain unvested as of (and have not been forfeited prior to) the date of the Participants death shall immediately vest and, together with any previously vested but undelivered Deferral Shares, become deliverable to the Participants estate as of the date of the Participants death (in which case, the date of the Participants death shall be referred to as the Vesting Date for such Deferral Shares).
(g) Change in Control. Notwithstanding anything to the contrary herein, in the event of a Change in Control, such Participants Deferral Shares which remain unvested as of the date of such Change in Control shall immediately vest and become deliverable as of the date of such Change in Control (in which case, the date of such Change in Control shall be referred to as the Vesting Date for such Deferral Shares).
(h) Section 409A: Separation from Service. References in this Section 6.01 to a Participants termination of Employment shall refer to the date upon which the Participant has a Separation from Service.
6.02. Nontransferability. No benefit under the Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge or encumbrance, other than by will or the laws of descent and distribution. Any attempt to violate the foregoing prohibition shall be void: provided, however, that a Participant may transfer or assign any vested interest hereunder in connection with estate planning and administration with the express written consent of the Plan Administrator.
ARTICLE VII.
ADMINISTRATION
7.01. Plan Administrator. The Plan shall be administered by the Plan Administrator. The Plan Administrator shall have discretionary authority to interpret the Plan, to make all legal and factual determinations and to determine all questions arising in the administration of the Plan, including without limitation the reconciliation of any inconsistent provisions, the resolution of ambiguities, the correction of any defects, and the supplying of omissions. Each interpretation, determination or other action made or taken pursuant to the Plan by the Plan Administrator shall be final and binding on all persons.
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7.02. Indemnification. The Plan Administrator shall not be liable to any Participant for any action or determination. The Plan Administrator shall be indemnified by the Firm against any liabilities, costs, and expenses (including, without limitation, reasonable attorneys fees) incurred by him or her as a result of actions taken or not taken in connection with the Plan.
ARTICLE VIII.
AMENDMENTS AND TERMINATION
8.01. Modification; Termination. The Plan Administrator may alter, amend, modify, suspend or terminate the Plan at any time in its sole discretion, to the extent permitted by Section 409A of the Code. No further deferrals will occur under the Plan after the effective date of any such suspension or termination. Following any such termination, the Participants Deferral Shares will continue to vest and be delivered, or be forfeited, as otherwise provided herein. Notwithstanding the foregoing, no alteration, amendment or modification of the Plan shall adversely affect the rights of the Participant in any amounts or units accrued by or credited to such Participant prior to such action without the Participants written consent unless the Plan Administrator determines, in its sole discretion, that such alternation, modification or amendment is necessary for the Plan to comply with the requirements of Section 409A of the Code and the regulations promulgated thereunder.
8.02. Required Delay. Notwithstanding any provision to the contrary, if pursuant to the provisions of Section 409A of the Code any distribution or payment is required to be delayed as a result of a Participant being deemed to be a specified employee within the meaning of that term under Section 409A(a)(2)(B) of the Code, then any such distributions or payments under the Plan shall not be made or provided prior to the earlier of (A) the expiration of the six month period measured from the date of the Participants Separation from Service or (B) the date of the Participants death. Upon the expiration of such period, or the date of such Participants death, as applicable, all distributions or payments under the Plan delayed pursuant to this Section 8.02 shall be delivered or paid to the Participant (or the Participants estate, as applicable) in a lump sum, and any remaining distributions or payments due under the Plan shall be paid or delivered in accordance with the normal Delivery Dates specified for such distributions or payments herein.
ARTICLE IX.
GENERAL PROVISIONS
9.01. Unfunded Status of the Plan. The Plan is unfunded. A Participants rights under the Plan (if any) shall represent at all times an unfunded and unsecured contractual obligation of each Participating Employer that Employed Participant during the Vesting Periods and through the Delivery Dates applicable to such Participants Deferral Shares. Each Participant and his or her estate and/or beneficiaries (if any) will be unsecured creditors of each Participating Employer with which such Participant is or was Employed with respect to any obligations owed to such Participant, estate and/or beneficiaries under the Plan. Amounts deliverable or payable under the Plan will be satisfied solely out of the general assets of the applicable Participating Employer subject to the claims of its creditors. None of a Participant, his or her estate, his or her beneficiaries (if any) nor any other person shall have any right to receive any payment or distribution under the Plan except as, and to the extent, expressly provided in the Plan. No Participating Employer will segregate any funds or assets to provide for any payment or
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distribution under the Plan or issue any notes or security for any such distribution or payment. Any reserve or other asset that a Participating Employer may establish or acquire to assure itself of the funds to provide distributions or payments required under the Plan shall not serve in any way as security to any Participant or the estate or beneficiary of a Participant for the performance of the Participating Employer under the Plan.
9.02. No Right to Continued Employment. Neither the Plan nor any action taken or omitted to be taken pursuant to or in connection with the Plan shall be deemed to (i) create or confer on a Participant any right to be retained in the employ of the Firm, (ii) interfere with or to limit in any way the Firms right to terminate the Employment of a Participant at any time, (iii) confer on a Participant any right or entitlement to compensation in any specific amount for any future Fiscal Year or (iv) affect, supersede, amend or change the Employment Agreement (or any other agreement between the Participant and the Firm). In addition, selection of an individual as a Participant for a given Fiscal Year shall not be deemed to create or confer on the Participant any right to participate in the Plan, or in any similar plan or program that may be established by the Firm, in respect of any future Fiscal Year.
9.03. No Stockholder or Ownership Rights Prior to Delivery of Shares; Dividend Equivalent Payments.
(a) Except as set forth in Section 9.03(b), Participants shall not have voting, dividend, cash distribution or any other rights as a holder of shares of Common Stock (or, if applicable, BHP Units) until the issuance or transfer thereof to the Participant. For the avoidance of doubt, Deferral Shares represent an unfunded and unsecured right to receive shares of Common Stock (or, if applicable, BHP Units, cash or other securities) on an applicable Delivery Date and, until such Delivery Date, the Participant shall have no ownership rights with respect to the shares of Common Stock, BHP Units, cash or other securities underlying such Deferral Shares.
(b) Participants shall be entitled to receive dividend equivalent payments paid on a current basis with respect to their outstanding Deferral Shares (whether vested or unvested) in form and amounts corresponding to the payments that such Participants would have received as dividend payments if they directly held the shares of Common Stock (or, if applicable, BHP Units) underlying such outstanding Deferral Shares on the relevant dividend payment date. A Participants right to receive such dividend equivalent payments with respect to Deferral Shares shall cease upon the forfeiture or settlement of such Deferral Shares.
9.04. Right to Offset. The Firm shall have the right to deduct from amounts owed to a Participant under the Plan the amount of any deficit, debt or other liability or obligation of any kind which the Participant may at that time have with respect to the Firm; provided, however, that no such right to deduct or offset shall arise or otherwise be deemed to arise until the date upon which shares of Common Stock (or, if applicable, BHP Units, cash or other securities) are deliverable or payable hereunder and any such deduction or offset shall be implemented in a manner intended to avoid subjecting the Participant to additional taxation under Section 409A of the Code.
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9.05. Successors. The obligations of the Firm under this Plan shall be binding upon the successors of the Firm.
9.06. Governing Law. The Plan shall be subject to and construed in accordance with the laws of the State of New York.
9.07. Arbitration; Venue. Any dispute, controversy or claim between any Participant and the Firm arising out of or concerning the provisions of this Plan shall be finally resolved in accordance with the arbitration provisions (and the jurisdiction, venue and similar provisions related thereto) of the Employment Agreement to which such Participant is a party.
9.08. Construction. The headings in this Plan have been inserted for convenience of reference only and are to be ignored in any construction of any provision hereof. Use of one gender includes the other, and the singular and plural include each other.
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Exhibit 10.82
AIRCRAFT DRY LEASE AGREEMENT
THIS AIRCRAFT DRY LEASE AGREEMENT (this Agreement) is made and entered on between GH4 Partners LLC, a Delaware limited liability company (Lessor) and Blackstone Administrative Services Partnership L.P., a Delaware limited partnership (Lessee) (collectively the Parties).
W I T N E S S E T H:
WHEREAS, Lessor owns a 2012 Bombardier Inc. model BD-700-1A10 (Global 6000) aircraft, manufacturers serial number 9519 aircraft, with FAA Registration number N898MJ, as described more fully in Section 1.1 below; and
WHEREAS, Lessor desires to dry lease the Aircraft to Lessee from time to time on a non-exclusive periodic basis; and Lessee desires to dry lease the Aircraft from Lessor from time to time.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and undertakings herein contained, the Parties hereto do hereby agree as follows:
ARTICLE 1: LEASE AND TERM
1.1. Lease. Lessor hereby agrees to dry lease to Lessee, from time to time, and Lessee hereby agrees to dry lease from Lessor, from time to time, one (1) 2012 Bombardier Inc. model BD-700-1A10 (Global 6000) aircraft, manufacturers serial number 9519 aircraft, with FAA Registration number N898MJ (the Airframe), equipped with two (2) Rolls-Royce Deutschland Ltd & Co KG model BR710A2-20 engines bearing manufacturers serial numbers 22167 and 22166 (the Engines), together with all components, accessions, systems, appliances, parts, instruments, accessories, furnishings, and any manufacturers or third-party warranties, any manufacturer service programs in connection with the Aircraft and other equipment installed thereon or attached thereto on the date hereof, all specified avionics, equipment, spare parts and loose equipment and all logs, weight and balance documents, wiring diagrams, manuals and other records and documentation pertaining to the operation and maintenance of such aircraft in Lessors possession or under its control (Aircraft Documentation) (the foregoing, together with the Airframe and Engines, collectively, the Aircraft) to Lessee hereunder. Changes to the U.S. registration mark of the Aircraft shall have no effect on this Agreement.
1.2. Term and Rental Periods. The Term of this Agreement (Term) shall commence on (the Effective Date) and shall be effective until . Lessee may dry lease the Aircraft pursuant to this Agreement for specific periods of time during the Term (Rental Periods). No Rental Period shall be for more than thirty (30) days.
ARTICLE 2: RENTAL AND EXPENSES
2.1. Rental Payment. Lessee agrees to pay to Lessor an hourly rental fee for occupied business flight hours at a rental rate of ($ ) per flight hour (prorated for fractions) of operation during each Rental Period (the Rental Payment). The hourly rental fee may be adjusted by mutual agreement during the Term based on fair market pricing. Such rental fees include delays, detours, cancellations caused by weather, routing, maintenance or other similar occurrences during each Rental Period, except that Lessor, at its sole discretion, may reduce the rental fees in the event of such occurrences. In addition, Lessee shall pay a two-hour minimum rental fee per flying day during a Rental Period, except for (i) short positioning flights the night before or (ii) when flying time exceeds two hours, in which case only the actual flying time will be charged. There shall be no minimum daily charge for nonflying days during a Rental Period.
2.2. Positioning, Repositioning. Lessee shall be responsible for accepting the Aircraft from Lessor, and returning the Aircraft to Lessor at Teterboro Airport (Home Base), or other airport agreed between the Parties. Lessee may commence or return the Aircraft at locations other than Home Base. However, in such circumstances, the Rental Period shall include positioning flights from Home Base or repositioning flights back from Home Base and positioning/repositioning flights that are of equal or lesser distance than flights to/from Home Base. If position/repositioning would exceed the distance to from/to Home Base, the Rental Payment shall be reduced pro-rata for that excess distance. Two hour minimums shall not apply to positioning flights.
2.3. Lessee Reimbursement for Fuel and Incidental Charges. Lessee shall be responsible for fuel and incidental charges for any flight hours during the Rental Period (Incidental Charges). Such Incidental Charges include but are not limited to hangaring and tie down charges away from the Home Base, landing fees, federal excise taxes, airport taxes or similar charges, customs, immigration and similar charges related to international flights; and any additional insurance premiums required for specific flights during the Rental Period. In the event any such charges are inadvertently made to Lessor by service providers, Lessee shall promptly reimburse Lessor for such costs. Lessor shall instruct service providers to invoice Lessee in the future.
2.4. Lessor Reimbursement for Certain Charges. Lessor has incorporated the cost for maintenance and repairs into the Rental Payment. In the event any charges for maintenance are paid directly by Lessee, Lessor shall promptly reimburse Lessee for such cost, or deduct as an offset against Rental Payments such costs.
2.5. Invoicing and Payment. Lessor will send Lessee invoices for such payments as are due under this Article for each Rental Period, using the form attached as Appendix A or other form at Lessors discretion. Lessee shall make payment by check or money order payable to GH4 Partners LLC payable upon receipt, or shall wire transfer funds to the address specified on the invoice.
2.6. Calculation of Hours of Operation. For purposes of Rental Payments, hours of operation for each Rental Period shall be calculated from the time the Aircraft takes off to the time it lands.
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2.7. Taxes. All payments, including specifically Rental Payments made by Lessee hereunder, shall be made free and clear of, and without deduction for, any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, restrictions or conditions now or hereafter imposed by any governmental or taxing authority. Taxes which the Lessee may incur while operating the Aircraft include, but are not limited to: fuel excise taxes, airport taxes, sales and use taxes, over flight fees or taxes, and customs duties, or other foreign taxes relating to international travel, which may be included on Lessors invoices to Lessee. Notwithstanding the foregoing, Lessee shall only be liable for taxes on lease payments actually made and not on the value of the Aircraft.
2.8. Procedure to Request Rental of Aircraft. Lessee shall make requests for rental of the Aircraft to Lessor either orally or in writing. Requests should be made as far in advance as possible before the intended commencement of the Rental Period.
2.9. Availability. Lessor is making the Aircraft available to Lessee for dry lease on an as available basis only, and makes no guarantee or warranty with regard to Aircraft availability. Lessor will, in good faith, attempt to make the Aircraft available when it is not otherwise being used by Lessor, another lessee, or is unavailable for maintenance or other reasons.
2.10. Non-availability or Delay Due to Unanticipated Causes. Lessor shall promptly notify Lessee in writing if the Aircraft cannot be delivered for a Rental Period due to an unanticipated delay, such as weather or mechanical related delays. Lessor shall not be responsible for any loss, injury, damage, delay, or cancellation, or any consequential or incidental damages or costs incurred by Lessee caused by such delay or cancellation.
ARTICLE 3: OPERATION OF AIRCRAFT BY LESSEE
3.1. Operational Control. During each Rental Period, Lessee is and shall be the sole operator of the Aircraft and has sole operational control of the Aircraft and Lessee has possession, command and control of the Aircraft. During each Rental Period, Lessee is responsible for operating the Aircraft in accordance and compliance with all laws, ordinances and regulations relating to the possession, use, operation, or maintenance of the Aircraft, including, but not limited to, Part 91 of the Federal Aviation Regulations (FAR).
3.2. Selection of Flight Crew. Lessee shall select and hire its own flight crew provided that the pilots shall be professionally trained and qualified, shall be familiar with and licensed to operate the Aircraft, and shall have current medical certificates, and recurrent training.
3.3. Care and Use. Lessee shall use and operate the Aircraft in a careful and proper manner. Lessee shall operate the Aircraft in accordance with the flight manual and all manufacturers suggested operating procedures. Lessee shall not operate, use, or maintain the Aircraft in violation of any airworthiness certificate, license, or registration relating to the Aircraft, or contrary to any law or regulation.
3.4. Limits of Operations. Lessee expressly warrants and agrees that it shall not operate the Aircraft outside the geographic limits set forth in the Insurance Policies (defined below), or otherwise operate the Aircraft in a way that would violate or compromise the Insurance Policies. Lessee shall use the Aircraft only for and on account of its business, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for compensation or hire (except in accordance with the provisions of FAR 91.501), or for any illegal purpose.
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3.5. Documentation. Lessee shall complete required flight logs, maintenance logs, or other recording entries required by the FAR during any Rental Period.
3.6. Maintenance and Repair. Lessor, at its own cost and expense, will promptly repair or replace all parts, appliances, components, instruments, accessories, and furnishings that are installed in or attached to the Aircraft (herein called Parts) that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair, or permanently rendered unfit for use for any reason whatsoever during a Rental Period. Further, Lessor shall reimburse Lessee for any mechanics liens or other costs incurred by Lessee associated with non-routine repairs or maintenance made during a Rental Period, provided that: (1) such repairs shall be made by an FAA approved repair facility; and (2) Lessor shall approve in advance such repairs or maintenance. Lessee covenants to repair any damage beyond ordinary wear and tear caused by Lessees use of the Aircraft.
3.7. Right to Inspect. Lessor and its authorized representatives shall, at all reasonable times, have the right to enter the premises where the Aircraft may be located for the purpose of inspecting and examining the Aircraft, its condition, use and operation, and the books and records of Lessee relating thereto to ensure Lessees compliance with its obligations under this Agreement. Notwithstanding the foregoing rights, Lessor has no duty to inspect and shall not incur any liability or obligation by reason of not making any such inspection.
ARTICLE 4: INSURANCE AND LIABILITY
4.1. Primary Liability and Property Damage Insurance. Lessor shall maintain in effect, at its own expense, third party Aircraft liability insurance, passenger legal liability insurance, and property damage liability insurance during the Term in such amounts as are customary for similarly situated aircraft. Each liability policy shall be primary without right of contribution from any other insurance that is carried by Lessee, and expressly shall provide that all the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
4.2. Insurance Against Physical Damage. Lessor shall maintain in effect, at its own expense, all-risk ground and flight Aircraft hull insurance covering the Aircraft. Any such insurance shall be during the Term for an amount customary for a similar aircraft.
4.3. Lessee As Named Insured. All insurance policies carried by Lessor in accordance with this Article (the Insurance Policies) shall name Lessee as a named insured, excepting that with respect to hull insurance, Lessee shall not be a loss payee.
4.4. Deductible. Any Insurance Policy carried by Lessor in accordance with this Article may be subject to a deductible amount which is customary under policies insuring similar aircraft similarly situated. Lessor warrants and agrees that in the event of an insurable claim, Lessor will bear the costs up the deductible amount.
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4.5. Additional Insurance for Lessee. Lessee may, at its discretion, obtain additional insurance covering its operation of the Aircraft.
4.6. Certificate of Insurance. Upon request, Lessor shall deliver to Lessee a certificate of insurance evidencing the insurance required to be maintained by Lessor under this Article.
4.7. Mutual Waiver of Liability Claims. Except as specifically set forth in this Agreement, Lessor and Lessee each hereby agree that each shall hold harmless the other Party, and the other Partys respective officers, directors, agents, employees, servants, attorneys, insurers, coinsurers, reinsurers, indemnitors, parents, subsidiaries, affiliates, predecessors, successors, and assigns from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including reasonable legal fees and expenses, of whatsoever kind and nature including, without limitation, personal injury or death (Liabilities), that could be asserted by that Party against the other Party directly or indirectly (including but not limited to claims raised against that Party by any third-party, employee, agent, or other person or entity not a party to the Agreement) arising out of the lease, sublease, possession, rental, use, condition, operation, transportation, return, storage or disposition of the Aircraft or any part thereof (including, without limitation, Liabilities in any way relating to or arising out of latent or other defects, whether or not discoverable by a Party or any other person, injury to persons or property, or strict liability in tort), provided, however, that neither Party shall be required to hold harmless the other Party for Liabilities resulting from the gross negligence or willful misconduct of the other Party.
ARTICLE 5: WARRANTIES AND DISCLAIMERS
5.1. Lessors Warranty. Lessor warrants that (1) the Aircraft shall be delivered to Lessee in airworthy condition; (2) the Aircraft is properly registered in accordance with U.S. law; and (3) Lessor is a citizen of the United States of America as set forth in 49 U.S.C. Section 40102(15) and the regulations thereunder.
5.2. Lessors Disclaimer of Warranties. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS, AND LESSEE EXPRESSLY WAIVES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, WORKMANSHIP, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF.
5.3. Lessees Representation Regarding Selection. Lessee represents and warrants that: (1) it has selected the Aircraft based on its own judgment and disclaims any reliance upon statements or representations not part of this Agreement; and (2) that the Aircraft is of a size, design and capacity selected by Lessee and is suitable for Lessees intended use.
BLACKSTONE DRY LEASE - PAGE 5 OF 9
5.4. Lessee Warranty Regarding Operation. Lessee represents and warrants that it shall only operate the Aircraft under the terms, conditions, and restrictions, as set forth in this Agreement.
ARTICLE 6: MISCELLANEOUS
6.1. Title. Title to the Aircraft shall remain vested in Lessor during the Agreement Term and the Aircraft shall be registered at the FAA in the name of Lessor. Lessee shall have no right, title or interest in or to the Aircraft except as expressly provided herein and shall take no action that would impair the continued registration of the Aircraft at the FAA in the name of Lessor. Lessee shall not file or record this Agreement with the FAA. Lessee shall do or cause to be done any and all acts and things which may be required to perfect and preserve the interest and title of Lessor to the Aircraft within any jurisdiction in which Lessee may operate the Aircraft, and Lessee shall also do or cause to be done any and all acts and things which may be required under the terms of any other agreement, treaty, convention, pact or by any practice, customs or understanding involving any country or state in which Lessee may operate, as may be necessary or helpful, or as Lessor may reasonably request, to perfect and preserve the rights of Lessor within the jurisdiction of any such country or state.
6.2. Liens. Except as provided herein, Lessee will not directly or indirectly create, incur, assume or suffer to exist any liens on or with respect to (1) the Aircraft or any part thereof; (2) Lessors title thereto; or (3) any interest of Lessor therein. Lessee will promptly, at its own expense, take such action as may be necessary to discharge any such lien. Lessee may incur the following liens: (i) the respective rights of Lessor and Lessee as herein provided; (ii) liens created by Lessor; (iii) liens for taxes either not yet due or being contested by Lessee in good faith; and (iv) inchoate materialmens, mechanics, workmens, repairmens, employees or other like liens arising in the ordinary course of business of Lessee, or Parties acting on behalf of Lessee insofar as such actions relate to the Aircraft and are not inconsistent with this Agreement, not delinquent, and for the payment of which adequate reserves have been provided.
6.3. Defaults.
(a) Each of the following events shall constitute an Event of Default hereunder (whatever the reason for such event of default and whether it shall be voluntary or involuntary, or come about or be effected by operation of law, or be pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) if Lessee shall fail to pay when due any sum under this Agreement and such failure shall continue for a period of three business days after oral, facsimile, electronic mail or written notice has been given by Lessor to Lessee; (2) if Lessee shall fail to perform any covenant or agreement contained herein, and such failure shall continue for a period of fifteen (15) calendar days after notice thereof shall have been given in writing; (3) if any representation or warranty made by Lessee in this Agreement or any agreement, document or certificate delivered by the Lessee in connection herewith is or shall become incorrect in any material respect; (4) if Lessee shall operate the Aircraft in violation of any applicable law, regulation, rule or order of any governmental authority having jurisdiction thereof or shall operate the Aircraft
BLACKSTONE DRY LEASE - PAGE 6 OF 9
when the insurance required hereunder shall not be in effect; (5) if any proceedings shall be commenced under any bankruptcy, insolvency, reorganization, readjustment of debt, receivership or liquidation law or statute of any jurisdiction; or (6) if any such proceedings shall be instituted against either Party and shall not be withdrawn or terminated within thirty (30) calendar days after their commencement.
(b) Upon the occurrence of any Event of Default Lessor may, at its option, exercise any or all remedies available at law or in equity, including, without limitation, any or all of the following remedies, as Lessor in its sole discretion shall elect: (1) by notice in writing to terminate this Agreement immediately, whereupon all rights of the Lessee to the use or possession of the Aircraft or any part thereof shall absolutely cease and terminate but Lessee shall remain liable as hereinafter provided; and thereupon Lessee, if so requested by Lessor, shall at its expense promptly return the Aircraft and Aircraft Documentation as required by this Agreement or Lessor, at its option, may enter upon the premises where the Aircraft or Aircraft Documentation are located and take immediate possession of and remove the same by summary proceedings or otherwise. Lessee specifically authorizes Lessors entry upon any premises where the Aircraft or Aircraft Documentation may be located for the purpose of, and waives any cause of action it may have arising from, a peaceful retaking of the Aircraft or Aircraft Documentation; or (2) perform or cause to be performed any obligation, covenant or agreement of Lessee hereunder. Lessee agrees to pay all costs and expenses incurred by Lessor for such performance and acknowledges that such performance by Lessor shall not be deemed to cure said Event of Default.
(c) Lessee shall be liable for all costs, charges and expenses, including reasonable legal fees and disbursements, incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessors remedies with respect thereto. No remedy referred to herein is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity. Lessor shall not be deemed to have waived any default, Event of Default or right hereunder unless the same is acknowledged in writing by duly authorized representative of Lessor. No waiver by Lessor of any default or Event of Default hereunder shall in any way be, or be construed to be, a waiver of any future or subsequent default or Event of Default. The failure or delay of Lessor in exercising any rights granted it hereunder upon any occurrence of any such right upon the continuation or recurrence of any such contingencies or similar contingencies, and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.
6.4 Successors and Assigns. This Agreement shall be binding upon Lessor, Lessee, and their respective successors and assigns, except that Lessee may not assign or transfer any of its rights hereunder except with the prior written consent of Lessor. Subject to the foregoing, this Agreement shall inure to the benefit of Lessor and Lessee and their respective successors and assigns.
BLACKSTONE DRY LEASE - PAGE 7 OF 9
6.5. Notices. All notices and other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by delivery in person, by facsimile (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid), or electronic mail, or by a reputable overnight courier service, addressed as follows:
or at such other address as either Party may designate in writing. Any notice hereunder shall be effective upon delivery.
6.6. Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement and supersede all prior and contemporaneous understandings, including any prior written agreements of the Parties pertaining to the matters hereof.
6.7. Severability. If any provision of this Agreement is found to be prohibited or unenforceable in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in one jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, each Party hereto hereby waives any provision of law that renders any provision hereof prohibited or unenforceable in any respect.
6.8. Amendments and Modifications. The terms of this Agreement shall not be waived, varied, contradicted, explained, amended or changed in any other manner except by an instrument in writing, executed by both Parties.
6.9. Choice of Law. This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of New York (disregarding any Conflict of Laws rule which might result in the application of the laws of any other jurisdiction), including all matters of construction, validity, and performance.
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6.10. Force Majeure. No Party shall be liable for any failure to perform its obligations in connection with any action described in this Agreement, if such failure results from any act of God, riot, war, civil unrest, flood, earthquake, or other cause beyond such Partys reasonable control (including any mechanical, electronic, or communications failure, but excluding failure caused by a Partys financial condition or negligence).
6.11. Execution. This Agreement may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. Signatures transmitted by facsimile, .pdf, or any other electronic means shall constitute original signatures.
ARTICLE 7: TRUTH IN LEASING
7.1. Representation Regarding Maintenance. DURING THE LAST TWELVE MONTHS THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED IN ACCORDANCE WITH THE PROVISIONS OF FEDERAL AVIATION REGULATION PART 91.409. LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT COMPLIES WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS CONTAINED IN THE ABOVE LISTED FEDERAL AVIATION REGULATION FOR LESSEES USE OF THE AIRCRAFT UNDER THIS LEASE.
7.2. Representation Regarding Operational Control. DURING THE DURATION OF ANY RENTAL PERIOD UNDER THIS LEASE THE LESSEE, 345 PARK AVENUE, 44TH FLOOR, NEW YORK, NY 10154, IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THE LEASE. LESSEE HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH THE FEDERAL AVIATION REGULATIONS APPLICABLE TO THE AIRCRAFT.
7.3. Information from FAA. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONS CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE RESPONSIBLE FLIGHT STANDARDS OFFICE.
7.4. FAA Notification: in accordance with FAR 91.23. The Parties certify and shall take the following actions upon execution of this Agreement: (1) a true copy of this Agreement shall be placed aboard the Aircraft and carried thereon at all times and made available for inspection upon request by an appropriately constituted identified representative of the Administrator of the FAA; (2) a copy of this Agreement will be mailed to the FAA Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, OK 73125, within 24 hours of execution; and (3) the responsible Flight Standards Office will be notified at least 48 hours prior to the first flight of any Aircraft under this Agreement of the registration number of the Aircraft, the location of the airport of departure, and the departure time.
(Signature page follows)
BLACKSTONE DRY LEASE - PAGE 9 OF 9
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in their names and on their behalf by their duly authorized representatives, effective as of the Effective Date.
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GH4 Partners LLC As Lessor |
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Blackstone Administrative Services Partnership, L.P. As Lessee |
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Signature Page
Aircraft Dry Lease Agreement
APPENDIX A
GH4 Partners LLC |
INVOICE
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Appendix A
Aircraft Dry Lease Agreement
Exhibit 10.83
AIRCRAFT DRY LEASE AGREEMENT
THIS AIRCRAFT DRY LEASE AGREEMENT (this Agreement) is made and entered into effective as of (the Effective Date) between Hilltop Asset Holdings LLC, a Delaware limited liability company (Lessor) and Blackstone Administrative Services Partnership L.P., a Delaware limited partnership (Lessee) (collectively the Parties).
W I T N E S S E T H:
WHEREAS, Lessor owns a 2005 Bombardier model CL-600-2B16 (Challenger 604) aircraft, manufacturers serial number 5631 aircraft, with FAA Registration number N345XB, as described more fully in Section 1.1 below; and
WHEREAS, Lessor desires to dry lease the Aircraft to Lessee from time to time on a non-exclusive periodic basis; and Lessee desires to dry lease the Aircraft from Lessor from time to time.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and undertakings herein contained, the Parties hereto do hereby agree as follows:
ARTICLE 1: LEASE AND TERM
1.1. Lease. Lessor hereby agrees to dry lease to Lessee, from time to time, and Lessee hereby agrees to dry lease from Lessor, from time to time, one (1) 2005 Bombardier model CL-600-2B16 (Challenger 604) aircraft, manufacturers serial number 5631 aircraft, with FAA Registration number N345XB (the Airframe), equipped with two (2) GE model CF34-3B engines bearing manufacturers serial numbers SNE950434 and SNE950433 (the Engines), together with all components, accessions, systems, appliances, parts, instruments, accessories, furnishings, and any manufacturers or third-party warranties, any manufacturer service programs in connection with the Aircraft and other equipment installed thereon or attached thereto on the date hereof, all specified avionics, equipment, spare parts and loose equipment and all logs, weight and balance documents, wiring diagrams, manuals and other records and documentation pertaining to the operation and maintenance of such aircraft in Lessors possession or under its control (the foregoing, together with the Airframe and Engines, collectively, the Aircraft) to Lessee hereunder. Changes to the U.S. registration mark of the Aircraft shall have no effect on this Agreement.
1.2. Term and Rental Periods. The Term of this Agreement (Term) shall commence on the Effective Date and continue in effect for a period of one (1) year, unless terminated sooner pursuant to the express provisions herein contained. At the end of the first one (1) year period or any subsequent one (1) year period, this Agreement shall automatically be renewed for an additional one (1) year period. Each party shall have the right to terminate this Agreement without cause on thirty (30) days written notice to the other party. Lessee may dry lease the Aircraft pursuant to this Agreement for specific periods of time during the Term (Rental Periods). No Rental Period shall be for more than thirty (30) days.
ARTICLE 2: RENTAL AND EXPENSES
2.1. Rental Payment. Lessee agrees to pay to Lessor an hourly rental fee for occupied business flight hours at a rental rate of ($ ) per flight hour (prorated for fractions) of operation during each Rental Period (the Rental Payment). The hourly rental fee may be adjusted by mutual agreement during the Term based on fair market pricing. Such rental fees include delays, detours, cancellations caused by weather, routing, maintenance or other similar occurrences during each Rental Period, except that Lessor, at its sole discretion, may reduce the rental fees in the event of such occurrences. Lessee shall not be subject to any daily minimum Rental Payment on any day during the Rental Period.
2.2. Positioning, Repositioning. Lessor has incorporated the estimated cost of positioning/repositioning flights into the Rental Payment, and any positioning/repositioning flights will not be part of the Rental Period and will be invoiced to Lessors account, even if Lessee commences or ends its Rental Period at a point other than at Teterboro Airport (Home Base).
2.3. Lessee Reimbursement for Fuel and Incidental Charges. Lessee shall be responsible for fuel and incidental charges on occupied business flight hours during the Rental Period. Such Incidental Charges include but are not limited to hangaring and tie down charges away from the Home Base, landing fees, federal excise taxes, airport taxes or similar charges, customs, immigration and similar charges related to international flights; and any additional insurance premiums required for specific flights during the Rental Period. In the event any such charges are inadvertently made to Lessor by service providers, Lessee shall promptly reimburse Lessor for such costs. Lessor shall instruct service providers to invoice Lessee in the future.
2.4. Lessor Reimbursement for Certain Charges. Lessor has incorporated the cost for maintenance and repairs into the Rental Payment. In the event any charges for maintenance are paid directly by Lessee, Lessor shall promptly reimburse Lessee for such cost, or deduct as an offset against Rental Payments such costs.
2.5. Invoicing and Payment. Lessor will send Lessee invoices for such payments as are due under this Article for each Rental Period, using the form attached as Appendix A or other form at Lessors discretion. Lessee shall make payment by check or money order payable to Hilltop Asset Holdings LLC payable upon receipt, or shall wire transfer funds to the address specified on the invoice.
2.6. Calculation of Hours of Operation. For purposes of Rental Payments, hours of operation for each Rental Period shall be calculated (1) from the time the Aircraft takes off to the time it lands.
2.7. Taxes. All payments, including specifically Rental Payments made by Lessee hereunder, shall be made free and clear of, and without deduction for, any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, restrictions or conditions now or hereafter imposed by any governmental or taxing authority. Taxes which the Lessee may incur while operating the Aircraft include, but are not limited to: fuel excise taxes, airport taxes, sales and use taxes, over flight fees or taxes, and customs duties, or other foreign taxes relating to
BLACKSTONE DRY LEASE - PAGE 2 OF 9
international travel. Notwithstanding the foregoing, Lessee shall only be liable for taxes on lease payments actually made and Lessor shall indemnify, defend, and hold harmless, Lessee from any taxes assessed on the value of the Aircraft or any acceleration of Rental Payments subject to Lessees obligation to pay such taxes to the extent of actual Rental Payments as and when such Rental Payments become due.
2.8. Procedure to Request Rental of Aircraft. Lessee shall make requests for rental of the Aircraft to Lessor either orally or in writing. Requests should be made as far in advance as possible before the intended commencement of the Rental Period.
2.9. Availability. Lessor is making the Aircraft available to Lessee for dry lease on an as available basis only, and makes no guarantee or warranty with regard to Aircraft availability. Lessor will, in good faith, attempt to make the Aircraft available when it is not otherwise being used by Lessor, another lessee, or is unavailable for maintenance or other reasons.
2.10. Non-availability or Delay Due to Unanticipated Causes. Lessor shall promptly notify Lessee in writing if the Aircraft cannot be delivered for a Rental Period due to an unanticipated delay, such as weather or mechanical related delays. Lessor shall not be responsible for any loss, injury, damage, delay, or cancellation, or any consequential or incidental damages or costs incurred by Lessee caused by such delay or cancellation.
ARTICLE 3: OPERATION OF AIRCRAFT BY LESSEE
3.1. Operational Control. During each Rental Period, Lessee is and shall be the sole operator of the Aircraft and has sole operational control of the Aircraft. During each Rental Period, Lessee is responsible for operating the Aircraft in accordance and compliance with all laws, ordinances and regulations relating to the possession, use, operation, or maintenance of the Aircraft, including, but not limited to, Part 91 of the Federal Aviation Regulations (FAR).
3.2. Selection of Flight Crew. Lessee shall select and hire its own flight crew provided that the pilots shall be professionally trained and qualified, shall be familiar with and licensed to operate the Aircraft, and shall have current medical certificates, and recurrent training.
3.3. Care and Use. Lessee shall use and operate the Aircraft in a careful and proper manner. Lessee shall operate the Aircraft in accordance with the flight manual and all manufacturers suggested operating procedures. Lessee shall not operate, use, or maintain the Aircraft in violation of any airworthiness certificate, license, or registration relating to the Aircraft, or contrary to any law or regulation.
3.4. Limits of Operations. Lessee expressly warrants and agrees that it shall not operate the Aircraft outside the geographic limits set forth in the Insurance Policies (defined below), or otherwise operate the Aircraft in a way that would violate or compromise the Insurance Policies. Lessee shall use the Aircraft only for and on account of its business, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for compensation or hire (except in accordance with the provisions of FAR 91.501), or for any illegal purpose.
BLACKSTONE DRY LEASE - PAGE 3 OF 9
3.5. Documentation. Lessee shall complete required flight logs, maintenance logs, or other recording entries required by the FAR during any Rental Period.
3.6. Maintenance and Repair. Lessor, at its own cost and expense, will promptly repair or replace all parts, appliances, components, instruments, accessories, and furnishings that are installed in or attached to the Aircraft (herein called Parts) that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair, or permanently rendered unfit for use for any reason whatsoever during a Rental Period. Further, Lessor shall reimburse Lessee for any mechanics liens or other costs incurred by Lessee associated with non-routine repairs or maintenance made during a Rental Period, provided that: (1) such repairs shall be made by an FAA approved repair facility; and (2) Lessor shall approve in advance such repairs or maintenance. Lessee covenants to repair any damage beyond ordinary wear and tear caused by Lessees use of the Aircraft.
3.7. Right to Inspect. Lessor and its authorized representatives shall, at all reasonable times, have the right to enter the premises where the Aircraft may be located for the purpose of inspecting and examining the Aircraft, its condition, use and operation, and the books and records of Lessee relating thereto to ensure Lessees compliance with its obligations under this Lease. Notwithstanding the foregoing rights, Lessor has no duty to inspect and shall not incur any liability or obligation by reason of not making any such inspection.
ARTICLE 4: INSURANCE AND LIABILITY
4.1. Primary Liability and Property Damage Insurance. Lessor shall maintain in effect, at its own expense, third party Aircraft liability insurance, passenger legal liability insurance, and property damage liability insurance during the Term in such amounts as are customary for similarly situated aircraft. Each liability policy shall be primary without right of contribution from any other insurance that is carried by Lessee, and expressly shall provide that all the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
4.2. Insurance Against Physical Damage. Lessor shall maintain in effect, at its own expense, all-risk ground and flight Aircraft hull insurance covering the Aircraft. Any such insurance shall be during the Term for an amount customary for a similar aircraft.
4.3. Lessee As Named Insured. All insurance policies carried by Lessor in accordance with this Article (the Insurance Policies) shall name Lessee as a named insured.
4.4. Deductible. Any Insurance Policy carried by Lessor in accordance with this Article may be subject to a deductible amount which is customary under policies insuring similar aircraft similarly situated. Lessor warrants and agrees that in the event of an insurable claim, Lessor will bear the costs up to the deductible amount.
4.5. Additional Insurance for Lessee. Lessee may, at its discretion, obtain additional insurance covering its operation of the Aircraft.
4.6. Certificate of Insurance. Upon request, Lessor shall deliver to Lessee a certificate of insurance evidencing the insurance required to be maintained by Lessor under this Article.
BLACKSTONE DRY LEASE - PAGE 4 OF 9
4.7. Mutual Waiver of Liability Claims. Except as specifically set forth in this Agreement, Lessor and Lessee each hereby agree that each shall hold harmless the other Party, and the other Partys respective officers, directors, agents, employees, servants, attorneys, insurers, coinsurers, reinsurers, indemnitors, parents, subsidiaries, affiliates, predecessors, successors, and assigns from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including reasonable legal fees and expenses, of whatsoever kind and nature including, without limitation, personal injury or death (Liabilities), that could be asserted by that Party against the other Party directly or indirectly (including but not limited to claims raised against that Party by any third-party, employee, agent, or other person or entity not a party to the Agreement) arising out of the lease, sublease, possession, rental, use, condition, operation, transportation, return, storage or disposition of the Aircraft or any part thereof (including, without limitation, Liabilities in any way relating to or arising out of latent or other defects, whether or not discoverable by a Party or any other person, injury to persons or property, or strict liability in tort), provided, however, that neither Party shall be required to hold harmless the other Party for Liabilities resulting from the gross negligence or willful misconduct of the other Party.
ARTICLE 5: WARRANTIES AND DISCLAIMERS
5.1. Lessors Warranty. Lessor warrants that (1) the Aircraft shall be delivered to Lessee in airworthy condition; (2) the Aircraft is properly registered in accordance with U.S. law; and (3) Lessor is a citizen of the United States of America as set forth in 49 U.S.C. Section 40102(15) and the regulations thereunder.
5.2. Lessors Disclaimer of Warranties. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS, AND LESSEE EXPRESSLY WAIVES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, WORKMANSHIP, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF.
5.3. Lessees Representation Regarding Selection. Lessee represents and warrants that: (1) it has selected the Aircraft based on its own judgment and disclaims any reliance upon statements or representations not part of this Agreement; and (2) that the Aircraft is of a size, design and capacity selected by Lessee and is suitable for Lessees intended use.
5.4. Lessee Warranty Regarding Operation. Lessee represents and warrants that it shall only operate the Aircraft under the terms, conditions, and restrictions, as set forth in this Agreement.
BLACKSTONE DRY LEASE - PAGE 5 OF 9
ARTICLE 6: MISCELLANEOUS
6.1. Title. Title to the Aircraft shall remain vested in Lessor during the Lease Term and the Aircraft shall be registered at the FAA in the name of Lessor. Lessee shall have no right, title or interest in or to the Aircraft except as expressly provided herein and shall take no action that would impair the continued registration of the Aircraft at the FAA in the name of Lessor. Lessee shall not file or record this Agreement with the FAA. Lessee shall do or cause to be done any and all acts and things which may be required to perfect and preserve the interest and title of Lessor to the Aircraft within any jurisdiction in which Lessee may operate the Aircraft, and Lessee shall also do or cause to be done any and all acts and things which may be required under the terms of any other agreement, treaty, convention, pact or by any practice, customs or understanding involving any country or state in which Lessee may operate, as may be necessary or helpful, or as Lessor may reasonably request, to perfect and preserve the rights of Lessor within the jurisdiction of any such country or state.
6.2. Liens. Except as provided herein, Lessee will not directly or indirectly create, incur, assume or suffer to exist any liens on or with respect to (1) the Aircraft or any part thereof; (2) Lessors title thereto; or (3) any interest of Lessor therein. Lessee will promptly, at its own expense, take such action as may be necessary to discharge any such lien. Lessee may incur the following liens: (i) the respective rights of Lessor and Lessee as herein provided; (ii) liens created by Lessor; (iii) liens for taxes either not yet due or being contested by Lessee in good faith; and (iv) inchoate materialmens, mechanics, workmens, repairmens, employees or other like liens arising in the ordinary course of business of Lessee, or Parties acting on behalf of Lessee insofar as such actions relate to the Aircraft and are not inconsistent with this Agreement, not delinquent, and for the payment of which adequate reserves have been provided.
6.3. Defaults.
(a) Each of the following events shall constitute an Event of Default hereunder (whatever the reason for such event of default and whether it shall be voluntary or involuntary, or come about or be effected by operation of law, or be pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) if Lessee shall fail to pay when due any sum under this Agreement and such failure shall continue for a period of three business days after oral, facsimile, electronic mail or written notice has been given by Lessor to Lessee; (2) if Lessee shall fail to perform any covenant or agreement contained herein, and such failure shall continue for a period of fifteen (15) calendar days after notice thereof shall have been given in writing; (3) if any representation or warranty made by Lessee in this Agreement or any agreement, document or certificate delivered by the Lessee in connection herewith is or shall become incorrect in any material respect; (4) if Lessee shall operate the Aircraft in violation of any applicable law, regulation, rule or order of any governmental authority having jurisdiction thereof or shall operate the Aircraft when the insurance required hereunder shall not be in effect; (5) if any proceedings shall be commenced under any bankruptcy, insolvency, reorganization, readjustment of debt, receivership or liquidation law or statute of any jurisdiction; or (6) if any such proceedings shall be instituted against either Party and shall not be withdrawn or terminated within thirty (30) calendar days after their commencement.
BLACKSTONE DRY LEASE - PAGE 6 OF 9
(b) Upon the occurrence of any Event of Default Lessor may, at its option, exercise any or all remedies available at law or in equity, including, without limitation, any or all of the following remedies, as Lessor in its sole discretion shall elect: (1) by notice in writing to terminate this Agreement immediately, whereupon all rights of the Lessee to the use or possession of the Aircraft or any part thereof shall absolutely cease and terminate but Lessee shall remain liable as hereinafter provided; and thereupon Lessee, if so requested by Lessor, shall at its expense promptly return the Aircraft and Aircraft Documentation as required by this Agreement or Lessor, at its option, may enter upon the premises where the Aircraft or Aircraft Documentation are located and take immediate possession of and remove the same by summary proceedings or otherwise. Lessee specifically authorizes Lessors entry upon any premises where the Aircraft or Aircraft Documentation may be located for the purpose of, and waives any cause of action it may have arising from, a peaceful retaking of the Aircraft or Aircraft Documentation; or (2) perform or cause to be performed any obligation, covenant or agreement of Lessee hereunder. Lessee agrees to pay all costs and expenses incurred by Lessor for such performance and acknowledges that such performance by Lessor shall not be deemed to cure said Event of Default.
(c) Lessee shall be liable for all costs, charges and expenses, including reasonable legal fees and disbursements, incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessors remedies with respect thereto. No remedy referred to herein is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity. Lessor shall not be deemed to have waived any default, Event of Default or right hereunder unless the same is acknowledged in writing by duly authorized representative of Lessor. No waiver by Lessor of any default or Event of Default hereunder shall in any way be, or be construed to be, a waiver of any future or subsequent default or Event of Default. The failure or delay of Lessor in exercising any rights granted it hereunder upon any occurrence of any such right upon the continuation or recurrence of any such contingencies or similar contingencies, and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.
6.4 Successors and Assigns. This Agreement shall be binding upon Lessor, Lessee, and their respective successors and assigns, except that Lessee may not assign or transfer any of its rights hereunder except with the prior written consent of Lessor. Subject to the foregoing, this Lease shall inure to the benefit of Lessor and Lessee and their respective successors and assigns.
6.5. Notices. All notices and other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by delivery in person, by facsimile (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid), or electronic mail, or by a reputable overnight courier service, addressed as follows:
If to Lessor: | Hilltop Asset Holdings LLC | |||
345 Park Ave, 44th Floor | ||||
New York, NY 10154 |
BLACKSTONE DRY LEASE - PAGE 7 OF 9
With a copy to: | GKG Law, P.C. | |||||
1055 Thomas Jefferson Street, NW | ||||||
Suite 500 | ||||||
Washington, DC 20007 | ||||||
Attn: | ||||||
If to Lessee: | Blackstone Administrative Services Partnership, L.P. | |||||
345 Park Avenue, 44th Floor | ||||||
New York, NY 10154 | ||||||
Attn: |
or at such other address as either Party may designate in writing. Any notice hereunder shall be effective upon delivery.
6.6. Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement and supersede all prior and contemporaneous understandings, including any prior written agreements of the Parties pertaining to the matters hereof.
6.7. Severability. If any provision of this Agreement is found to be prohibited or unenforceable in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in one jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, each Party hereto hereby waives any provision of law that renders any provision hereof prohibited or unenforceable in any respect.
6.8. Amendments and Modifications. The terms of this Agreement shall not be waived, varied, contradicted, explained, amended or changed in any other manner except by an instrument in writing, executed by both Parties.
6.9. Choice of Law. This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of New York (disregarding any Conflict of Laws rule which might result in the application of the laws of any other jurisdiction), including all matters of construction, validity, and performance.
6.10. Force Majeure. No Party shall be liable for any failure to perform its obligations in connection with any action described in this Agreement, if such failure results from any act of God, riot, war, civil unrest, flood, earthquake, or other cause beyond such Partys reasonable control (including any mechanical, electronic, or communications failure, but excluding failure caused by a Partys financial condition or negligence).
6.11. Execution. This Lease may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. Signatures transmitted by facsimile, .pdf, or any other electronic means shall constitute original signatures.
BLACKSTONE DRY LEASE - PAGE 8 OF 9
ARTICLE 7: TRUTH IN LEASING
7.1. Representation Regarding Maintenance. DURING THE LAST TWELVE MONTHS THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FEDERAL AVIATION REGULATION PART 91 AND UNDER PART 135. LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT COMPLIES WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS CONTAINED IN THE ABOVE LISTED FEDERAL AVIATION REGULATION FOR LESSEES USE OF THE AIRCRAFT UNDER THIS LEASE.
7.2. Representation Regarding Operational Control. DURING THE DURATION OF ANY RENTAL PERIOD UNDER THIS LEASE THE LESSEE, 345 PARK AVENUE, 44TH FLOOR, NEW YORK, NY 10154, IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THE LEASE. LESSEE HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH THE FEDERAL AVIATION REGULATIONS APPLICABLE TO THE AIRCRAFT.
7.3. Information from FAA. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONS CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE RESPONSIBLE FLIGHT STANDARDS OFFICE.
7.4. FAA Notification: in accordance with FAR 91.23. The Parties shall take the following actions upon execution of this Agreement: (1) a copy of this Agreement shall be placed aboard the Aircraft; (2) a copy of this agreement will be mailed to the FAA Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, OK 73125, within 24 hours of execution; and (3) the responsible Flight Standards Office will be notified at least 48 hours prior to the first flight of any Aircraft under this Agreement of the registration number of the Aircraft, the location of the airport of departure, and the departure time.
(Signature page follows)
BLACKSTONE DRY LEASE - PAGE 9 OF 9
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in their names and on their behalf by their duly authorized officers, effective as of the Effective Date.
Hilltop Asset Holdings LLC | ||||
As Lessor | ||||
By: |
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Blackstone Administrative Services Partnership, L.P. | ||||
As Lessee | ||||
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Name: | ||||
Title: |
Signature Page
Aircraft Dry Lease Agreement
Blackstone Hilltop Asset Holdings LLC
APPENDIX A
Hilltop Asset Holdings LLC
INVOICE
To | ||||
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Date: |
Exhibit 10.84
AIRCRAFT DRY LEASE AGREEMENT
THIS AIRCRAFT DRY LEASE AGREEMENT (this Agreement) is made and entered into effective as of (the Effective Date) between Hilltop Asset Holdings LLC, a Delaware limited liability company (Lessor) and Blackstone Administrative Services Partnership L.P., a Delaware limited partnership (Lessee) (collectively the Parties).
W I T N E S S E T H:
WHEREAS, Lessor owns a 2009 Gulfstream Aerospace GIV-X (G450) aircraft, manufacturers serial number 4170, with FAA Registration number N776BT, as described more fully in Section 1.1 below; and
WHEREAS, Lessor desires to dry lease the Aircraft to Lessee from time to time on a non-exclusive periodic basis; and Lessee desires to dry lease the Aircraft from Lessor from time to time.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and undertakings herein contained, the Parties hereto do hereby agree as follows:
ARTICLE 1: LEASE AND TERM
1.1. Lease. Lessor hereby agrees to dry lease to Lessee, from time to time, and Lessee hereby agrees to dry lease from Lessor, from time to time, one (1) 2009 Gulfstream Aerospace GIV-X (G450) aircraft, manufacturers serial number 4170, with FAA Registration number N776BT (the Airframe), equipped with two (2) Rolls-Royce Deutschland Ltd & Co KG model TAY 611-8 engines bearing manufacturers serial numbers 85344 and 85345 (the Engines), together with all components, accessions, systems, appliances, parts, instruments, accessories, furnishings, and any manufacturers or third-party warranties, any manufacturer service programs in connection with the Aircraft and other equipment installed thereon or attached thereto on the date hereof, all specified avionics, equipment, spare parts and loose equipment and all logs, weight and balance documents, wiring diagrams, manuals and other records and documentation pertaining to the operation and maintenance of such aircraft in Lessors possession or under its control (the foregoing, together with the Airframe and Engines, collectively, the Aircraft) to Lessee hereunder. Changes to the U.S. registration mark of the Aircraft shall have no effect on this Agreement.
1.2. Term and Rental Periods. The Term of this Agreement (Term) shall commence on the Effective Date and continue in effect for a period of one (1) year, unless terminated sooner pursuant to the express provisions herein contained. At the end of the first one (1) year period or any subsequent one (1) year period, this Agreement shall automatically be renewed for an additional one (1) year period. Each party shall have the right to terminate this Agreement without cause on thirty (30) days written notice to the other party. Lessee may dry lease the Aircraft pursuant to this Agreement for specific periods of time during the Term (Rental Periods). No Rental Period shall be for more than thirty (30) days.
ARTICLE 2: RENTAL AND EXPENSES
2.1. Rental Payment. Lessee agrees to pay to Lessor the hourly rental fee for occupied business flight hours at the rental rate set forth in Appendix A, per flight hour (prorated for fractions) of operation during each Rental Period (the Rental Payment). The hourly rental fee may be adjusted during the Term by mutual agreement of the Parties, based on fair market pricing, by updating and replacing Appendix A. Such rental fees include delays, detours, cancellations caused by weather, routing, maintenance or other similar occurrences during each Rental Period, except that Lessor, at its sole discretion, may reduce the rental fees in the event of such occurrences. Lessee shall not be subject to any daily minimum Rental Payment on any day during the Rental Period.
2.2. Positioning, Repositioning. Lessor has incorporated the estimated cost of positioning/repositioning flights into the Rental Payment, and any positioning/repositioning flights will not be part of the Rental Period and will be invoiced to Lessors account, even if Lessee commences or ends its Rental Period at a point other than at Teterboro Airport (Home Base).
2.3. Lessee Reimbursement for Fuel and Incidental Charges. Lessee shall reimburse Lessor for fuel at the flat hourly rate set forth in Appendix A. In addition, Lessee shall be responsible for Incidental Charges on occupied business flight hours during the Rental Period. Such Incidental Charges include but are not limited to hangaring and tie down charges away from the Home Base, landing fees, federal excise taxes, airport taxes or similar charges, customs, immigration and similar charges related to international flights; and any additional insurance premiums required for specific flights during the Rental Period. In the event any such Incidental Charges are inadvertently made to Lessor by service providers, Lessee shall promptly reimburse Lessor for such costs. Lessor shall instruct service providers to invoice Lessee in the future.
2.4. Lessor Reimbursement for Certain Charges. Lessor has incorporated the cost for maintenance and repairs into the Rental Payment. In the event any charges for maintenance are paid directly by Lessee, Lessor shall promptly reimburse Lessee for such cost, or deduct as an offset against Rental Payments such costs.
2.5. Invoicing and Payment. Lessor will send Lessee invoices for such payments as are due under this Article for each Rental Period, using the form attached as Appendix B or other form at Lessors discretion. Lessee shall make payment by check or money order payable to Hilltop Asset Holdings LLC payable upon receipt, or shall wire transfer funds to the address specified on the invoice.
2.6. Calculation of Hours of Operation. For purposes of Rental Payments, hours of operation for each Rental Period shall be calculated (1) from the time the Aircraft takes off to the time it lands.
2.7. Taxes. All payments, including specifically Rental Payments made by Lessee hereunder, shall be made free and clear of, and without deduction for, any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, restrictions or conditions now or hereafter imposed by any governmental or taxing authority. Taxes which the Lessee may incur while
BLACKSTONE DRY LEASE - PAGE 2 OF 9
operating the Aircraft include, but are not limited to: fuel excise taxes, airport taxes, sales and use taxes, over flight fees or taxes, and customs duties, or other foreign taxes relating to international travel. Notwithstanding the foregoing, Lessee shall only be liable for taxes on lease payments actually made and Lessor shall indemnify, defend, and hold harmless, Lessee from any taxes assessed on the value of the Aircraft or any acceleration of Rental Payments subject to Lessees obligation to pay such taxes to the extent of actual Rental Payments as and when such Rental Payments become due.
2.8. Procedure to Request Rental of Aircraft. Lessee shall make requests for rental of the Aircraft to Lessor either orally or in writing. Requests should be made as far in advance as possible before the intended commencement of the Rental Period.
2.9. Availability. Lessor is making the Aircraft available to Lessee for dry lease on an as available basis only, and makes no guarantee or warranty with regard to Aircraft availability. Lessor will, in good faith, attempt to make the Aircraft available when it is not otherwise being used by Lessor, another lessee, or is unavailable for maintenance or other reasons.
2.10. Non-availability or Delay Due to Unanticipated Causes. Lessor shall promptly notify Lessee in writing if the Aircraft cannot be delivered for a Rental Period due to an unanticipated delay, such as weather or mechanical related delays. Lessor shall not be responsible for any loss, injury, damage, delay, or cancellation, or any consequential or incidental damages or costs incurred by Lessee caused by such delay or cancellation.
ARTICLE 3: OPERATION OF AIRCRAFT BY LESSEE
3.1. Operational Control. During each Rental Period, Lessee is and shall be the sole operator of the Aircraft and has sole operational control of the Aircraft. During each Rental Period, Lessee is responsible for operating the Aircraft in accordance and compliance with all laws, ordinances and regulations relating to the possession, use, operation, or maintenance of the Aircraft, including, but not limited to, Part 91 of the Federal Aviation Regulations (FAR).
3.2. Selection of Flight Crew. Lessee shall select and hire its own flight crew provided that the pilots shall be professionally trained and qualified, shall be familiar with and licensed to operate the Aircraft, and shall have current medical certificates, and recurrent training.
3.3. Care and Use. Lessee shall use and operate the Aircraft in a careful and proper manner. Lessee shall operate the Aircraft in accordance with the flight manual and all manufacturers suggested operating procedures. Lessee shall not operate, use, or maintain the Aircraft in violation of any airworthiness certificate, license, or registration relating to the Aircraft, or contrary to any law or regulation.
3.4. Limits of Operations. Lessee expressly warrants and agrees that it shall not operate the Aircraft outside the geographic limits set forth in the Insurance Policies (defined below), or otherwise operate the Aircraft in a way that would violate or compromise the Insurance Policies. Lessee shall use the Aircraft only for and on account of its business, and will not use the Aircraft for the purpose of providing transportation of passengers or cargo in air commerce for compensation or hire (except in accordance with the provisions of FAR 91.501), or for any illegal purpose.
BLACKSTONE DRY LEASE - PAGE 3 OF 9
3.5. Documentation. Lessee shall complete required flight logs, maintenance logs, or other recording entries required by the FAR during any Rental Period.
3.6. Maintenance and Repair. Lessor, at its own cost and expense, will promptly repair or replace all parts, appliances, components, instruments, accessories, and furnishings that are installed in or attached to the Aircraft (herein called Parts) that may from time to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair, or permanently rendered unfit for use for any reason whatsoever during a Rental Period. Further, Lessor shall reimburse Lessee for any mechanics liens or other costs incurred by Lessee associated with non-routine repairs or maintenance made during a Rental Period, provided that: (1) such repairs shall be made by an FAA approved repair facility; and (2) Lessor shall approve in advance such repairs or maintenance. Lessee covenants to repair any damage beyond ordinary wear and tear caused by Lessees use of the Aircraft.
3.7. Right to Inspect. Lessor and its authorized representatives shall, at all reasonable times, have the right to enter the premises where the Aircraft may be located for the purpose of inspecting and examining the Aircraft, its condition, use and operation, and the books and records of Lessee relating thereto to ensure Lessees compliance with its obligations under this Lease. Notwithstanding the foregoing rights, Lessor has no duty to inspect and shall not incur any liability or obligation by reason of not making any such inspection.
ARTICLE 4: INSURANCE AND LIABILITY
4.1. Primary Liability and Property Damage Insurance. Lessor shall maintain in effect, at its own expense, third party Aircraft liability insurance, passenger legal liability insurance, and property damage liability insurance during the Term in such amounts as are customary for similarly situated aircraft. Each liability policy shall be primary without right of contribution from any other insurance that is carried by Lessee, and expressly shall provide that all the provisions thereof, except the limits of liability, shall operate in the same manner as if there were a separate policy covering each insured.
4.2. Insurance Against Physical Damage. Lessor shall maintain in effect, at its own expense, all-risk ground and flight Aircraft hull insurance covering the Aircraft. Any such insurance shall be during the Term for an amount customary for a similar aircraft.
4.3. Lessee As Named Insured. All insurance policies carried by Lessor in accordance with this Article (the Insurance Policies) shall name Lessee as a named insured.
4.4. Deductible. Any Insurance Policy carried by Lessor in accordance with this Article may be subject to a deductible amount which is customary under policies insuring similar aircraft similarly situated. Lessor warrants and agrees that in the event of an insurable claim, Lessor will bear the costs up to the deductible amount.
4.5. Additional Insurance for Lessee. Lessee may, at its discretion, obtain additional insurance covering its operation of the Aircraft.
BLACKSTONE DRY LEASE - PAGE 4 OF 9
4.6. Certificate of Insurance. Upon request, Lessor shall deliver to Lessee a certificate of insurance evidencing the insurance required to be maintained by Lessor under this Article.
4.7. Mutual Waiver of Liability Claims. Except as specifically set forth in this Agreement, Lessor and Lessee each hereby agree that each shall hold harmless the other Party, and the other Partys respective officers, directors, agents, employees, servants, attorneys, insurers, coinsurers, reinsurers, indemnitors, parents, subsidiaries, affiliates, predecessors, successors, and assigns from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs and expenses, including reasonable legal fees and expenses, of whatsoever kind and nature including, without limitation, personal injury or death (Liabilities), that could be asserted by that Party against the other Party directly or indirectly (including but not limited to claims raised against that Party by any third-party, employee, agent, or other person or entity not a party to the Agreement) arising out of the lease, sublease, possession, rental, use, condition, operation, transportation, return, storage or disposition of the Aircraft or any part thereof (including, without limitation, Liabilities in any way relating to or arising out of latent or other defects, whether or not discoverable by a Party or any other person, injury to persons or property, or strict liability in tort), provided, however, that neither Party shall be required to hold harmless the other Party for Liabilities resulting from the gross negligence or willful misconduct of the other Party.
ARTICLE 5: WARRANTIES AND DISCLAIMERS
5.1. Lessors Warranty. Lessor warrants that (1) the Aircraft shall be delivered to Lessee in airworthy condition; (2) the Aircraft is properly registered in accordance with U.S. law; and (3) Lessor is a citizen of the United States of America as set forth in 49 U.S.C. Section 40102(15) and the regulations thereunder.
5.2. Lessors Disclaimer of Warranties. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, LESSOR NEITHER MAKES NOR SHALL BE DEEMED TO HAVE MADE AND HEREBY EXPRESSLY DISCLAIMS, AND LESSEE EXPRESSLY WAIVES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, WORKMANSHIP, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT LIABILITY IN TORT OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF.
5.3. Lessees Representation Regarding Selection. Lessee represents and warrants that: (1) it has selected the Aircraft based on its own judgment and disclaims any reliance upon statements or representations not part of this Agreement; and (2) that the Aircraft is of a size, design and capacity selected by Lessee and is suitable for Lessees intended use.
BLACKSTONE DRY LEASE - PAGE 5 OF 9
5.4. Lessee Warranty Regarding Operation. Lessee represents and warrants that it shall only operate the Aircraft under the terms, conditions, and restrictions, as set forth in this Agreement.
ARTICLE 6: MISCELLANEOUS
6.1. Title. Title to the Aircraft shall remain vested in Lessor during the Lease Term and the Aircraft shall be registered at the FAA in the name of Lessor. Lessee shall have no right, title or interest in or to the Aircraft except as expressly provided herein and shall take no action that would impair the continued registration of the Aircraft at the FAA in the name of Lessor. Lessee shall not file or record this Agreement with the FAA. Lessee shall do or cause to be done any and all acts and things which may be required to perfect and preserve the interest and title of Lessor to the Aircraft within any jurisdiction in which Lessee may operate the Aircraft, and Lessee shall also do or cause to be done any and all acts and things which may be required under the terms of any other agreement, treaty, convention, pact or by any practice, customs or understanding involving any country or state in which Lessee may operate, as may be necessary or helpful, or as Lessor may reasonably request, to perfect and preserve the rights of Lessor within the jurisdiction of any such country or state.
6.2. Liens. Except as provided herein, Lessee will not directly or indirectly create, incur, assume or suffer to exist any liens on or with respect to (1) the Aircraft or any part thereof; (2) Lessors title thereto; or (3) any interest of Lessor therein. Lessee will promptly, at its own expense, take such action as may be necessary to discharge any such lien. Lessee may incur the following liens: (i) the respective rights of Lessor and Lessee as herein provided; (ii) liens created by Lessor; (iii) liens for taxes either not yet due or being contested by Lessee in good faith; and (iv) inchoate materialmens, mechanics, workmens, repairmens, employees or other like liens arising in the ordinary course of business of Lessee, or Parties acting on behalf of Lessee insofar as such actions relate to the Aircraft and are not inconsistent with this Agreement, not delinquent, and for the payment of which adequate reserves have been provided.
6.3. Defaults.
(a) Each of the following events shall constitute an Event of Default hereunder (whatever the reason for such event of default and whether it shall be voluntary or involuntary, or come about or be effected by operation of law, or be pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) if Lessee shall fail to pay when due any sum under this Agreement and such failure shall continue for a period of three business days after oral, facsimile, electronic mail or written notice has been given by Lessor to Lessee; (2) if Lessee shall fail to perform any covenant or agreement contained herein, and such failure shall continue for a period of fifteen (15) calendar days after notice thereof shall have been given in writing; (3) if any representation or warranty made by Lessee in this Agreement or any agreement, document or certificate delivered by the Lessee in connection herewith is or shall become incorrect in any material respect; (4) if Lessee shall operate the Aircraft in violation of any applicable law, regulation, rule or order of any governmental authority having jurisdiction thereof or shall operate the Aircraft when the insurance required hereunder shall not be in effect; (5) if any proceedings shall be commenced under any bankruptcy, insolvency, reorganization, readjustment of debt, receivership or liquidation law or statute of any jurisdiction; or (6) if any such proceedings shall be instituted against either Party and shall not be withdrawn or terminated within thirty (30) calendar days after their commencement.
BLACKSTONE DRY LEASE - PAGE 6 OF 9
(b) Upon the occurrence of any Event of Default Lessor may, at its option, exercise any or all remedies available at law or in equity, including, without limitation, any or all of the following remedies, as Lessor in its sole discretion shall elect: (1) by notice in writing to terminate this Agreement immediately, whereupon all rights of the Lessee to the use or possession of the Aircraft or any part thereof shall absolutely cease and terminate but Lessee shall remain liable as hereinafter provided; and thereupon Lessee, if so requested by Lessor, shall at its expense promptly return the Aircraft and Aircraft Documentation as required by this Agreement or Lessor, at its option, may enter upon the premises where the Aircraft or Aircraft Documentation are located and take immediate possession of and remove the same by summary proceedings or otherwise. Lessee specifically authorizes Lessors entry upon any premises where the Aircraft or Aircraft Documentation may be located for the purpose of, and waives any cause of action it may have arising from, a peaceful retaking of the Aircraft or Aircraft Documentation; or (2) perform or cause to be performed any obligation, covenant or agreement of Lessee hereunder. Lessee agrees to pay all costs and expenses incurred by Lessor for such performance and acknowledges that such performance by Lessor shall not be deemed to cure said Event of Default.
(c) Lessee shall be liable for all costs, charges and expenses, including reasonable legal fees and disbursements, incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessors remedies with respect thereto. No remedy referred to herein is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity. Lessor shall not be deemed to have waived any default, Event of Default or right hereunder unless the same is acknowledged in writing by duly authorized representative of Lessor. No waiver by Lessor of any default or Event of Default hereunder shall in any way be, or be construed to be, a waiver of any future or subsequent default or Event of Default. The failure or delay of Lessor in exercising any rights granted it hereunder upon any occurrence of any such right upon the continuation or recurrence of any such contingencies or similar contingencies, and any single or partial exercise of any particular right by Lessor shall not exhaust the same or constitute a waiver of any other right provided herein.
6.4 Successors and Assigns. This Agreement shall be binding upon Lessor, Lessee, and their respective successors and assigns, except that Lessee may not assign or transfer any of its rights hereunder except with the prior written consent of Lessor. Subject to the foregoing, this Lease shall inure to the benefit of Lessor and Lessee and their respective successors and assigns.
6.5. Notices. All notices and other communications under this Agreement shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt or refusal to accept receipt) by delivery in person, by facsimile (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid), or electronic mail, or by a reputable overnight courier service, addressed as follows:
If to Lessor: | Hilltop Asset Holdings LLC | |||
345 Park Ave, 44th Floor | ||||
New York, NY 10154 |
BLACKSTONE DRY LEASE - PAGE 7 OF 9
With a copy to: | GKG Law, P.C. | |||||
1055 Thomas Jefferson Street, NW | ||||||
Suite 500 | ||||||
Washington, DC 20007 | ||||||
Attn: | ||||||
If to Lessee: | Blackstone Administrative Services Partnership, L.P. | |||||
345 Park Avenue, 44th Floor | ||||||
New York, NY 10154 | ||||||
Attn: |
or at such other address as either Party may designate in writing. Any notice hereunder shall be effective upon delivery.
6.6. Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties pertaining to the subject matter of this Agreement and supersede all prior and contemporaneous understandings, including any prior written agreements of the Parties pertaining to the matters hereof.
6.7. Severability. If any provision of this Agreement is found to be prohibited or unenforceable in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in one jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, each Party hereto hereby waives any provision of law that renders any provision hereof prohibited or unenforceable in any respect.
6.8. Amendments and Modifications. The terms of this Agreement shall not be waived, varied, contradicted, explained, amended or changed in any other manner except by an instrument in writing, executed by both Parties.
6.9. Choice of Law. This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of New York (disregarding any Conflict of Laws rule which might result in the application of the laws of any other jurisdiction), including all matters of construction, validity, and performance.
6.10. Force Majeure. No Party shall be liable for any failure to perform its obligations in connection with any action described in this Agreement, if such failure results from any act of God, riot, war, civil unrest, flood, earthquake, or other cause beyond such Partys reasonable control (including any mechanical, electronic, or communications failure, but excluding failure caused by a Partys financial condition or negligence).
BLACKSTONE DRY LEASE - PAGE 8 OF 9
6.11. Execution. This Lease may be executed in counterparts, each of which when so executed shall be deemed to be an original, and such counterparts together shall constitute one and the same instrument. Signatures transmitted by facsimile, .pdf, or any other electronic means shall constitute original signatures.
ARTICLE 7: TRUTH IN LEASING
7.1. Representation Regarding Maintenance. DURING THE LAST TWELVE MONTHS THE AIRCRAFT HAS BEEN MAINTAINED AND INSPECTED UNDER FEDERAL AVIATION REGULATION PART 91 AND UNDER PART 135. LESSOR HEREBY CERTIFIES THAT THE AIRCRAFT COMPLIES WITH THE MAINTENANCE AND INSPECTION REQUIREMENTS CONTAINED IN THE ABOVE LISTED FEDERAL AVIATION REGULATION FOR LESSEES USE OF THE AIRCRAFT UNDER THIS LEASE.
7.2. Representation Regarding Operational Control. DURING THE DURATION OF ANY RENTAL PERIOD UNDER THIS LEASE THE LESSEE, 345 PARK AVENUE, 44TH FLOOR, NEW YORK, NY 10154, IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THE LEASE. LESSEE HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE WITH THE FEDERAL AVIATION REGULATIONS APPLICABLE TO THE AIRCRAFT.
7.3. Information from FAA. LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONS CONTROL AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE RESPONSIBLE FLIGHT STANDARDS OFFICE.
7.4. FAA Notification: in accordance with FAR 91.23. The Parties shall take the following actions upon execution of this Agreement: (1) a copy of this Agreement shall be placed aboard the Aircraft; (2) a copy of this agreement will be mailed to the FAA Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, OK 73125, within 24 hours of execution; and (3) the responsible Flight Standards Office will be notified at least 48 hours prior to the first flight of any Aircraft under this Agreement of the registration number of the Aircraft, the location of the airport of departure, and the departure time.
(Signature page follows)
BLACKSTONE DRY LEASE - PAGE 9 OF 9
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in their names and on their behalf by their duly authorized officers, effective as of the Effective Date.
Hilltop Asset Holdings LLC | ||||
As Lessor | ||||
By: |
|
|||
Name: | ||||
Title: | ||||
Blackstone Administrative Services Partnership, L.P. | ||||
As Lessee | ||||
By: |
|
|||
Name: | ||||
Title: |
Signature Page
Aircraft Dry Lease Agreement G450
Blackstone Hilltop
APPENDIX A Schedule of Rent and Costs* |
1. Rental Payment: $ per occupied flight hour
a. (per section 2.1)
2. Fuel Reimbursement: $ per occupied flight hour**
a. (per section 2.3)
* |
This schedule will be reviewed and updated by mutual written consent of the parties on an annual basis. |
** |
Fuel is based on gph estimated fuel usage per hour x $ per gallon. The parties may adjust by mutual consent, on a periodic basis to reflect changes in fuel cost. |
Appendix A
Aircraft Dry Lease Agreement G450
Blackstone Hilltop
APPENDIX B
Hilltop Asset Holdings LLC
INVOICE
To | ||||
|
||||
Date: |
Appendix B
Aircraft Dry Lease Agreement G450
Blackstone Hilltop
Exhibit 10.90
Execution Version
BREIT SPECIAL LIMITED PARTNER L.P.
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
DATED AS OF FEBRUARY 12, 2020
EFFECTIVE JANUARY 1, 2018
THE PARTNERSHIP INTERESTS (THE INTERESTS) OF BREIT SPECIAL LIMITED PARTNER L.P., A DELAWARE LIMITED PARTNERSHIP (THE PARTNERSHIP), HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS LIMITED PARTNERSHIP AGREEMENT. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS LIMITED PARTNERSHIP AGREEMENT. THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
ARTICLE I DEFINITIONS |
2 | |||||
Section 1.1 |
Definitions | 2 | ||||
Section 1.2 |
Terms Generally | 7 | ||||
ARTICLE II GENERAL PROVISIONS |
8 | |||||
Section 2.1 |
Conversion; Formation | 8 | ||||
Section 2.2 |
General Partner, Limited Partner, Special Partner | 8 | ||||
Section 2.3 |
Continuation; Name; Foreign Jurisdictions | 8 | ||||
Section 2.4 |
Term | 8 | ||||
Section 2.5 |
Purpose; Powers | 8 | ||||
Section 2.6 |
Registered Office; Place of Business; Registered Agent | 10 | ||||
ARTICLE III MANAGEMENT |
10 | |||||
Section 3.1 |
General Partner | 10 | ||||
Section 3.2 |
Partner Voting, etc. | 11 | ||||
Section 3.3 |
Management | 11 | ||||
Section 3.4 |
Responsibilities of Partners | 12 | ||||
Section 3.5 |
Exculpation and Indemnification | 13 | ||||
Section 3.6 |
Representations of Partners | 14 | ||||
Section 3.7 |
Tax Representation and Further Assurances | 15 | ||||
ARTICLE IV CAPITAL OF THE PARTNERSHIP |
16 | |||||
Section 4.1 |
Capital Contributions by Partners | 16 | ||||
Section 4.2 |
Interest | 17 | ||||
Section 4.3 |
Partial Withdrawals of Capital | 17 | ||||
ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
17 | |||||
Section 5.1 |
General Accounting Matters | 17 | ||||
Section 5.2 |
Capital Accounts | 18 | ||||
Section 5.3 |
Profit Sharing Percentages | 19 | ||||
Section 5.4 |
Allocations of Net Income (Loss) | 19 | ||||
Section 5.5 |
Liability of Partners | 20 | ||||
Section 5.6 |
Repurchase Rights, etc. | 20 | ||||
Section 5.7 |
Distributions | 20 | ||||
Section 5.8 |
Business Expenses | 21 | ||||
ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF PARTNERSHIP INTERESTS; TERMINATION |
21 | |||||
Section 6.1 |
Additional Partners | 21 | ||||
Section 6.2 |
Withdrawal of Partners | 22 | ||||
Section 6.3 |
Partnership Interests Not Transferable | 23 | ||||
Section 6.4 |
Consequences upon Withdrawal of a Partner | 23 | ||||
Section 6.5 |
Satisfaction and Discharge of a Withdrawn Partners Interest | 24 | ||||
Section 6.6 |
Dissolution of the Partnership | 27 | ||||
Section 6.7 |
Certain Tax Matters | 27 | ||||
Section 6.8 |
Special Basis Adjustments | 29 | ||||
ARTICLE VII MISCELLANEOUS |
30 | |||||
Section 7.1 |
Submission to Jurisdiction; Waiver of Jury Trial | 30 |
Section 7.2 |
Ownership and Use of the Blackstone Name | 31 | ||||
Section 7.3 |
Written Consent | 31 | ||||
Section 7.4 |
Admission Letters; Schedules | 31 | ||||
Section 7.5 |
Governing Law; Separability of Provisions | 31 | ||||
Section 7.6 |
Successors and Assigns | 32 | ||||
Section 7.7 |
Partners Will | 32 | ||||
Section 7.8 |
Confidentiality; Restrictive Covenants | 32 | ||||
Section 7.9 |
Notices | 33 | ||||
Section 7.10 |
Counterparts | 33 | ||||
Section 7.11 |
Power of Attorney | 33 | ||||
Section 7.12 |
Cumulative Remedies | 33 | ||||
Section 7.13 |
Legal Fees | 33 | ||||
Section 7.14 |
Modifications | 34 | ||||
Section 7.15 |
Entire Agreement | 34 |
ii
BREIT SPECIAL LIMITED PARTNER L.P.
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT (this Agreement) of BREIT SPECIAL LIMITED PARTNER L.P., a Delaware limited partnership (the Partnership), dated as of February 12, 2020, by and among Blackstone Holdings III L.P., a Québec société en commandite, as general partner of the Partnership (in its capacity as general partner of the Partnership the General Partner), the other partners of the Partnership as set forth in the books and records of the Partnership, and such other persons that are admitted to the Partnership as partners after the date hereof in accordance herewith.
W I T N E S S E T H
WHEREAS BREIT Special Limited Partner L.L.C. (the Company) was formed as a limited liability company under the laws of the State of Delaware pursuant to the filing of a Certificate of Formation with the Office of the Secretary of State of the State of Delaware on August 5, 2016; and a Limited Liability Company Agreement, dated as of August 23, 2016 (the LLC Agreement), by Blackstone Holdings III L.P., as the sole member of the Company;
WHEREAS, (i) the Companys conversion to BREIT Special Limited Partner L.P., a Delaware limited partnership, and (ii) the adoption of this Agreement were each authorized under the LLC Agreement, and the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et seq.), as amended from time to time, and any successor to such statute (the LLC Act);
WHEREAS, on January 25, 2018, the Company was converted to a limited partnership (the Conversion) pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101, et seq., as it may be amended from time to time (the Partnership Act), and Section 18-216 of the LLC Act by causing the filing in the office of the Secretary of State of the State of Delaware of a Certificate of Conversion to Limited Partnership of the Company to the Partnership and a Certificate of Limited Partnership of the Partnership;
WHEREAS, the limited liability company interests of the Company were converted into partnership interests in the Partnership in accordance with Section 2.1 of this Agreement;
WHEREAS, in accordance with Section 17-217(g) of the Partnership Act, the Partnership shall constitute a continuation of the existence of the Company in the form of a Delaware limited partnership and, for all purposes of the laws of the State of Delaware, shall be deemed to be the same entity as the Company;
WHEREAS, on August 6, 2019, this Agreement was amended and restated;
WHEREAS, it is the intent of the current and former Partners of the Partnership that the Conversion and this second amendment and restatement is effective as of January 1, 2018;
WHEREAS, the parties hereto desire to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties hereto agree to continue the existence of the Company in the form of the Partnership, and as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:
Admission Letter has the meaning set forth in Section 7.4.
Affiliate when used with reference to another person means any person (other than the Partnership), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires, endowment funds, estate planning vehicles (including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts associated with or established by Blackstone and/or its affiliates, partners and current and/or former employees and/or related persons.
Agreement means this Amended and Restated Limited Partnership Agreement, as it may be further amended, supplemented, restated or otherwise modified from time to time.
BE Agreement means the limited partnership agreement, limited liability company agreement or other governing document of any limited partnership, limited liability company or other entity referred to in the definition of Blackstone Entity, as such limited partnership agreement, limited liability company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing document may be further amended, supplemented, restated or otherwise modified from time to time.
Blackstone means, collectively, The Blackstone Group Inc., a Delaware corporation, and any successor thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any Blackstone-sponsored fund (or any affiliate thereof that is not otherwise an Affiliate of The Blackstone Group Inc.)).
Blackstone Entity means any partnership, limited liability company or other entity (excluding any natural persons and any portfolio companies of any Blackstonesponsored fund) that is an Affiliate of The Blackstone Group Inc., as designated by the General Partner in its sole discretion.
BREIT Operating Partnership L.P. means the Delaware limited partnership formed pursuant to the Limited Partnership Agreement entered into as of August 25, 2016 (as amended, supplemented, modified or restated from time to time), between Blackstone Real Estate Income Trust, Inc., a Maryland corporation, as general partner and the Company as a limited partner.
Capital Account means a capital account established for each Partner in the books and records of the Partnership and maintained and adjusted as provided in Articles V and VI. A separate Capital Account shall be established for each Partner with respect to each category of Net Income (Loss) (including, without limitation, Fund Net Income (Loss), Other Net Income (Loss) and the Performance Allocation) as may be determined by the General Partner in its sole discretion, and the General Partner, in its sole discretion, may notionally assign any assets of the Partnership to any such Capital Account.
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Capital Account Interest means, with respect to any Partner, such Partners interest in the assets of the Partnership as assigned by the General Partner in its discretion, including based upon such Partners contributions or deemed contributions to the Partnership, as set forth in the books and records of the Partnership, as such Capital Account Interest may be modified from time to time in accordance herewith. Separate Capital Account Interests may be established for each Partner with respect to different assets of the Partnership.
Carrying Value shall mean, with respect to any Partnership asset, the assets adjusted basis for U.S. federal income tax purposes, except that the Carrying Values of all Partnership assets shall be adjusted to equal their respective fair market values, in accordance with the rules set forth in Regulations Section 1.704 1(b)(2)(iv)(f), except as otherwise provided herein, immediately prior to: (a) the date of the acquisition of any additional Interest by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (b) the date of the distribution of more than a de minimis amount of Partnership property to a Partner; (c) the date an Interest is relinquished to the Partnership; or (d) any other date specified in the Regulations; provided, that adjustments pursuant to clauses (a), (b), (c) and (d) above shall be made only if the General Partner reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners. The Carrying Value of any Partnership asset distributed to any Partner shall be adjusted immediately prior to such distribution to equal its fair market value. The Carrying Value of any asset contributed by a Partner to the Partnership shall be the fair market value of the asset at the date of its contribution thereto. In the case of any asset that has a Carrying Value that differs from its adjusted tax basis, Carrying Value shall be adjusted by the amount of depreciation calculated for purposes of the definition of Net Income (Loss) rather than the amount of depreciation determined for U.S. federal income tax purposes, and depreciation shall be calculated by reference to Carrying Value rather than tax basis once Carrying Value differs from tax basis.
Cause means the occurrence or existence of any of the following with respect to a Partner, as determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any material breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partners deliberate failure to perform his or her duties to the Partnership or any of its Affiliates, or (z) such Partners committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that in the case of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a Notice of Breach) within 15 days after the General Partner becomes aware of such action and such Partner fails to cure such breach, failure to perform, conduct or behavior within 15 days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional 15 days, as shall be reasonably required for such cure, provided that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates; (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony (under U.S. law or its equivalent in any jurisdiction) or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partners ability to function as a Partner of the Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates, or (B) the business of the Partnership and its Affiliates or (iv) such partner becomes subject to an event described in Rule 506(d)(1)(i)-(vii) of Regulation D under the Securities Act.
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Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
Contingent means subject to repurchase rights and/or other requirements.
The term control when used with reference to any person means the power to direct the management and policies of such person, directly or indirectly, by or through stock or other equity ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one or more other persons by or through stock or other equity ownership, agency or otherwise; and the terms controlling and controlled shall have meanings correlative to the foregoing.
Controlled Entity when used with reference to another person means any person controlled by such other person.
Covered Person has the meaning set forth in Section 3.5(a).
Delaware Arbitration Act has the meaning set forth in Section 7.1(d).
Estate Planning Vehicle has the meaning set forth in Section 6.3.
Exchange Act means the U.S. Securities Exchange Act of 1934, as amended.
Final Event means the death, Total Disability, Incompetence, Bankruptcy, liquidation, dissolution or Withdrawal from the Partnership of any person who is a Partner.
Firm Advances means any capital contribution due to the Partnership by a Partner that the General Partner or one of its Affiliates may in its sole discretion advance to such Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone).
Fiscal Year means a calendar year, or any other period chosen by the General Partner.
Fund Agreements means the collective reference to (i) the Limited Partnership Agreement of BREIT Operating Partnership L.P., dated August 25, 2016 (as amended, supplemented, modified or restated from time to time) and (ii) any other limited partnership agreements, operating agreements and other governing documentation of the Funds, in each case, as amended, supplemented or otherwise modified from time to time.
Funds means the collective reference to (i) BREIT Operating Partnership L.P. and (ii) any other investment vehicle for which the Partnership serves as the direct or indirect general partner, special limited partner or other capacity and, where the context requires, any parallel funds, managed accounts or alternative investment vehicles related to the foregoing.
Fund Net Income (Loss) means any net income (loss) of the Partnership relating to the Partnerships interest in the Funds and any appreciation or depreciation relating thereto, but not including (i) Other Net Income (Loss) or (ii) any net income (loss) relating to the Performance Allocation. The General Partner may designate separate categories of Fund Net Income (Loss) as it may determine in its sole discretion, and may establish and allocate Profit Sharing Percentages or Capital Account Interests with respect to such separate categories accordingly.
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GAAP has the meaning set forth in Section 5.1(c).
General Partner has the meaning set forth in the preamble hereto.
Incompetence means, with respect to any Partner, the determination by the General Partner in its sole discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
Interest means a partnership interest (as defined in § 7-101(13) ) of the Partnership Act) in the Partnership, including those which are held by a Retaining Withdrawn Partner.
Investor Note means a promissory note of a Partner evidencing indebtedness incurred by such Partner to the Lender or Guarantor for the purpose of financing the purchase of an Interest in the Partnership and/or the amount of one or more capital contributions to the Partnership, which is secured by such Interest and all other Interests of such Partner in the Partnership (if any), in each case on terms which were or are approved by the General Partner; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, in which case, such indebtedness shall also be secured by such other interests of such Partner in such Blackstone Entities, in each case on terms which were or are approved by the General Partner. Such indebtedness shall be prepayable as provided in the Investor Note, any security agreement related thereto and any applicable BE Agreements and any documentation related thereto. References to Investor Notes herein may refer to multiple loans made pursuant to such promissory note, whether made with respect to such Partners Interest(s) in the Partnership or such Partners interests in other Blackstone Entities, and references to an Investor Note refer to one such loan as the context requires. In no way shall any indebtedness incurred to acquire Interests in the Partnership, and, if applicable, interests in other Blackstone Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not the lender or guarantor with respect thereto.
Lender or Guarantor means Blackstone Holdings III L.P., in its capacity as lender or guarantor under the Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Interests or other interests in Blackstone Entities.
Limited Partner means each of the parties listed as Limited Partners in the books and records of the Partnership or any Person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each in its capacity as a limited partner of the Partnership. For the avoidance of doubt, the term Limited Partner does not include the General Partner or any Special Partners.
LLC Act has the meaning set forth in the preamble hereto.
Losses has the meaning set forth in Section 3.5(b).
Majority in Interest of the Partners on any date (a vote date) means one or more persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to the vote date selected by the General Partner), have aggregate Profit Sharing Percentages representing at least a majority of the Profit Sharing Percentages of all the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
Net Income (Loss) has the meaning set forth in Section 5.1(b).
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Non-Contingent means generally not subject to repurchase rights or other requirements.
Nonvoting Special Partner has the meaning set forth in Section 6.1(a).
Other Net Income (Loss) for any accounting period means the net income or net loss of the Partnership for such accounting period as determined on an accrual basis after deduction for expenses of the Partnership, in accordance with GAAP, excluding (i) Fund Net Income (Loss) and (ii) any net income (loss) relating to the Performance Allocation. The General Partner may designate separate categories of Other Net Income (Loss) as it may determine in its sole discretion, and may establish and allocate Profit Sharing Percentages or Capital Account Interests with respect to such separate categories accordingly.
Partner means any person who is a partner of the Partnership, including the Limited Partners, the General Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same Partner Category, shall have any right to vote as a class on any matter relating to the Partnership, including, but not limited to, any merger, reorganization, dissolution or liquidation.
Partnership Act means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101, et seq., as it may be amended from time to time
Partnership Representative has the meaning set forth in Section 6.7(c).
Pass-Thru Partner has the meaning set forth in Section 6.7(c).
Performance Allocation means the performance allocations of net capital appreciation or net profits allocated by the Funds to the Partnership pursuant to the applicable Fund Agreements. The General Partner may designate separate categories of net income (loss) relating to the Performance Allocation as it may determine in its sole discretion, and may establish and allocate Profit Sharing Percentages with respect to such separate categories accordingly.
Person means any individual, partnership, joint venture, corporation, limited liability company, unincorporated organization or association, trust (including the trustees thereof in their capacity as such), government (or agency or subdivision thereof), governmental entity or other entity.
Prime Rate means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. (JPM) as its prime rate or, if JPM fails to publish such rate, the equivalent rate as published by another national bank.
Profit Sharing Percentage means, with respect to any Partner, such Partners percentage interest in Net Income (Loss) or any category thereof (including, without limitation, Fund Net Income (Loss), Other Net Income (Loss) and the Performance Allocation), as determined by the General Partner and set forth in the books and records of the Partnership, as such Profit Sharing Percentage may be modified from time to time in accordance herewith. Separate Profit Sharing Percentages may be established for each Partner with respect to each separate category of Net Income (Loss) and with respect to separate Capital Account Interests.
Positive Basis has the meaning set forth in Section 6.7(b).
Positive Basis Partner has the meaning set forth in Section 6.7(b).
Regulations means the U.S. Treasury regulations promulgated under the Code.
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Repurchase Period has the meaning set forth in Section 5.7(c).
Retaining Withdrawn Partner means a Withdrawn Partner who has retained an Interest in the Partnership following such Withdrawn Partners Withdrawal Date. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
Securities Act means the U.S. Securities Act of 1933, as amended from time to time, or any successor statute.
Settlement Date has the meaning set forth in Section 6.5(a).
Special Partner means any person shown in the books and records of the Partnership as a Special Partner of the Partnership, including any Nonvoting Special Partner.
Tax Advances has the meaning set forth in Section 6.7(d).
TM has the meaning set forth in Section 7.2.
Total Disability means the inability of a Limited Partner substantially to perform the services required of such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of sickness, accident or otherwise.
Withdraw or Withdrawal with respect to a Partner means a Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, Total Disability, Incompetence, removal, resignation or retirement, whether such is voluntary or involuntary) unless the context shall limit the type of withdrawal to a specific reason and Withdrawn with respect to a Partner means, as aforesaid, a Partner who has ceased to be a partner of the Partnership (except as a Retaining Withdrawn Partner).
Withdrawal Date means, with respect to any Withdrawn Partner, the date on which such Withdrawn Partner ceases to be a Partner of the Partnership.
Withdrawn Partner means a Partner whose Interest in the Partnership has been terminated for any reason including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal representatives of any such Partner.
Section 1.2 Terms Generally. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term person includes individuals, partnerships (including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words include, includes and including shall be deemed to be followed by the phrase without limitation.
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ARTICLE II
GENERAL PROVISIONS
Section 2.1 Conversion; Formation. Effective as of January 1, 2018, to the maximum extent permitted by law (i) all of the organizational documents of the Company (including the certificate of formation and the LLC Agreement of the Company) are replaced and superseded in their entirety by this Agreement in respect of all periods beginning on or after the January 1, 2018, (ii) all of the limited liability company interests in the Company issued and outstanding immediately prior to the January 1, 2018 are converted to all of the Interests in the Partnership, (iii) upon execution of a counterpart signature page to this Agreement Blackstone Holdings III L.P., a Québec société en commandite, is hereby admitted to the Partnership as the general partner of the Partnership and shall have no economic Interest or other interest in the Partnership, and (iv) upon its admission to the Partnership in accordance with the terms hereof each Limited Partner is bound to this Agreement.
Section 2.2 General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited Partners or Special Partners. The General Partner as of the date hereof is Blackstone Holdings III L.P. and the Limited Partners as of the date hereof are those persons shown as Limited Partners in the books and records of the Partnership, and the Special Partners as of the date hereof are persons shown as Special Partners on the signature pages hereof.
Section 2.3 Continuation; Name; Foreign Jurisdictions. The Partnership is BREIT Special Limited Partner L.P. The certificate of limited partnership of the Partnership may be amended and/or restated from time to time by the General Partner. The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business.
Section 2.4 Term. The term of the Partnership shall continue unless and until the Partnership is dissolved as provided herein.
Section 2.5 Purpose; Powers.
(a) The purpose of the Partnership shall be, directly or indirectly through subsidiaries or Affiliates, (i) to serve as a direct or indirect general partner, special limited partner and/or limited partner of the Funds or other partnerships and/or as a member of one or more limited liability companies, (ii) to invest in, and acquire, directly or indirectly, partnership interests, limited liability company interests and/or other equity interests in, and/or securities of, any one or more limited partnerships, limited liability companies and/or other entities, and/or receive allocations, fees, distributions and other payments, directly or indirectly, from any one more of such limited partnerships, limited liability companies and/or other entities, in each case as the General Partner shall determine, (iii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by the General Partner and as are permitted under the Partnership Act and the applicable Fund Agreements, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time; (iv) any other lawful purpose, and (v) to do all things necessary, desirable, convenient and/or incidental thereto.
(b) In furtherance of its purpose, the Partnership shall have all powers necessary, suitable or convenient for the accomplishment of its purposes, alone or with others, as principal or agent, including the following:
(i) to be and become a direct or indirect general or limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of investments or the acquisition, holding or disposition of investments or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnerships business, and to take any action in connection therewith;
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(ii) do any and all acts on behalf of the Funds (subject to applicable Fund Agreements) and exercise all rights and remedies thereof with respect to its interest in any Person, firm, corporation or other entity, including, without limitation, the voting or lending of investments, participation in arrangements with creditors, the institution and settlement or compromise of suits and administrative proceedings and other similar matters;
(iii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in investments and securities or other property or direct or indirect interests therein, whether such investments and securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, investments or securities or other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
(iv) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not;
(v) to invest and reinvest the cash assets of the Partnership in money-market or other short term investments;
(vi) to hold, receive, mortgage, pledge, grant security interests over, lease, transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the Partnership;
(vii) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage, pledge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy, sell, pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(viii) make, in its sole discretion, any and all elections for U.S. federal, state, local and non-U.S. tax purposes;
(ix) to lend any of its property or funds, either with or without security, at any legal rate of interest or without interest;
(x) to have and maintain one or more offices within or without the State of Delaware, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the maintenance of such office or offices;
(xi) to open, maintain and close accounts, including margin accounts, with brokers;
(xii) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
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(xiii) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants, both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xiv) to form or cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic, and to form or cause to be formed and be a member or manager or both of one or more limited liability companies;
(xv) to enter into, make and perform all contracts, agreements and other undertakings as may be necessary, convenient or advisable or incident to carrying out its purposes;
(xvi) to sue and be sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xvii) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or investments or other property of the Partnership, or any combination thereof; and
(xviii) to take such other actions necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Delaware and other applicable law.
Section 2.6 Registered Office; Place of Business; Registered Agent. The Partnership shall maintain an office and principal place of business at 345 Park Avenue, New York, New York 10154 or such other place or places as the General Partner may designate from time to time. The Partnership shall maintain a registered office at c/o Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 2010, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The name and address of the registered agent of the Partnership for service of process on the Partnership in the State of Delaware shall be Intertrust Corporate Services Delaware, Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The General Partner may from time to time change the registered agent or office by an amendment to the certificate of limited partnership of the Partnership.
ARTICLE III
MANAGEMENT
Section 3.1 General Partner.
(a) Blackstone Holdings III L.P. is the General Partner as of the date hereof. The General Partner shall cease to be the General Partner only if it (i) Withdraws from the Partnership for any reason (ii) consents in its sole discretion to resign as the General Partner or (iii) a Final Event with respect to it occurs. The General Partner may not be removed without its consent. There may be one or more General Partners. In the event that one or more other General Partners is admitted to the Partnership as such, all references herein to the General Partner in the singular form shall be deemed to also refer to such other General Partners as may be appropriate. The relative rights and responsibilities of such General Partners will be as agreed upon from time to time between them.
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(b) Upon the Withdrawal from the Partnership or voluntary resignation of the last remaining General Partner, all of the powers formerly vested therein pursuant to this Agreement and the Partnership Act shall be exercised by a Majority in Interest of the Partners.
Section 3.2 Partner Voting, etc.
(a) Except as otherwise expressly provided herein and except as may be expressly required by the Partnership Act, Partners (including Special Partners), other than General Partners, as such shall have no right to, and shall not, take part in the management or control of the Partnerships business or act for or bind the Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein.
(b) To the extent a Partner is entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner (or any Affiliate thereof) in such matter.
(c) Meetings of the Partners may be called only by the General Partner.
(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided by the General Partner requesting the consent, approval or vote (including, without limitation, with respect to any amendments pursuant to Section 7.14) of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent or approval thereto.
Section 3.3 Management. (a) The management, control and operation of the Partnership and the formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall have full control over the business and affairs of the Partnership, and shall, in its discretion, exercise all powers necessary and convenient for the purposes of the Partnership, including those enumerated in Section 2.5, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in its discretion, subject only to the express terms and conditions of this Agreement (including Section 7.4).
(b) Notwithstanding any provision of this Agreement to the contrary, the Partnership is hereby authorized, without the need for any further act, vote or consent of any Partner, (i) to execute and deliver, and to perform the Partnerships obligations under, each agreement of the Partnership (including, without limitation, the applicable Fund Agreements), including, without limitation, serving as the managing member, general partner, special limited partner or limited partner, as the case may be, of the Funds, (ii) to execute and deliver the applicable Fund Agreements, as amended, restated and/or supplemented, and to perform the Partnerships obligations, and to cause the Funds (subject to the applicable Fund Agreements) to perform their respective obligations, under the applicable Fund Agreements, (iii) to execute and deliver, and to perform the Partnerships obligations, under the governing agreements of any other partnership, limited liability company, other company, corporation or other entity (each a Partnership Affiliate) of which the Partnership is to become a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate and (iv) to take any action, in the applicable capacity, contemplated by or arising out of any applicable Fund Agreements.
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(c) The General Partner and any other person designated by the General Partner, each acting individually, is hereby authorized and empowered, as an authorized signatory of the Partnership (the General Partner hereby authorizing and ratifying any of the following actions):
(i) to execute and deliver and/or file (in the name and on behalf of the Partnership) any agreement of the Partnership (including, without limitation, the applicable Fund Agreements) or of the Funds (including, without limitation, the applicable Fund Agreements) and any amendments, restatements and/or supplements thereof, the certificate of limited partnership of the Partnership (and any amendments, restatements and/or supplements of any of the foregoing) and any other certificates, notices, applications and other documents (and any amendments, restatements and/or supplements thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership or the Funds to qualify to do business in a jurisdiction in which the Partnership or the Funds desires to do business; or
(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership and/or in the name and on behalf of the Partnership), (A) such documents, instruments, certificates and agreements as may be necessary or desirable in furtherance of the Partnerships or the Funds purposes, (B) any certificates, forms, notices, applications and other documents to be filed with any government or governmental or regulatory body on behalf of the Partnership or the Funds, (C) any certificates, forms, notices, applications and other documents that may be necessary or advisable in connection with any bank account of the Partnership or the Funds, and all checks, notes, drafts and other documents of the Funds that may be required in connection with any such bank account or any banking facilities or services that may be utilized by the Partnership or the Funds, (D) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.3(c), each acting individually, shall be deemed to have been adopted by the Partners, the Partnership or the Funds, as applicable, for all purposes), and (E) any amendments, restatements and/or supplements of any of the foregoing.
The authority granted to any person (other than the General Partner) in this Section 3.3(c) may be revoked at any time by the General Partner by an instrument in writing signed by the General Partner.
Section 3.4 Responsibilities of Partners.
(a) Unless otherwise determined by the General Partner in a particular case, each Limited Partner (other than Special Partner) shall devote substantially all his or her time and attention to the businesses of the Partnership and its Affiliates, and each Special Partner shall not be required to devote any time or attention to the businesses of the Partnership or its Affiliates.
(b) All outside business or investment activities of the Partners (including outside directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
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Section 3.5 Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent permitted by law, no Partner nor any of such Partners representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a Covered Person and, collectively, the Covered Persons) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause) unless there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its duties under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the extent of the Partnerships assets (including, without limitation, the remaining capital commitments of the Partners) each Covered Person from and against any and all claims, damages, losses, costs, expenses and liabilities (including, without limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.5, Losses), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Persons management of the affairs of the Partnership or which relate to or arise out of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its share of such Losses in accordance with such Covered Persons Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave rise to such Losses. To the fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the approval of the General Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the Covered Person to repay such amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.5(b), and the Partnership and its Affiliates shall have a continuing right of offset against such Covered Persons interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person
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to satisfy such repayment obligation. If a Partner institutes litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partners Interests and remaining capital commitment, for such Partners pro rata share of the Partnerships expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover losses, claims, damages or liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.5(b). The General Partner shall have the authority to enter into separate agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this Section 3.5(b).
(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the Partnerships obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing the Funds and/or a particular portfolio entity through which an investment is indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority (to the extent available and permitted pursuant to the terms of the applicable Fund Agreement and applicable insurance policies): first, out of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or the Funds; second, by the applicable portfolio entity through which such investment is indirectly held and third, by the Funds (only to the extent the foregoing sources have been exhausted).
(B) The Partnerships obligation, if any, to indemnify or advance expenses to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from the Funds and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by the Funds and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against the Funds and/or such portfolio entity in respect of such advancement or payments (to the extent available and permitted pursuant to the terms of the applicable Fund Agreement and applicable insurance policies). The General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of Blackstone, which shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
Section 3.6 Representations of Partners. (a) Each Limited Partner and Special Partner by execution of this Agreement (or by otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by the General Partner, that such Partner is acquiring each of such Partners Interests for such Partners own account for investment and not with a view to resell or distribute the same or any part thereof, and that no other person has any interest in any such Interest or in the rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the terms hereof). Each Limited Partner and Special Partner represents and warrants that he or she understands that the Interests have not been registered under the Securities Act, and therefore such Interests may not be resold without registration under such act or exemption from such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner and Special Partner represents and warrants, unless otherwise agreed to by the General Partner in writing, that such Partner is both an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act (an Accredited Investor),
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and a qualified purchaser or a knowledgeable employee within the meaning of the Investment Company Act (and the rules and regulations promulgated thereby) (a Qualified Purchaser). Each Limited Partner and Special Partner represents that such Partner has such knowledge and experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that he or she is able to bear the economic risk of such investment. Each Limited Partner and Special Partner represents that such Partners overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Partners net worth and the Partner has no need for liquidity in the Partners investment in Interests. Each Limited Partner and Special Partner represents that to the full satisfaction of the Partner, the Partner has been furnished any materials that such Partner has requested relating to the Partnership and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of Interests and any matters pertaining thereto and to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the Partner has consulted to the extent deemed appropriate by the Partner with the Partners own advisors as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Partner.
(b) Each Limited Partner and Special Partner agrees that the representations and warranties contained in paragraph (a) above shall be true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any investment, and such Partner hereby agrees that such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall serve as confirmation thereof.
Section 3.7 Tax Representation and Further Assurances.
(a) Each Limited Partner and Special Partner, upon the request of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partners or the Partnerships obligations under applicable law or to carry out the provisions of this Agreement.
(b) Each Limited Partner and Special Partner certifies that (A) if the Limited Partner or Special Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner or Special Partners name, social security number (or, if applicable, employer identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W 9, Request for Taxpayer Identification Number Certification (W-9) or otherwise are correct and (ii) the Limited Partner or Special Partner will complete and return a W-9 and (y) (i) the Limited Partner or Special Partner is a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or (B) if the Limited Partner or Special Partner is not a United States person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) (W-8BEN), IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (W-8BEN-E), or other applicable form, including but not limited to IRS Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting (W-8IMY), or otherwise is correct and (ii) the Limited Partner or Special Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN, W-8BEN-E or W-8IMY, and (y) (i) the Limited Partner or Special Partner is not a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited Partner and Special Partner agrees to provide such cooperation and assistance, including but not limited to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably requested by the Partnership or the General Partner.
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(c) Each Limited Partner and Special Partner acknowledges and agrees that the Partnership and the General Partner may release confidential information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partners investment in the Partnership if the Partnership or the General Partner, in its or their sole discretion, determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be treated as a breach of any restriction upon the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any of their Affiliates for any form of damages or liability as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides information that is in anyway materially misleading, or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnerships obligations, the General Partner reserves the right to take any action and pursue any remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partners action or inaction from amounts otherwise distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1 Capital Contributions by Partners.
(a) Each Limited Partner may be required to make capital contributions to the Partnership at such times and in such amounts as may be determined by the General Partner from time to time or as may be mutually agreed (including, where applicable, as set forth in such Limited Partners Admission Letter). Special Partners shall not be required to make capital contributions to the Partnership except as specifically set forth in this Agreement or as they otherwise agree; provided, that the General Partner and any Special Partner may agree from time to time that such Special Partner shall make an additional capital contribution to the Partnership.
(b) Each capital contribution by a Partner shall be credited to the appropriate Capital Account (or sub account) of such Partner in accordance with Section 5.2 and maintained in the books and records of the Partnership.
(c) The General Partner may elect on a case-by-case basis with respect to any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partner that is also an executive officer of Blackstone) to (i) cause the Partnership to loan to any such Partner the amount of any capital contribution to the Partnership by such Partner on terms determined by the General Partner, (ii) permit any such Partner to make a required capital contribution to the Partnership in installments on terms determined by the General Partner or (iii) permit any such Partner to incur indebtedness to the Lender or Guarantor for the purpose of financing the purchase of an Interest in the Partnership and/or the amount of one or more capital contributions to the Partnership, which indebtedness shall be evidenced by an Investor Note and secured by such Interest, all other Interests of such Partner in the Partnership (if any) and, if applicable, interests of such Partner in any Blackstone Collateral Entities, in each case on terms which were or are approved by the General Partner.
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Section 4.2 Interest. There shall be no interest on the balances of the Partners Capital Accounts.
Section 4.3 Partial Withdrawals of Capital. Each Partner may make partial withdrawals in respect of such Partners Capital Account(s) in such amounts and at such times as may be permitted by the General Partner from time to time. Payments with respect to any such partial withdrawals will be made at such times and in cash or in kind as may be determined by the General Partner.
ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1 General Accounting Matters.
(a) Net Income (Loss) shall be determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b) Net Income (Loss) means, with respect to any accounting period, the sum of: (i) Fund Net Income (Loss) for such period, (ii) Other Net Income (Loss) for such period, and (iii) any net income (loss) relating to the Performance Allocation (including any property received from each Fund with respect thereto) for such period. The General Partner may from time to time (i) establish additional separate categories of Net Income (Loss) and/or subcategories within any one or more categories of Net Income (Loss) (each of which subcategories for purposes of this Agreement shall also be deemed a separate category of Net Income (Loss)) with respect to the Partnership as it may determine and (ii) calculate and allocate Net Income (Loss) for each such category on a separate basis.
(c) Net Income (Loss) with respect to any accounting period shall be determined in accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not otherwise taken into account in computing Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its adjusted tax basis for U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset in the books of the Partnership pursuant to Regulation Section 1.704-1 (b) (2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing Net Income (Loss) pursuant to this definition shall be treated as deductible items; (v) any income that is payable to Partnership employees in respect of phantom interests awarded by the General Partner to employees shall be included as an expense in the calculation of Net Income (Loss), and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of the Partnership, General Partner and other Affiliates of the Partnership shall be allocated among the Partnership, General Partner and such Affiliates as determined by the General Partner. Any adjustments to Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items shall be made in accordance with U.S. generally accepted accounting principles (GAAP); provided, that the General Partner shall not
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be required to make any such adjustments; provided further, that the General Partner may elect from time to time to calculate and allocate Net Income (Loss) attributable to any item of income or expense or any investment of the Partnership on a basis separate from the Partnerships other business.
(d) An accounting period shall be a Fiscal Year, except that, at the option of the General Partner, an accounting period will terminate and a new accounting period will begin on the admission date of an additional Partner or the Withdrawal Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year, or on any other date determined by the General Partner in its sole discretion. If any event referred to in the preceding sentence occurs and the General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as its deems appropriate to the Partners Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations or adjustments to Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners average Profit Sharing Percentages during such accounting period.
(e) In establishing Profit Sharing Percentages pursuant to Section 5.3, the General Partner may consider such factors as it deems appropriate in its sole discretion.
(f) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this Agreement shall be made by the General Partner and approved by the Partnerships independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law, no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any successor thereto.
Section 5.2 Capital Accounts.
(a) There shall be established for each Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or more Capital Accounts (or sub accounts) as the General Partner may deem to be appropriate for purposes of accounting for such Partners interests in the capital and Net Income (Loss) of the Partnership. A separate Capital Account (or sub account) shall be established for each Partner with respect to Fund Net Income (Loss), Other Net Income (Loss), the Performance Allocation and Capital Account Interests, provided that each Partner shall have a single Capital Account for U.S. federal income tax purposes. In addition, the General Partner may also establish separate Capital Accounts (or sub accounts) for each Partner with respect to any other categories of Net Income (Loss) and Capital Account Interests (if any) as it may determine in its sole discretion.
(b) As of the end of each accounting period or, in the case of a capital contribution to the Partnership by one or more of the Partners or a distribution by the Partnership to one or more of the Partners, at the time of such contribution or distribution, (i) the appropriate Capital Accounts (or sub accounts) of each Partner shall be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership during such accounting period or other Capital Account Interests assigned by the General Partner and (B) the Net Income allocated to such Partner in respect of such Capital Account (or sub account) for such accounting period; and (ii) the appropriate Capital Accounts (or sub accounts) of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the Carrying Value of any property (net of liabilities assumed by such Partner and the liabilities to which such property is subject) distributed by the Partnership to such Partner during such accounting period and (y) the Net Loss allocated to such Partner in respect of such Capital Account (or sub account) for such accounting period.
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Upon the receipt by the Partnership of cash or other property, including with respect to the Performance Allocation, the General Partner may allocate such cash or other property amongst the Capital Accounts (or sub accounts) of the Partners. To the extent not provided for in the preceding sentence, the Capital Accounts of the Partners shall be adjusted and maintained in accordance with the rules of Regulations Section 1.704-1(b)(2)(iv), as the same may be amended or revised. Any references in this Agreement to the Capital Account of a Partner shall be deemed to refer to such Capital Account as the same may be credited or debited from time to time as set forth above. In the event of any Transfer of any Interest in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Interest.
Section 5.3 Profit Sharing Percentages.
(a) On or about the beginning of each annual accounting period (or at such other times as determined by the General Partner in its sole discretion), the General Partner shall establish the profit sharing percentage (the Profit Sharing Percentage) of each Partner in each category of Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a), taking into account such factors as the General Partner deems appropriate, including those referred to in Section 5.1. The General Partner may establish different Profit Sharing Percentages for any Partner on a Fund-by-Fund basis with respect to each different category of Net Income (Loss) for each such Fund (including, without limitation, Fund Net Income (Loss), Other Net Income (Loss) and the Performance Allocation) as it may determine in its sole discretion. The Profit Sharing Percentages for any Partner with respect to each different category of Net Income (Loss) for any individual Fund (including, without limitation, Fund Net Income (Loss), Other Net Income (Loss) and the Performance Allocation) may be the same or different as the General Partner may determine in its sole discretion, subject to legal, tax regulatory and other considerations. The Profit Sharing Percentage(s) of any Partner for any annual accounting period may be adjusted in the case of the Withdrawal of a Partner pursuant to Section 6.5(d) and in the case of the admission of any Partner to the Partnership as an additional Partner pursuant to Section 6.1(b). Notwithstanding the foregoing, the General Partner may also adjust the Profit Sharing Percentage(s) of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion. For the avoidance of doubt, the General Partner shall take into account and exclude the Partnerships capital contributions and related interests in the Funds made prior to a Partners admission to the Partnership in determining such Partners Capital Account balance and Profit Sharing Percentage(s).
(b) The General Partner may elect to allocate to the Partners less than 100% of the Profit Sharing Percentages of any category of Net Income (Loss) for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of Profit Sharing Percentages (any remainder of such Profit Sharing Percentages shall be the General Partners). In connection with the foregoing, the General Partner shall take such other actions and make such adjustments (including to the Partnerships books and records) as the General Partner determines are necessary or appropriate in its discretion.
(c) Unless the General Partner otherwise determines, when a Partner has been assigned a Capital Account Interest, such Partner will have a 100% Profit Sharing Percentage in the Net Income (Loss) related to such Capital Account Interest.
Section 5.4 Allocations of Net Income (Loss). Except as otherwise provided in this Agreement, Net Income (Loss) and, to the extent necessary, individual categories thereof or components of income, gain, loss or deduction, of the Partnership shall be allocated among the Partners in a manner that as closely as possible gives economic effect to the provisions of this Article V and the other relevant provisions of this Agreement, as determined in the reasonable discretion of the General Partner.
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If the Partnership disposes of property in a taxable transaction or otherwise engages in a taxable transaction in order to distribute the proceeds thereof to certain Partners, including in connection with a distribution in-kind of such property or assignment of a Capital Account Interest in such property with respect to other Partners, then, for U.S. federal income tax purposes only, taxable gain and taxable loss on the property disposed or other transaction shall be specially allocated among the Partners such that, to the extent possible, Partners who receive cash or other proceeds from such disposition or other transaction shall be allocated the taxable gain or taxable loss related to such disposition or other transaction equal to the amount of taxable gain or loss they would have been allocated, with respect to the amount of the property sold or other transaction used to fund the distribution on their account, if an additional amount of such property had instead been the subject of a disposition or other transaction by the Partnership instead of having been distributed in kind or assigned as a Capital Account Interest to such Partners. Limited Partners who receive in kind distributions or who are assigned a Capital Account Interest shall be allocated no taxable gain or loss with respect to such in kind distribution or assignment of such Capital Account Interest. For purposes of this paragraph, taxable gain and taxable loss shall be computed without regard to any adjustments described in Section 734(b) or Section 743(b) of the Code to the extent determined in good faith by the General Partner to be appropriate.
Section 5.5 Liability of Partners. Except as otherwise provided in the Partnership Act, no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In addition, in no way does any of the foregoing limit any Partners obligations to make capital contributions as provided hereunder.
Section 5.6 Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or other requirements with respect to the Partners Interests in the Partnership as the General Partner may determine. The General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed, or any such requirements have been satisfied, (b) pay any distribution to any Partner that is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase or other requirements from time to time and (d) make such exceptions thereto as it may determine on a case-by-case basis.
Section 5.7 Distributions.
(a) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other property to the Partners at such times and in such amounts as are determined by the General Partner in its sole discretion; it being understood that certain Partners may receive cash while others may receive other property (e.g. Fund units) as determined by the General Partner in its sole discretion. The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of Net Income (Loss) established pursuant to Section 5.1(a). Subject to Section 5.1(e), distributions of cash or other property shall be made among Partners in accordance with their respective Profit Sharing Percentages with respect thereto and/or with respect to their Capital Account Interests, as applicable. In accordance with the terms of each Fund Agreement, with respect to each Partner, the General Partner shall elect to receive the Performance Allocation from each Fund in cash or property (and to redeem any property for other property in accordance with the terms of each Fund Agreement), as determined by the General Partner in its sole discretion.
(b) Subject to the Partnerships having sufficient available cash in the reasonable judgment of the General Partner, the Partnership may make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such Partner with respect
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to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other income taxes (including, without limitation, taxes under Section 1411 of the Code), (ii) taking into account the limitations on the deductibility of expenses and other items for U.S. federal income tax purposes and (iii) taking into account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner and (iv) taking into account any other distribution made to such Partner under this Agreement during such Fiscal Year. Notwithstanding the provisions of the foregoing sentence, the General Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution would be prohibited by § 17-607 of the Partnership Act.
(c) The General Partner may provide that a Partners right to distributions and investments of the Partnership may be subject to repurchase by the Partnership during such period as the General Partner shall determine (a Repurchase Period). Any Contingent distributions from investments subject to repurchase rights will be withheld by the Partnership and will be distributed to the recipient thereof (together with interest thereon at rates determined by the General Partner from time to time) as the recipients rights to such distributions become Non-Contingent (by virtue of the expiration of the applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of whether the applicable Repurchase Period has lapsed. If a Partner withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of such Partners Interest that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners in proportion to their respective Profit Sharing Percentages or if no other Partner has an applicable Profit Sharing Percentage, to the General Partner; provided, that the General Partner may allocate the Withdrawn Partners share of applicable unrealized investment income attributable to the period after the Withdrawn Partners Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have any applicable interests, except that, in any event, each Limited Partner shall be allocated a share of such unrealized investment income equal to its respective Profit Sharing Percentages with respect thereto.
Section 5.8 Business Expenses. The Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnerships business in accordance with rules and regulations established by the General Partner from time to time.
ARTICLE VI
ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1 Additional Partners. (a) Effective on the first day of any year (or on such other date as shall be determined by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the representations and certifications with respect to itself set forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with each additional Partner (which term, for the avoidance of doubt, shall include, without limitation, any substitute Partner) all terms of such additional Partners participation in the Partnership, including (as applicable and without limitation) such additional Partners initial capital contribution,
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and Profit Sharing Percentage(s). Each additional Partner shall have such voting rights as may be determined by the General Partner unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any such Special Partner being called a Nonvoting Special Partner).
(b) Except as may be otherwise determined by the General Partner, in the case of the admission of any Partner to the Partnership as an additional Partner, the Profit Sharing Percentages of the other Partners with respect to any category of Net Income (Loss) for any Fund may be reduced on a pro rata basis (based on such Partners respective Profit Sharing Percentages in effect immediately prior to such admission) by an amount equal to the Profit Sharing Percentage allocated to such new Partner with respect to each such category of Net Income (Loss) for each such Fund.
(c) Each additional Partner may be required to contribute to the Partnership a share of the Partnerships total capital, at such times and in such amounts as shall be determined by the General Partner or as may be mutually agreed (including, where applicable, as set forth in such Limited Partners Admission Letter) in accordance with Section 4.1.
(d) The admission of an additional Partner will be evidenced by (i) the execution of a counterpart copy of, or counter-signature page with respect to, this Agreement by such additional Partner or (ii) the execution of an amendment to this Agreement by all the Partners (including the additional Partner), as determined by the General Partner or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become a substitute or additional Limited Partner or Special Partner and to be bound by the terms of this Agreement and such writing being accepted by the General Partner on behalf of the Partnership (which, for the avoidance of doubt, may be in the form of an electronic acknowledgement (or click through) on a web-based portal maintained by Blackstone).
Section 6.2 Withdrawal of Partners. (a) Any Partner (i) may be removed from the Partnership at any time by the General Partner for any reason (including, but not limited to, as indicated in any Admission Letter applicable to such Partner) or no reason or (ii) shall be deemed to have withdrawn from the Partnership upon such Partners death, Total Disability or Incompetence. Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner. The General Partner generally intends to permit voluntary Withdrawals on the last day of the calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days prior written notice by the Partner to the General Partner (or on such shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may not voluntarily Withdraw without the consent of the General Partner if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business; provided further, that to the extent a Withdrawal relates to a Capital Account relating to an investment of capital in the Funds, such Withdrawal may only be made to the extent permitted by the applicable Fund Agreements.
(b) Upon the Withdrawal of any Partner, including by the occurrence of any Withdrawal event under the Partnership Act with respect to any Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein and the Partnership Act.
(c) If the General Partner determines that it shall be in the best interests of the Partnership for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such Partners Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with respect to such Partners Interest, as determined by the General Partner, as of a
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date specified in such notice, which date shall be on or after the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such Partners Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
(d) Upon the Total Disability of a Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such Partners Interest; provided, that the General Partner may elect to admit such Withdrawn Partner to the Partnership as a Nonvoting Special Partner with respect to such Partners Interest, with such Interest as the General Partner may determine. The determination of whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of agreement between the General Partner and such Partner, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
(e) The withdrawal from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the fullest extent provided by law.
Section 6.3 Partnership Interests Not Transferable. (a) No Partner may sell, assign, pledge or otherwise transfer or encumber all or any portion of such Partners Interest other than as permitted by written agreement between such Partner and the Partnership; provided, that this Section 6.3 shall not impair transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers required by trust agreements; provided further, that a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her Profit Sharing Percentage to any estate planning trust, limited partnership, or limited liability company with respect to which a Limited Partner controls investments related to any interest in the Partnership held therein (an Estate Planning Vehicle). Each Estate Planning Vehicle will be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting Special Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with respect to the Partnership, as the case may be. The General Partner may at its sole option exercisable at any time require any Estate Planning Vehicle to withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law or otherwise) of the whole or any portion of any Partners Interest shall have any right to be a Partner without the prior written consent of the General Partner (which consent may be withheld without giving reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including federal and state securities laws.
Section 6.4 Consequences upon Withdrawal of a Partner.
(a) The Withdrawal of a Partner shall not dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners (including the General Partner) and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining Partners being hereby authorized to continue the business of the Partnership without dissolution and hereby agreeing to do so).
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(b) The Partnership shall not be dissolved, in and of itself, by the Withdrawal of any Partner, but shall continue with the surviving or remaining Partners as partners thereof in accordance with and subject to the terms and provisions of this Agreement.
Section 6.5 Satisfaction and Discharge of a Withdrawn Partners Interest. (a) The terms of this Section 6.5 shall apply to the Interest of a Withdrawn Partner. The term Settlement Date shall mean the date as of which a Withdrawn Partners Interest in the Partnership is settled as determined under paragraph (b) below.
(b) Except where a later date for the settlement of a Withdrawn Partners Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partners Settlement Date shall be his or her Withdrawal Date; provided, that if a Withdrawn Partners Withdrawal Date or Settlement Date is not the last day of a month, then the General Partner may elect in its discretion for the Withdrawal Date or the Settlement Date to be the last day of the month following the Withdrawal Date or Settlement Date as the case may be. During the interval, if any, between a Withdrawn Partners Withdrawal Date and Settlement Date, such Withdrawn Partner shall (subject to such Partners Admission Letter, as applicable) have the same rights and obligations with respect to capital contributions, interest on capital, allocations of Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner, the General Partner shall promptly after such Withdrawn Partners Settlement Date (i) determine and allocate to the Withdrawn Partners Capital Account such Withdrawn Partners allocable share of the Net Income (Loss) of the Partnership for the period ending on such Settlement Date in accordance with Article V and (ii) credit the Withdrawn Partners Capital Account with interest in accordance with Section 5.2. In making the foregoing calculations, the General Partner shall be entitled to establish such reserves (including reserves, taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Except as provided in this Section 6.5(c) and unless otherwise determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any amounts in respect of the annual accounting period during which such Partner Withdraws from the Partnership (whether or not previously awarded or allocated) or any amounts in respect of prior annual accounting periods that have not been paid or allocated (whether or not previously awarded) as of such Withdrawn Partners Withdrawal Date.
(d) From and after the Settlement Date of a Withdrawn Partner, such Partners Profit Sharing Percentages in respect of each category of Net Income (Loss) of the Partnership shall be reduced to zero (or in the case of a partial Withdrawal, shall be reduced proportionately based on the percentage of the Interest withdrawn by the relevant Partner), and (i) the Profit Sharing Percentages of all of the remaining Partners shall be adjusted pro rata to their respective Profit Sharing Percentages in such category of Net Income (Loss) of the Partnership at such time or (ii) the Profit Sharing Percentages of the General Partner shall be adjusted to include the Profit Sharing Percentages of the Withdrawn Partner, or any combination of the foregoing, in each case, as determined by the General Partner in its sole discretion.
(e) Upon the Withdrawal from the Partnership of a Partner such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights), and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in any category of the Partnerships Net Income (Loss) (including, without limitation, Fund Net Income (Loss), Other Net Income (Loss) or the Performance Allocation) or in distributions, investments or other assets related to such Partners Interest. If a Partner Withdraws from the Partnership for any reason other than for Cause, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(g) below, in satisfaction and discharge in full of the Withdrawn
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Partners Interest in the Partnership, payment equal to the aggregate positive balance, if any, as of the Settlement Date of the Withdrawn Partners Capital Account (or portion thereof, as applicable), subject to all the terms and conditions of paragraphs (a)-(o) of this Section 6.5. If the amount determined pursuant to the language above is an aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(g) below; provided, that if the Withdrawn Partner was solely a Special Partner on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the Capital Accounts of a Withdrawn Partner who was solely a Special Partner, upon the settlement of such Withdrawn Partners Interest in the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners Capital Accounts in accordance with their respective Profit Sharing Percentages in the categories of Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of such Withdrawn Partners Settlement Date. In the settlement of any Withdrawn Partners Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or in anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to such Partners Interest resulted from such Partners death or Incompetence, such Partners estate or legal representative, as the case may be, may elect, at the time described below, to receive a Nonvoting Special Partner Interest and retain such Partners Profit Sharing Percentage in all (but not less than all) illiquid investments of the Partnership in lieu of a cash payment (or promissory note) in settlement of that portion of the Withdrawn Partners Interest. The election referred to above shall be made within 60 days after the Withdrawn Partners Settlement Date, based on a statement of the settlement of such Withdrawn Partners Interest in the Partnership pursuant to this Section 6.5.
(f) The General Partner may elect, in lieu of payment in cash of any amount payable to a Withdrawn Partner pursuant to paragraph (e) above, to have the Partnership issue the Withdrawn Partner a subordinated promissory note and/or to distribute in-kind to the Withdrawn Partner such Withdrawn Partners pro rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partners Interest. If any such distributions in-kind are made to a Withdrawn Partner in respect of its Interest under this paragraph (g), the amount described in paragraph (e) shall be reduced by the value of such distribution as valued on the latest balance sheet of the Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner.
(g) Within 120 days after the Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such Withdrawn Partners Interest in the Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to such Partner as shall be determined by the General Partner. The General Partner shall submit to the Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement of his or her Interest in the Partnership promptly after such amounts are determined by the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn Partner without examination of the accounting books and records of the Partnership or other inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided that such Withdrawn Partner shall otherwise rank pari passu in right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
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(h) If the aggregate reserves established by the General Partner as of the Settlement Date in making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be.
(i) Any amounts owed by the Withdrawn Partner to the Partnership or any of its Affiliates at any time on or after the Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to the date of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The due date of amounts payable by a Withdrawn Partner pursuant to Section 6.5(h) above shall be 120 days after a Withdrawn Partners Settlement Date. The due date of any amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
(j) At the time of the settlement of any Withdrawn Partners Interest in the Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the assignment, pledge, encumbrance or other transfer by such Withdrawn Partner of any Interest retained by such Withdrawn Partner, any securities or other investments distributed in-kind to such Withdrawn Partner or such Withdrawn Partners right to any payment from the Partnership.
(k) If a Partner is required to Withdraw from the Partnership with respect to such Partners Interest for Cause, then his or her Partner Interest shall be settled in accordance with paragraphs (a)-(o) of this Section 6.5; provided, however, that the General Partner may elect (but shall not be required) to determine that any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payments in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or distribution.
(l) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a period not exceeding two years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph (l) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such restrictions.
(m) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
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(n) The provisions of this Section 6.5 shall apply to any Partner relating to a Partner and to any transferee of any interest of such Partner pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(o) The Partnership will assist a Withdrawn Partner or its estate or guardian, as the case may be, in the settlement of the Withdrawn Partners Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or its estate.
(p) The Partnership may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the Partnership will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the Partnership will provide such reasonable assistance as and when it can so as not to interfere with the Partnerships day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(q) Each Partner hereby irrevocably appoints the General Partner as such Partners true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partners name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5, including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 6.6 Dissolution of the Partnership. The General Partner may dissolve the Partnership at any time on not less than 60 days notice of the dissolution date given to the other Partners. Upon the dissolution of the Partnership, and following the payment of creditors of the Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act, the Partners respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in Sections 5.7 and 6.5 which provide for allocations to the Capital Accounts of the Partners and distributions in accordance with the Capital Account balances of the Partners. The General Partner shall be the liquidator. In the event that the General Partner is unable to serve as liquidator, a liquidating trustee shall be chosen by affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special Partners).
Section 6.7 Certain Tax Matters. (a) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for federal, state and local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable law. To the extent Regulations promulgated pursuant to Subchapter K of the Code (including under Sections 704(b) and (c) of the Code) or other applicable law require allocations for tax purposes that differ from the foregoing allocations, the General Partner may determine the manner in which such tax allocations shall be made so as to comply more fully with such Regulations or other applicable law and, at the same time, preserve the economic relationships among the Partners as set forth in this Agreement. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Regulation Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its
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respective share of such net decrease during such year, determined pursuant to Regulations Sections 1.704-2(g) and 1.704-2(i) (5). The items to be so allocated shall be determined in accordance with Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a qualified income offset as provided in Regulations Section 1.704-1(b)(2)(ii)(d).
(b) Notwithstanding Section 6.7(a), if the Partnership realizes capital gains (including short-term capital gains) for federal income tax purposes (gains) for any fiscal year during or as of the end of which one or more Positive Basis Partners (as hereinafter defined) Withdraw from the Partnership pursuant to this Article VI, the General Partner may elect to allocate such gains as follows: (i) to allocate such gains among such Positive Basis Partners, pro rata in proportion to the respective Positive Basis (as hereinafter defined) of each such Positive Basis Partner, until either the full amount of such gains shall have been so allocated or the Positive Basis of each such Positive Basis Partner shall have been eliminated and (ii) to allocate any gains not so allocated to Positive Basis Partners to the other Partners in such manner as shall equitably reflect the amounts allocated to such Partners Capital Accounts pursuant to this Agreement.
As used herein, (i) the term Positive Basis shall mean, with respect to any Partner and as of any time of calculation, the amount by which its aggregate Capital Account balance (determined in accordance with Section 5.2) as of such time exceeds its adjusted tax basis, for Federal income tax purposes, in its interest in the Partnership as of such time (determined without regard to any adjustments made to such adjusted tax basis by reason of any transfer or assignment of such interest, including by reason of death, and without regard to such Partners share of the liabilities of the Partnership under Section 752 of the Code), and (ii) the term Positive Basis Partner shall mean any Partner who Withdraws from the Partnership and who has Positive Basis as of the effective date of its Withdrawal, but such Partner shall cease to be a Positive Basis Partner at such time as it shall have received allocations pursuant to clause (i) of the first paragraph of this Section 6.7(b) equal to its Positive Basis as of the effective date of its Withdrawal.
(c) The General Partner shall cause to be prepared all federal, state and local tax returns of the Partnership for each year for which such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several states and other relevant jurisdictions as to the treatment of any such item or any other method or procedure related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such item by the Partnership as reflected on the Form K-l or other information statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the Partnership, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Partnership Representative (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Partnership Representative in connection therewith (including, without limitation, attorneys, accountants and other experts fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any
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amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by the Partnership or the Partnership Representative arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim or (4) appeal, challenge or otherwise protest any adverse findings in any such audit conducted by the Partnership or the Partnership Representative or with respect to any such amended return or claim for refund filed by the Partnership or the Partnership Representative or in any such administrative or judicial proceedings conducted by the Partnership or the Partnership Representative. The Partnership and each Partner shall designate any person selected by the General Partner as the partnership representative within the meaning of Section 6223(a) of the Code (the Partnership Representative). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys fees and disbursements, incident to any such breach or violation. Each person (for purposes of this Section 6.7(c), called a Pass-Thru Partner) that holds or controls an interest as a Partner on behalf of, or for the benefit of, another person or persons, or which Pass-Thru Partner is beneficially owned (directly or indirectly) by another person or persons, shall, within 30 days following receipt from the Partnership Representative of any notice, demand, request for information or similar document, convey such notice or other document in writing to all holders of beneficial interests in the Partnership holding such interests through such Pass-Thru Partner.
(d) Each individual Partner shall provide to the Partnership copies of each federal, state and local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(e) To the extent the General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or with respect to any Partner, including pursuant to Section 6225 of the Code (Tax Advances), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on behalf of a Partner shall, at the option of the General Partner, (i) be promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of the Partnership otherwise payable to such Partnership. Whenever the General Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless all other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the withdrawal of any Partner from the Partnership or any transfer of a Partners interest.
Section 6.8 Special Basis Adjustments. In connection with a distribution of Partnership property to a Partner or any assignment or transfer of a Partnership interest permitted by the terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Code Section 754 and Regulation Section 1.754-1(b), to make an election to adjust the basis of the Partnerships property in the manner provided in Sections 734(b) and 743(b) of the Code.
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Submission to Jurisdiction; Waiver of Jury Trial.
(a) Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the termination, winding up or dissolution of the Partnership), whether arising during the existence of the Partnership or at or after its termination or during or after the winding up or dissolution of the Partnership shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A. in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within 30 days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
(b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this Section 7.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate, and (iii) irrevocably appoints the General Partner as such Partners agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
(C) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (C) OF THIS SECTION 7.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s) designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 7.1 and such parties agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 7.1 shall be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the Delaware Arbitration Act). If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of
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this Section 7.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable law, such invalidity shall not invalidate all of this Section 7.1. In that case, this Section 7.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 7.1 shall be construed to omit such invalid or unenforceable provision.
Section 7.2 Ownership and Use of the Blackstone Name. The Partnership acknowledges that Blackstone TM L.L.C. (TM), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154, (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors, successors or assigns) has licensed the Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the Permission of TM. All services rendered by the Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and its Affiliates and licensees. The Partnership understands that TM may terminate its right to use BLACKSTONE at any time in TMs sole discretion by giving the Partnership written notice of termination. Promptly following any such termination, the Partnership will take all steps necessary to change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or otherwise.
Section 7.3 Written Consent. Any action required or permitted to be taken by a vote of Partners at a meeting may be taken without a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 7.4 Admission Letters; Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered into separate letter agreements or other agreements or undertakings, which may be in the form of electronic acknowledgements and similar arrangements and related materials posted or maintained on one or more web-based portals established by Blackstone (collectively, Admission Letters) with certain Partners with respect to capital contributions, Profit Sharing Percentages, benefits or any other matter. Notwithstanding anything in this Agreement to the contrary, each Partners interest in the Partnership shall be subject to repurchase rights and other terms as indicated in such Partners Admission Letter (or other writing between the General Partner and such Partner). The General Partner may from time to time execute and deliver to the Partners schedules which set forth the then current Capital Account balances and Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever.
Section 7.5 Governing Law; Separability of Provisions. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to principles of conflict of laws. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be as provided therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement shall not be affected thereby.
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Section 7.6 Successors and Assigns. This Agreement shall be binding upon and shall, subject to the penultimate sentence of Section 6.3, inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a party hereto; provided that no person claiming by, through or under a Partner (whether such Partners heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI. Any Partner or Withdrawn Partner shall remain liable for the obligations under this Agreement of any transferee of all or any portion of such Partners or Withdrawn Partners interest in the Partnership, unless waived by the General Partner. Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, in any person other than the Partners and their respective legal representatives, heirs, successors and permitted assigns.
Section 7.7 Partners Will. Each Limited Partner and Withdrawn Partner shall include in his or her will a provision that addresses certain matters in respect of his or her obligation relating to the Partnership that is satisfactory to the General Partner, and each such Limited Partner and Withdrawn Partner shall confirm annually to the Partnership, in writing, that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Limited Partners or Withdrawn Partners Interest is transferred shall include a provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Limited Partner or Withdrawn Partner fails to comply with the provisions of this Section 7.7 after the Partnership has notified such Limited Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of such notice, the Partnership may withhold any and all distributions to such Limited Partner or Withdrawn Partner until the time at which such party complies with the requirements of this Section 7.7.
Section 7.8 Confidentiality; Restrictive Covenants. (a) By executing this Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any person other than the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership or the Funds that shall not be generally known to the public or the securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, that any corporate Partner may disclose any such information it is required by law, rule, regulation or custom to disclose. In addition, each Partner shall be subject to the restrictive covenants and other obligations set forth in such Partners Admission Letter. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information.
(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating, cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a Governmental Entity), including, but not limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any
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Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation, provided that in each case such communications and disclosures are consistent with applicable law. Each Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates attorney-client privilege or attorney work product or Blackstones trade secrets without the prior written consent of Blackstone.
Section 7.9 Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing (including telecopy, email or similar writing) and shall be given by hand delivery (including any courier service) or telecopy or email to any Partner at its address, telecopy number or email address shown in the Partnerships books and records or, if given to the General Partner or the Partnership, at the address of the Partnership provided herein or at the telecopy number or email address of the Partnership furnished to any Partner upon written request of such Partner. Each such notice shall be effective (i) if given by telecopy or email, upon dispatch, and (ii) if given by hand delivery, when delivered to the address of such Partner, the General Partner or the Partnership specified as aforesaid.
Section 7.10 Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute a single instrument.
Section 7.11 Power of Attorney. Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partners true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partners name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements, instruments, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Agreement, including without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership or an amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other state in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, Total Disability or Incompetence of such Partner.
Section 7.12 Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other rights and remedies available under applicable law.
Section 7.13 Legal Fees. Except as more specifically provided herein, in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any provision of this Agreement, the losing party to such dispute shall promptly reimburse the victorious party for all reasonable legal fees and expenses
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incurred in connection with such dispute (such determination to be made by the relevant adjudicator). Any amounts due under this Section 7.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and any amounts remaining unpaid after such date shall accrue interest at the Default Interest Rate.
Section 7.14 Modifications. Except as provided herein, this Agreement may be amended or modified at any time by the General Partner in its sole discretion upon notification thereof to the Limited Partners.
Section 7.15 Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. Subject to Section 7.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year first above written. In the event that it is impracticable to obtain the signature of any of the Partners to this Agreement, this Agreement shall be binding among the other Partners executing the same.
GENERAL PARTNER: | ||
Blackstone Holdings III, L.P. | ||
By: | Blackstone Holdings III GP L.P., its General Partner | |
By: | Blackstone Holdings III GP Management L.L.C., its General Partner |
By: |
/s/ John G. Finley |
Name: John G. Finley | ||
Title: Chief Legal Officer and Secretary | ||
LIMITED PARTNERS AND SPECIAL PARTNERS | ||
All Limited Partners and Special Partners now and hereafter admitted pursuant to powers of attorney now and hereafter granted to Blackstone Holdings III L.P. | ||
Blackstone Holdings III, L.P. | ||
By: | Blackstone Holdings III GP L.P., its General Partner | |
By: | Blackstone Holdings III GP Management L.L.C., its General Partner |
By: |
/s/ John G. Finley |
Name: John G. Finley | ||
Title: Chief Legal Officer and Secretary |
[Signature Page to Amended and Restated Limited Partnership Agreement of BREIT Special Limited Partner L.P.]
Exhibit 10.101
THE BLACKSTONE GROUP INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
BX EQUITY AWARD
DEFERRED HOLDINGS UNIT AGREEMENT
Participant: | Date of Grant: | |
Number of Deferred Units: |
1. Grant of Deferred Units. The Company hereby grants the number of deferred units (the Deferred Units) listed above to the Participant (the Award), effective as of the Date of Grant on the terms and conditions hereinafter set forth in this agreement, including any appendix, exhibit or addendum hereto (the Award Agreement). This grant is made pursuant to the terms of The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan (as amended, modified or supplemented from time to time, the Plan), which is incorporated herein by reference and made a part of this Award Agreement. Each Deferred Unit represents the unfunded, unsecured right of the Participant to receive a Blackstone Holdings Partnership Unit on the delivery date(s) specified in Section 4 hereof.
2. Definitions. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.
(a) Cause shall mean the occurrence or existence of any of the following as determined fairly, reasonably, on an informed basis and in good faith by the Administrator: (i) any breach by the Participant of any provision of the Non-Competition, Non-Solicitation and Confidentiality Agreements to which the Participant is a party, (ii) any material breach of any rules or regulations of the Company or its Affiliates applicable to the Participant, (iii) Participants deliberate failure to perform his or her duties to the Company or its Affiliates, (iv) Participants committing to or engaging in any conduct or behavior that is or may be harmful to the Company or its Affiliates in a material way; (v) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or its Affiliates; or (vi) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that the Participant individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) the Participants ability to function as an employee of the Company or its Affiliates, taking into account the employment required of the Participant and the nature of the Companys or its Affiliates business or (B) the business of the Company or its Affiliates.
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(b) Employment Agreement shall mean the Senior Managing Director Agreement (including all schedules and exhibits thereto), entered into between the Blackstone Holdings I L.P. (or any of its or the Companys Affiliates) and the Participant.
(c) Holdback Delivery Date shall mean the second anniversary with respect to each Vesting Date (each such date, a Scheduled Release Date); provided, however, that if the Participant terminates Employment prior to any such Scheduled Release Date, then the Holdback Delivery Date applicable to all remaining Retention Units shall be the second anniversary of the date of the Participants termination of Employment.
(d) Non-Competition, Non Solicitation and Confidentiality Agreement shall mean any agreement, and any attachments or schedules thereto, entered into by and between the Participant and the Company or its Affiliates, pursuant to which the Participant has agreed, among other things, to certain restrictions relating to non-competition, non-solicitation and/or confidentiality, in order to protect the business of the Company and its Affiliates.
(e) Qualifying Event shall mean, during the Participants Employment with the Company and its Affiliates, the Participants death, Disability or Retirement.
(f) Retirement shall mean the retirement of the Participant from his or her Employment with the Company and its Affiliates after (i) the Participant has reached age 65 and has at least five full years of service with the Company and its Affiliates, or (ii) (x) the Participants age plus years of service with the Company and its Affiliates totals at least 65, (y) the Participant has reached age 55, and (z) the Participant has had a minimum of five years of service.
(g) Retention Percentage shall mean 25% of the vested units until the corresponding Holdback Delivery Date for each Vesting Date.
(h) Retention Units shall mean, on any given date, the Deferred Units that have become Vested Deferred Units and which are retained by the Company (along with the underlying Blackstone Holdings Partnership Units) in accordance with Section 4 hereof.
(i) Vested Deferred Units shall mean those Deferred Units which have become vested pursuant to Section 3 or otherwise pursuant to the Plan.
(j) Vesting Dates shall mean each of the First Vesting Date, the Second Vesting Date and the Third Vesting Date.
(k) Vesting Reference Date shall mean .
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3. Vesting.
(a) Vesting General. Subject to the Participants continued Employment with the Company and its Affiliates, the Award shall vest on the applicable Vesting Dates as follows:
(i) percent of the Deferred Units granted hereunder shall vest on the third anniversary of the Vesting Reference Date (the First Vesting Date); an additional % of the Deferred Units granted hereunder shall vest on the fourth anniversary of the Vesting Reference Date (the Second Vesting Date); and the remaining % of the Deferred Units granted hereunder shall vest on the fifth anniversary of the Vesting Reference Date (the Third Vesting Date).
(b) Vesting Qualifying Events.
(i) Death or Disability. Upon the occurrence of a Qualifying Event on account of the death or Disability of the Participant, 100% of the Deferred Units granted hereunder shall vest (to the extent not previously vested) upon the date of such event.
(ii) Retirement. Upon the occurrence of a Qualifying Event on account of the Retirement of the Participant, (I) 50% of the then unvested Deferred Units shall remain eligible to vest upon each of the following scheduled Vesting Dates, and (II) all other unvested Deferred Units shall be cancelled immediately and the Participant shall automatically forfeit all rights with respect to such unvested Deferred Units upon the date of such event; provided that if, following the Participants Retirement, the Participant breaches any applicable provision of the Non-Competition, Non-Solicitation and Confidentiality Agreement to which the Participant is a party or otherwise engages in any Competitive Activity, the Participants Deferred Units which remain undelivered as of the date of such violation or engagement in Competitive Activity, as determined by the Administrator in its sole discretion, will be forfeited without payment. As a pre-condition to a Participants right to continued vesting and delivery of the Deferred Units following Retirement, the Administrator may require the Participant to certify in writing prior to each scheduled Vesting Date that the Participant has not breached any applicable provisions of the Participants Non-Competition, Non-Solicitation and Confidentiality Agreement or otherwise engaged in any Competitive Activity.
(c) Vesting Terminations. Except as otherwise set forth in Section 3(b), in the event the Participants Employment with the Company and its Affiliates is terminated for any reason, the portion of the Award that has not yet vested pursuant to Section 3(a) or 3(b) hereof (or otherwise pursuant to the Plan) shall be cancelled immediately and the Participant shall automatically forfeit all rights with respect to such portion of the Award as of the date of such termination.
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4. Delivery.
(a) Delivery General. The Company shall, on each applicable Vesting Date set forth below, deliver to the Participant the Blackstone Holdings Partnership Units underlying the Deferred Units which vest and become Vested Deferred Units on such date; provided that on each such Vesting Date, the Company shall retain, as Retention Units (and withhold the corresponding underlying Blackstone Holdings Partnership Units with respect thereto) a number of Vested Deferred Units so that the aggregate number of Retention Units at such time (expressed as a percentage of the aggregate number of Deferred Units awarded to the Participant which have vested as of such date) is equal to the applicable Retention Percentage. The Blackstone Holdings Partnership Units underlying Retention Units will be delivered to the Participant as and when, and to the extent that, the number of Retention Units at any time exceeds the applicable Retention Percentage, as illustrated in the table below, with the Blackstone Holdings Partnership Units underlying any remaining Retention Units delivered to the Participant upon the corresponding Holdback Delivery Date.
Annual
Vesting |
Cumulative
Vesting |
Retention
Percentage |
Annual
Delivery Percentage |
|||||||||||||
First Vesting Date |
||||||||||||||||
Second Vesting Date |
||||||||||||||||
Third Vesting Date |
(b) Delivery Qualifying Events.
(i) Death or Disability. Upon the occurrence of a Qualifying Event on account of the Participants death or Disability, the Company shall, within a reasonable time following the date of such event, deliver Blackstone Holdings Partnership Units to the Participant in respect of 100% of the Deferred Units which vest and become Vested Deferred Units on such Date and any then outstanding Retention Units (to the extent not previously delivered).
(ii) Retirement. Following the occurrence of a Qualifying Event on account of the Participants Retirement, the Company shall, on each subsequent Vesting Date, deliver Blackstone Holdings Partnership Units to the Participant in respect of those Deferred Units which vest and become Vested Deferred Units as of each following Vesting Date by application of Section 3(b)(ii); provided that the Company will retain such Retention Units as are necessary to meet the Retention Percentage until such requirement lapses upon the corresponding Holdback Delivery Date(s).
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(c) Delivery Terminations. Except as otherwise set forth in Section 4(b) or 4(d), in the event the Participants Employment with the Company and its Affiliates is terminated for any reason, the Company shall (i) within a reasonable time of such termination, deliver Blackstone Holdings Partnership Units to the Participant in respect of the Vested Deferred Units as of such date that are not Retention Units (if any), and (ii) deliver Blackstone Holdings Partnership Units to the Participant in respect of the Retention Units in accordance with the delivery schedule set forth in Section 4(a), until the corresponding Holdback Delivery Date(s), at which point the remaining Retention Units shall be delivered to the Participant.
(d) Forfeiture Cause Termination or Breach of Restrictive Covenants. Notwithstanding anything to the contrary herein, upon the termination of the Participants Employment by the Company or any of its Affiliates for Cause or upon the Participants breach of any of the restrictive covenants contained within an applicable Non-Competition, Non-Solicitation and Confidentiality Agreement, all outstanding Deferred Units (whether or not vested) and Retention Units shall immediately terminate and be forfeited without consideration and no further Blackstone Holdings Partnership Units with respect of the Award shall be delivered to the Participant or to the Participants legal representative, beneficiaries or heirs. Without limiting the foregoing, any Blackstone Holdings Partnership Units that have previously been delivered to the Participant or the Participants legal representative, beneficiaries or heirs pursuant to the Award and which are still held by the Participant or the Participants legal representative, or beneficiaries or heirs as of the date of such termination for Cause or such breach, shall also immediately terminate and be forfeited without consideration.
5. Change in Control. Notwithstanding anything to the contrary herein, in the event of a Change in Control, (i) 100% of the Deferred Units granted hereunder which then remain outstanding shall vest (to the extent not previously vested) upon the date of such Change in Control, and (ii) the Company shall deliver Blackstone Holdings Partnership Units to the Participant at the same times as would otherwise be delivered pursuant to Section 4(a); provided, however, if such Change in Control (or any subsequent Change in Control) would constitute a change in the ownership or effective control or a change in the ownership of a substantial portion of the assets of the Company (in each case within the meaning of Section 409A of the Code), the Company shall instead deliver Blackstone Holdings Partnership Units to the Participant in respect of 100% of the then outstanding Deferred Units and Retention Units (to the extent not previously delivered) on or within 10 days following such Change in Control.
6. Distributions. If on any date while Deferred Units are outstanding hereunder any cash distributions shall be paid on the Blackstone Holdings Partnership Units (whether vested or unvested), the Participant shall be entitled to receive, as of such distribution date, a cash payment equal to the product of (a) the number of Deferred Units, if any, held by the Participant as of the related distribution date, multiplied by (b) the per Blackstone Holdings Partnership Unit amount of such cash distribution.
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7. Adjustments Upon Certain Events. The Administrator shall, in its sole discretion, make certain substitutions or adjustments to any Retention Units or Deferred Units subject to this Award Agreement pursuant to Section 9 of the Plan.
8. No Right to Continued Employment. The granting of the Deferred Units evidenced by this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Employment of the Participant and shall not lessen or affect the Companys or its Affiliates right to terminate the Employment of such Participant.
9. No Rights of a Holder of Blackstone Holdings Partnership Units. Except as otherwise provided herein, the Participant shall not have any rights as a holder of Blackstone Holdings Partnership Units until such Blackstone Holdings Partnership Units have been issued or transferred to the Participant.
10. Restrictions. Any Blackstone Holdings Partnership Units issued or transferred to the Participant pursuant to Section 4 of this Award Agreement shall be subject to such stop transfer orders and other restrictions as the Administrator may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Blackstone Holdings Partnership Units are listed and any applicable U.S. or non-U.S. federal, state or local laws, and the Administrator may cause a notation or notations to be entered into the books and records of the Company to make appropriate reference to such restrictions.
11. Transferability. Unless otherwise determined or approved by the Administrator, no Deferred Units or Retention Units may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance not permitted by this Section 11 shall be void and unenforceable against the Company or any Affiliate.
12. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing (including electronically) and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by electronic means, by courier service, by fax, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12):
(a) If to the Company, to:
The Blackstone Group Inc.
345 Park Avenue
New York, New York, 10154
Attention: Chief Legal Officer
Fax:
(b) If to the Participant, to the address appearing in the personnel records of the Company or any Affiliate.
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13. Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any issuance or transfer due under this Award Agreement or under the Plan or from any compensation or other amount owing to the Participant, applicable withholding taxes with respect to any issuance or transfer under this Award Agreement or under the Plan and to take such action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes, including, without limitation, by reducing the number of Blackstone Holdings Partnership Units that would otherwise be transferred or issued pursuant to this Award Agreement. Without limiting the foregoing, the Administrator may, from time to time, permit the Participant to make arrangements prior to any vesting date or delivery date described herein to pay the applicable withholding taxes by remitting a check prior to the applicable vesting or delivery date.
14. Choice of Law. The interpretation, performance and enforcement of this Award Agreement shall be governed by the law of the State of New York.
15. Subject to Plan. By entering into this Award Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. All Deferred Units, Retention Units and Blackstone Holdings Partnership Units issued or transferred with respect thereof are subject to the Plan. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
16. Nature of Grant. By accepting the Deferred Units, the Participant acknowledges, understands and agrees that:
(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;
(b) the grant of Deferred Units is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Deferred Units or benefits in lieu of Deferred Units, even if Deferred Units have been granted in the past;
(c) all decisions with respect to future Deferred Units or other grants, if any, will be at the sole discretion of the Company;
(d) the Participant is voluntarily participating in the Plan;
(e) the Deferred Units and the underlying Blackstone Holdings Partnership Units, and the income from and value of same, are not intended to replace any pension rights or compensation;
(f) unless otherwise agreed with the Company, the Deferred Units and the underlying Blackstone Holdings Partnership Units, and the income from and value of same, are not granted as consideration for, or in connection with, the service the Participant may provide as a director of any affiliate of the Company;
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(g) the Deferred Units and the underlying Blackstone Holdings Partnership Units, and the income from and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, indemnification, pension or retirement or welfare benefits or similar payments, benefits or rights of any kind;
(h) the future value of the underlying Blackstone Holdings Partnership Units is unknown, indeterminable and cannot be predicted with certainty;
(i) no claim or entitlement to compensation or damages shall arise from the forfeiture of the Deferred Units resulting from the Participants termination of Employment (for any reason whatsoever, whether or not later found to be invalid or in breach of employment or other laws in the jurisdiction where the Participant is employed or otherwise rendering services, or the terms of his or her employment or service agreement, if any); and
(j) for purposes of the Deferred Units, the Participants Employment will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of his or her employment or service agreement, if any) as of the date that is the earlier of (i) the date he or she is no longer actively providing services to the Company or an Affiliate or (ii) the date he or she receives notice of termination of Employment from the Company or Affiliate, and unless otherwise expressly provided in this Award Agreement or determined by the Company, the Participants right to vest in the Deferred Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., the Participants period of service would not include any contractual notice period or any period of garden leave or similar period mandated under employment laws in the jurisdiction where the Participant is employed or otherwise rendering services, or the terms of his or her employment or service agreement, if any). The Administrator will have exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Deferred Units.
17. Non-U.S. and Country Specific Provisions. If the Participant resides in a country outside the United States or its territories, or is otherwise subject to the laws of a country other than the United States, the Deferred Units and any underlying Blackstone Holdings Partnership Units acquired under the Plan shall be subject to the additional terms and conditions set forth in Appendix A and to the terms and conditions set forth in Appendix B for the Participants country, if any. Moreover, if the Participant relocates outside the United States or its territories, the terms and conditions set forth in Appendices A and B will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.
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18. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participants participation in the Plan, or his or her acquisition or sale of the underlying Blackstone Holdings Partnership Units. The Participant should consult with his or her own tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
19. Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
20. Waiver. The Participant acknowledges that a waiver by the Company of breach of any provision of this Award Agreement shall not operate or be construed as a waiver of any other provision of the Award Agreement, or of any subsequent breach of this Award Agreement.
21. Entire Agreement. This Award Agreement contains the entire understanding between the parties with respect to the Deferred Units granted hereunder (including, without limitation, the vesting and delivery schedules described herein), and hereby replaces and supersedes any prior communication and arrangements between the Participant and the Company or any of its Affiliates with respect to the matters set forth herein and any other pre-existing economic or other arrangements between the Participant and the Company or any of its Affiliates.
22. Modifications. Notwithstanding any provision of this Award Agreement to the contrary, the Company reserves the right to modify the terms and conditions of this Award Agreement, including, without limitation, the timing or circumstances of the issuance or transfer of Blackstone Holdings Partnership Units to the Participant hereunder, to the extent such modification is determined by the Company to be necessary or advisable for legal or administrative reasons or to preserve the intended deferral of income recognition with respect to the Deferred Units and Retention Units until the issuance or transfer of Blackstone Holdings Partnership Units hereunder.
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23. Electronic Delivery and Acceptance. The Company, in its sole discretion, may decide to deliver any documents related to current or future participation in the Plan by electronic means. Electronic delivery of a document to the Participant may be via a Company e-mail system, an online or electronic system established and maintained by a third party administrator of the Plan, or by reference to a location on a Company intranet site to which the Participant has access. The Participant hereby agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company desires or may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other agreements, forms and communications), in connection with this and any other prior or future incentive award or program offered by the Company and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
24. Signature in Counterparts. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
[Signatures on next page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement.
THE BLACKSTONE GROUP INC. |
|
Name: |
THE PARTICIPANT1 |
|
Name: |
1 |
To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this award electronically, such acceptance shall constitute Participants signature hereof. |
11
APPENDIX A
to
THE BLACKSTONE GROUP INC.
DEFERRED UNIT AGREEMENT
ADDITIONAL TERMS AND CONDITIONS
FOR PARTICIPANTS OUTSIDE THE UNITED STATES
The following terms and conditions (where applicable) apply to Participants who reside outside the United States or its territories or who are otherwise subject to the laws of a country other than the United States.
1. Nature of Grant. The follow provision supplements Section 16 of the main body of this Award Agreement:
Neither the Company nor any Affiliate shall be liable for any foreign exchange rate fluctuation between the Participants local currency and the U.S. Dollar that may affect the value of the Deferred Units or any amounts due to the Participant pursuant to the settlement of the Deferred Units (in Blackstone Holdings Partnership Units or cash) or subsequent sale of underlying Blackstone Holdings Partnership Units acquired upon settlement.
2. Withholding. The following provisions supplement Section 13 of the main body of this Award Agreement:
The Participant acknowledges and agrees that, regardless of any action taken by the Company or the Affiliate employing the Participant (the Employer), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Deferred Units and the Participants participation in the Plan (Tax-Related Items) is and remains the Participants sole responsibility and may exceed the amount, if any, withheld by the Company or the Employer. The Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Deferred Units, including, but not limited to, the grant, vesting or settlement of the Deferred Units, the subsequent sale of Blackstone Holdings Partnership Units acquired pursuant to such settlement and the receipt of any distributions; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Deferred Units to reduce or eliminate the Participants liability for Tax-Related Items or achieve any particular tax result. If the Participant is subject to Tax-Related Items in more than one jurisdiction, the Participant acknowledges and agrees that the Company or Affiliate, as applicable, may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
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In addition to the withholding methods specified above in this Section 13, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all Tax-Related Items by (i) withholding from the proceeds of the sale of Blackstone Holdings Partnership Units acquired at vesting of the Deferred Units through a voluntary sale or through a mandatory sale arranged by the Company (on the Participants behalf pursuant to this authorization without further consent) or (ii) any other method of withholding determined by the Company and permitted by applicable law.
Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Participants jurisdiction(s), in which case the Participant may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Blackstone Holdings Partnership Units. If the obligation for Tax-Related Items is satisfied by withholding Blackstone Holdings Partnership Units that would otherwise be transferred or issued pursuant to this Award Agreement, for tax purposes, the Participant is deemed to have been issued the full number of Blackstone Holdings Partnership Units subject to the vested Deferred Units, notwithstanding that a number of the Blackstone Holdings Partnership Units are held back solely for the purpose of paying the Tax-Related Items.
The Company may refuse to issue the Blackstone Holdings Partnership Units or deliver the proceeds of the sale of Blackstone Holdings Partnership Units if the Participant fails to comply with his or her obligations in connection with the Tax-Related Items.
3. Data Privacy. For the purposes of complying with the General Data Protection Regulation (EU) 2016/679, relevant Participants will be provided with separate information in respect of the collection and processing of their personal data. For the purposes of the remainder of this clause 3 (of Appendix A) only, Participant means a Participant who resides outside of the European Union.
The Participant hereby explicitly, voluntarily and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participants personal data as described in this Award Agreement and any other Plan materials by and among, as applicable, the Employer, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing the Participants participation in the Plan.
The Participant understands that the Company and the Employer may hold certain personal information about the Participant, including, but not limited to, the Participants name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Blackstone Holdings Partnership Units or directorships held in the Company, details of any entitlement to Blackstone Holdings Partnership Units awarded, canceled, exercised, vested, unvested or outstanding in the Participants favor, for the purpose of implementing, administering and managing the Plan (Data).
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The Participant understands that Data will be transferred to Merrill Lynch, Pierce, Fenner & Smith Incorporated or such other stock plan providers as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. The Participant understands that those receiving the Data may be located in the United States or elsewhere, and that the applicable country (e.g., the United States) may have different data privacy laws and protections than the Participants country. The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Participant authorizes the Company, and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Participants participation in the Plan. The Participant understands that Data will be held as long as is necessary to implement, administer and manage the Participants participation in the Plan, as determined by the Company in its sole discretion. The Participant understands that he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, the Participant understands that he or she is providing the consents herein on a purely voluntary basis. If the Participant does not consent, or later seeks to revoke his or her consent, the Participants employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant Deferred Units or other equity awards under the Plan, or administer or maintain such awards. Therefore, the Participant understands that refusing or withdrawing his or her consent may affect the Participants ability to participate in the Plan. For more information on the consequences of the Participants refusal to consent or withdrawal of consent, the Participant understands that he or she may contact his or her local human resources representative.
4. Language. The Participant acknowledges that he or she is sufficiently proficient in English to understand the terms and conditions of the Award Agreement. Furthermore, if the Participant receives this Award Agreement or any other document related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
5. Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that the Participant may be subject to insider trading and/or market abuse laws based on the exchange on which the Blackstone Holdings Partnership Units are listed and in applicable jurisdictions including the United States and the Participants country or the brokers country, if different, which may affect the Participants ability to accept, acquire, sell or otherwise dispose of Blackstone Holdings Partnership Units or rights to Blackstone Holdings Partnership Units (e.g., Deferred Units) or rights linked to the value of Blackstone Holdings Partnership Units, during such times as the Participant is considered to have inside information regarding the Company (as defined by the laws or regulations in the applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant may be prohibited
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from (i) disclosing the inside information to any third party including colleagues of the Participant (other than on a need to know basis) and (ii) tipping third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. The Participant is responsible for ensuring compliance with any applicable restrictions and should consult with his or her personal legal advisor on this matter.
6. Foreign Asset/Account, Exchange Control and Tax Reporting. The Participant acknowledges that, depending on his or her country, the Participant may be subject to foreign asset and/or account reporting requirements and exchange control regulations which may affect his or her ability to acquire or hold Blackstone Holdings Partnership Units under the Plan or cash received from participating in the Plan (including from any distributions received or sale proceeds arising from the sale of Blackstone Holdings Partnership Units in a brokerage or bank account outside of the Participants country. The Participant may also be required to repatriate sale proceeds or funds received as a result of his or her participation in the Plan to his or her country through a designated bank and/or broker within a certain time after receipt. In addition, the Participant may be subject to tax payments and/or other reporting obligations in connection with any income realized under the Plan, and or from the sale of the underlying Blackstone Holdings Partnership Units. The Participant acknowledges that he or she is responsible for ensuring compliance with any such requirements and is advised to consult with his or her personal legal advisors, as applicable, to ensure compliance.
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APPENDIX B
TO
THE BLACKSTONE GROUP INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
SPECIAL EQUITY AWARD
DEFERRED UNIT AGREEMENT
COUNTRY-SPECIFIC TERMS AND CONDITIONS
Terms and Conditions
This Appendix B includes additional terms and conditions applicable to Participants in the countries below. These terms and conditions are in addition to, or, if so indicated, in place of, the terms and conditions set forth in the Award Agreement, including Appendix A. If the Participant is a citizen (or is considered as such for local purposes) of a country other than the country in which he or she is currently residing and/or working, or if he or she relocates to another country after the Deferred Units are granted, the Company will, in its discretion, determine the extent to which the terms and conditions contained herein will be applicable to the Participant.
Notifications
This Appendix B also includes information regarding securities law, exchange controls and certain other issues of which the Participant should be aware with respect to participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of January 2019. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant not rely on the information contained herein as the only source of information relating to the consequences of his or her participation in the Plan because the information may be out of date by the time he or she vests in the Deferred Units or sells Blackstone Holdings Partnership Units acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Participants particular situation, and the Company is not in a position to assure the Participant of a particular result. Accordingly, the Participant should seek appropriate professional advice as to how the relevant laws in his or her country may apply to the Participants particular situation.
Finally, if the Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which he or she is currently residing and/or working, or if the Participant relocates to another country after the Deferred Units are granted, the notifications contained herein may not be applicable to him or her in the same manner.
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AUSTRALIA
Notifications
Tax Information. Subdivision 83A-C of the Income Tax Assessment Act 1997 applies to the Deferred Units granted in accordance with the terms and conditions of the Plan and this Award Agreement (subject to the requirements of the Income Tax Assessment Act 1997).
BRAZIL
Terms and Conditions
Compliance with Law. By accepting the Deferred Units, the Participant acknowledges that he or she will comply with applicable Brazilian laws and pay any applicable Tax-Related Items associated with the vesting and settlement of the Deferred Units and the sale of Blackstone Holdings Partnership Units under the Plan.
Nature of Grant. The follow provision supplements
Section 16 of the main body of this Award Agreement and Section 1 of
Appendix A:
By accepting the Deferred Units, the Participant acknowledges that (i) the grant of Deferred Units is not part of normal or expected compensation for any reason whatsoever and will have no impact on Participants Employment or service relationship, (ii) the underlying Blackstone Holdings Partnership Units will be issued to the Participant only if the vesting conditions are met, and (iii) the value of the underlying Blackstone Holdings Partnership Units is not fixed and may increase or decrease without compensation to the Participant.
Notifications
Foreign Asset/Account Reporting Information. If the Participant is resident or domiciled in Brazil, the Participant will be required to submit an annual declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal to or greater than US$100,000. Assets and rights that must be reported include Blackstone Holdings Partnership Units acquired under the Plan. Foreign individuals holding Brazilian visas are considered Brazilian residents for purposes of this reporting requirement and must declare at least the assets held abroad that were acquired subsequent to the date of admittance as a resident of Brazil.
CANADA
Terms and Conditions
Delivery. Notwithstanding any discretion contained in Section 8 of the Plan, the grant of Deferred Units does not provide any right for the Participant to receive a cash payment and as provided in Section 4 of the main body of this Award Agreement, Vested Deferred Units will be satisfied through the delivery of Blackstone Holdings Partnership Units.
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Termination of Employment. The following provision replaces Section 16(j) of the main body of this Award Agreement:
(j) for purposes of the Deferred Units, the Participants Employment will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of his or her employment or service agreement, if any) as of the date that is the earlier of (i) the date of the Participants termination of Employment or (ii) the date the Participant is no longer actively providing service (regardless of any notice period or period of pay in lieu of such notice required under applicable Canadian employment laws (including, but not limited to statutory law, regulatory law and/or common law)). The Administrator will have exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Deferred Units (including whether the Participant may still be considered to be providing services while on a leave of absence).
Notifications
Securities Law Information. The Participant is permitted to sell Blackstone Holdings Partnership Units under the Plan through the designated broker appointed under the Plan, if any, provided the sale of the Blackstone Holdings Partnership Units place outside of Canada through the facilities of a stock exchange on which the Blackstone Holdings Partnership Units are listed (i.e., the New York Stock Exchange).
Foreign Asset/Account Reporting Information. Canadian resident Participants are required to report any specified foreign property on form T1135 (Foreign Income Verification Statement) if the total value of the specified foreign property exceeds C$ 100,000 at any time in the year. Specified foreign property includes Blackstone Holdings Partnership Units acquired under the Plan, and may include the Deferred Units. The Deferred Units must be reported (generally at a nil cost) if the C$ 100,000 cost threshold is exceeded because of other foreign property the Participant holds. If Blackstone Holdings Partnership Units are acquired, their cost generally is the adjusted cost base (ACB) of the Blackstone Holdings Partnership Units. The ACB ordinarily would equal the fair market value of the Blackstone Holdings Partnership Units at the time of acquisition, but if the Participant owns other Blackstone Holdings Partnership Units, this ACB may have to be averaged with the ACB of the other Blackstone Holdings Partnership Units. The form must be filed by April 30 of the following year. The Participant should consult with his or her personal legal advisor to ensure compliance with applicable reporting obligations.
CHINA
The following Terms and Conditions apply to Participants that are subject to the exchange control restrictions and regulations in the Peoples Republic of China (China), including the requirements imposed by the State Administration of Foreign Exchange (SAFE), as determined by the Company in its sole discretion.
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Terms and Conditions
Delivery. Notwithstanding Section 4 of this Award Agreement, delivery of Blackstone Holdings Partnership Units is conditioned upon the Company securing and maintaining all necessary approvals from SAFE and any other applicable government entities in China to permit the operation of the Plan in China, as determined by the Company it its sole discretion. If or to the extent the Company is unable to complete the registration or maintain the registration, no Blackstone Holdings Partnership Units subject to the Deferred Units for which a registration cannot be completed or maintained shall be issued. In this case, the Company retains the discretion to settle any Deferred Units in cash paid through local payroll in an amount equal to the fair market value of the Blackstone Holdings Partnership Units on the settlement date, subject to the Deferred Units less any Tax-Related Items.
Exchange Control Restrictions. Exchange control restrictions apply to the remittance of funds into and out of China. In the event that Blackstone Holdings Partnership Units are delivered upon settlement of the Deferred Units, the Participant understands and agrees that, pursuant to local exchange control requirements, he or she will be required to immediately repatriate the cash proceeds from the sale of Blackstone Holdings Partnership Units and any cash distributions paid on such Blackstone Holdings Partnership Units to China. The Participant further understands that, under local law, such repatriation of cash proceeds may need to be effectuated through a special exchange control account established by the Company, the Employer or any other Affiliate, and the Participant hereby consents and agrees that any proceeds from the sale of Blackstone Holdings Partnership Units or any cash distributions paid on such Blackstone Holdings Partnership Units may be transferred to such special account prior to being delivered to the Participant.
The proceeds may be paid to the Participant in U.S. dollars or local currency at the Companys discretion. In the event the proceeds are paid to the Participant in U.S. dollars, he or she understands that he or she will be required to set up a U.S. dollar bank account in China and provide the bank account details to the Employer and/or the Company so that the proceeds may be deposited into this account. If the proceeds are paid to the Participant in local currency, the Company is under no obligation to secure any particular exchange conversion rate and/or conversion date and the Company may face delays in converting the proceeds to local currency due to exchange control restrictions. The Participant agrees to bear any currency fluctuation risk between the time the Blackstone Holdings Partnership Units are sold or distributions are received and the time the proceeds are distributed through any such special exchange account. The Participant further agrees to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.
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DENMARK
Terms and Conditions
Exclusion from Termination Indemnities and Other Benefits. This provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
In accepting the Deferred Units, the Participant acknowledges that he or she understands and agrees that this grant relates to future services to be performed and is not a bonus or compensation for past services.
Notifications
Foreign Asset/Account Reporting Information. The prior rules that required the Participant to submit certain forms (Declaration V and Declaration K) to the Danish Tax Authorities reporting Blackstone Holdings Partnership Units held in foreign bank or brokerage accounts and deposit accounts with a foreign bank were eliminated as of January 1, 2019. Please note, however, that the Participant is required to report the foreign bank/brokerage accounts and their deposits and Blackstone Holdings Partnership Units held in foreign bank or brokerage accounts on his or her personal tax return under the section on foreign affairs and income.
FRANCE
Terms and Conditions
Language Consent. By Accepting the Award Agreement providing for the terms and conditions of the Participants grant, the Participant confirms having read and understood the documents relating to this grant (the Plan and the Award Agreement) which were provided in the English language. The Participant accepts the terms of these documents accordingly.
Consentement relatif à la réception d informations en langue anglaise. En acceptant le Contrat d Attribution décrivant les termes et conditions de l attribution, le Participant confirme ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan et le Contrat d Attribution) qui ont été communiqués en langue anglaise. Le Participant accepte les termes de ces documents en connaissance de cause.
Notifications
Foreign Asset/Account Reporting Information. The Participant may hold Blackstone Holdings Partnership Units acquired under the Plan provided the Participant declares all foreign bank and brokerage accounts (including accounts opened or closed during the tax year) in the Participants tax return. Failure to comply could trigger significant penalties.
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GERMANY
Notifications
Exchange Control Information. Cross-border payments in excess of 12,500 must be reported monthly to the German Federal Bank (Bundesbank). In the event that the Participant makes or receives a payment in excess of this amount, he or she must report the payment to Bundesbank electronically using the General Statistics Reporting Portal (Allgemeines Meldeportal Statistik) available via Bundesbanks website (www.bundesbank.de).
Foreign Asset/Account Reporting Information. German residents holding Blackstone Holdings Partnership Units must notify their local tax office of the acquisition of Blackstone Holdings Partnership Units when they file their tax returns for the relevant year if the value of the Blackstone Holdings Partnership Units exceeds 150,000 or in the unlikely event that the resident holds Blackstone Holdings Partnership Units exceeding 10% of the Companys capital.
HONG KONG
Terms and Conditions
Restrictions on Sale of Blackstone Holdings Partnership Units. Any Blackstone Holdings Partnership Units received at vesting are accepted as a personal investment. In the event the Deferred Units vest and Blackstone Holdings Partnership Units are issued to the Participant within six months of the Date of Grant, the Participant agrees that he or she will not sell any Blackstone Holdings Partnership Units acquired prior to the six month anniversary of the Date of Grant.
Notifications
Securities Law Information. WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. The Participant is advised to exercise caution in relation to the offer. If the Participant is in any doubt about any of the contents of this document, he or she should obtain independent professional advice. Neither the grant of the Deferred Units nor the issuance of underlying Blackstone Holdings Partnership Units upon vesting of the RSUs constitutes a public offering of securities under Hong Kong law and is available only to employees of the Company and any Affiliate. This Award Agreement, the Plan and other incidental communication materials distributed in connection with the Deferred Units (i) have not been prepared in accordance with and are not intended to constitute a prospectus for a public offering of securities under the applicable securities legislation in Hong Kong and (ii) are intended only for the personal use of each eligible employee of the Company or any Affiliate and may not be distributed to any other person.
INDIA
Notifications
Exchange Control Information. Indian residents must repatriate any proceeds from the sale of Blackstone Holdings Partnership Units acquired under the Plan or the receipt of any distributions paid on such Blackstone Holdings Partnership Units to India and convert the proceeds into local currency within a certain period after receipt (90 days for sale proceeds and 180 days for distributions, or such other period of time as may be required under
B-6
applicable regulations). The Participant will receive a foreign inward remittance certificate (FIRC) from the bank where he or she deposits the foreign currency. The Participant should maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation. The Participant acknowledges that it is the Participants sole responsibility to comply with the applicable exchange control laws in India.
Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including Blackstone Holdings Partnership Units held outside of India) in their annual tax returns. The Participant is responsible for complying with this reporting obligation and should consult with his or her personal tax advisor in this regard.
IRELAND
Terms and Conditions
Nature of Grant. The following provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
By accepting the Deferred Units, the Participant acknowledges that any Deferred Units granted to him or her by the Company are separate from any compensation or employment benefits offered to the Participant by the Employer, and that the Deferred Units shall not be considered employment-related compensation for any purposes, including any severance or termination payment made to the Participant by the Employer as a result of his or her termination of Employment.
ITALY
Terms and Conditions
Grant Terms Acknowledgment. By accepting the Deferred Units, the Participant acknowledges having received and reviewed the Plan and this Award Agreement, in their entirety and fully understands and accepts all provisions of the Plan and this Award Agreement. The Participant further acknowledges that he or she has specifically read and expressly approves the following provisions of this Award Agreement: Sections 3, 4, 13, 14, 22 and section 3 of Appendix A.
Notifications
Foreign Asset/Account Reporting Information. Italian residents who, at any time during the fiscal year, hold foreign financial assets (including cash and Blackstone Holdings Partnership Units) which may generate income taxable in Italy are required to report these assets on their annual tax returns (UNICO Form, RW Schedule) for the year during which the assets are held, or on a special form if no tax return is due. These reporting obligations will also apply to Italian residents who are the beneficial owners of foreign financial assets under Italian money laundering provisions. The Participant should consult his or her personal tax advisor to ensure compliance with applicable reporting obligations.
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JAPAN
Notifications
Foreign Asset/Account Reporting Information. The Participant is required to report the details of any assets held outside of Japan (including Blackstone Holdings Partnership Units acquired under the Plan as of December 31), to the extent such assets have a total net fair market value exceeding ¥50 million. Such report will be due by March 15 of the following year. The Participant should consult with his or her personal tax advisor to determine if the reporting obligation applies to his or her personal situation.
LUXEMBOURG
There are no country-specific provisions.
MEXICO
Labor Law Acknowledgment. These provisions supplement Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
By accepting the Deferred Units, the Participant understands and agrees that: (i) the Deferred Units are not related to the salary or other contractual benefits granted to the Participant by the Employer; and (ii) any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of the Participants Employment.
In addition, by signing below, the Participant further acknowledges having read and specifically and expressly approved the terms and conditions in this Award Agreement, in which the following is clearly described and established: (i) participation in the Plan does not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company and its Affiliates are not responsible for any decrease in the value of the underlying Blackstone Holdings Partnership Units.
Policy Statement. The invitation the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend and discontinue the Plan at any time, pursuant to the terms of the Plan, without any liability to the Participant.
The Company, with registered offices at 345 Park Avenue, New York, NY 10154, U.S., is solely responsible for the administration of the Plan and participation in the Plan. The acquisition of Blackstone Holdings Partnership Units does not, in any way, establish an employment relationship between the Participant and the Company since the Participant is participating in the Plan on a solely commercial basis and his or her sole employer is BX Real Estate Mexico Sociedad Civil.
Finally, the Participant does not reserve any action or right to bring any claim against the Company for any compensation or damages as a result of participation in the Plan and he or she therefore grants a full and broad release to the Employer, the Company and its other Affiliates with respect to any claim that may arise under or in relation to the Plan.
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Plan Document Acknowledgment. By accepting the Deferred Units, the Participant acknowledges having received a copy of the Plan, having reviewed the Plan and this Award Agreement in their entirety and fully understood and accepted all provisions of the Plan and the Award Agreement.
Spanish Translation
Reconocimiento de la Ley Laboral: Estas disposiciones complementan la Sección 16 del cuerpo principal de este Convenio del Otorgamiento y la Sección 1 del Apéndice A:
Al aceptar las Unidades Diferidas, el Participante reconoce y acepta que: (i) las Unidades Diferidas no se encuentran relacionadas con el salario ni con otras prestaciones contractuales concedidas al Participante por parte del Empleador; y (ii) cualquier modificación del Plan o la terminación del mismo no constituye un cambio o impedimento de los términos y condiciones del Empleo del Participante.
Adicionalmente, al firmar el presente documento, el Participante reconoce que ha leído y que aprueba específica y expresamente los términos y condiciones contenidos en este Convenio del Otorgamiento, en los cuales se encuentran claramente descrito y establecido lo siguiente: (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en el mismo es ofrecida por la Sociedad de forma enteramente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Sociedad, así como sus Afiliadas no son responsables por cualquier disminución en el valor de las Unidades Comunes subyacentes.
Declaración de Política. La invitación por parte de la Sociedad bajo el Plan es unilateral y discrecional y, por lo tanto, la Sociedad se reserva el derecho absoluto de modificar y discontinuar el Plan en cualquier tiempo, de acuerdo con los términos del Plan, sin ninguna responsabilidad hacia el Participante.
La Sociedad, con oficinas registradas ubicadas en 345 Park Avenue, New York, NY, 10154, EE.UU., es la única responsable por la administración del Plan y de la participación en el mismo. La adquisición de Unidades Comunes no establece de forma alguna, una relación laboral entre el Participante y la Sociedad, ya que la participación en el Plan es completamente comercial y el único patrón es BX Real Estate México Sociedad Civil.
Finalmente, el Participante declara que no se reserva ninguna acción o derecho para interponer una demanda en contra de la Sociedad por compensación, daño o perjuicio alguno como resultado de su participación en el Plan y, por lo tanto, otorga el más amplio finiquito al Empleador, la Sociedad y sus otras Afiliadas con respecto a cualquier demanda que pudiera originarse en virtud del Plan.
Reconocimiento dede Documentos del Plan. Al aceptar las Unidades Diferidas, el Participante reconoce que ha recibido una copia del Plan, que ha revisado el Plan y este Convenio del Otorgamiento en su totalidad, y que los ha entendido completamente y acepta todas las disposiciones contenidas en el Pan y en el Convenio del Otorgamiento.
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SINGAPORE
Terms and Conditions
Restrictions on Sale and Transferability. The Participant hereby agrees that any Blackstone Holdings Partnership Units acquired will not be offered for sale in Singapore prior to the six month anniversary of the Date of Grant, unless such sale or offer is made pursuant to the exemptions under Part XIII Division 1 Subdivision (4) (other than section 280) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (SFA), or pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Notifications
Securities Law Information. The grant is being made pursuant to the Qualifying Person exemption under section 273(1)(f) of the SFA, on which basis it is exempt from the prospectus and registration requirements under the SFA and is not made to the Participant with a view to the Deferred Units or the Blackstone Holdings Partnership Units being subsequently offered for sale to any other party. The Plan has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore.
Chief Executive Officer/Director Notification Obligation. If the Participant is the chief executive officer (CEO) or a director, associate director or shadow director of a Singaporean affiliate of the Company, the Participant is subject to certain notification requirements under the Singapore Companies Act. Directors and CEOs must notify the Singaporean affiliate in writing of an interest (e.g., Deferred Units, Blackstone Holdings Partnership Units) in the Company or any related affiliates within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest (e.g., when the Blackstone Holdings Partnership Units are sold), or (iii) becoming a director / CEO.
SOUTH KOREA
Notifications
Foreign Asset/Account Reporting Information. Korean residents must declare all foreign financial accounts (i.e., non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the monthly balance of such accounts exceeds KRW 500 million (or an equivalent amount in foreign currency) on any month-end during a calendar year. The Participant should consult with his or her personal tax advisor to determine the Participants personal reporting obligations.
B-10
SPAIN
Terms and Conditions
No Entitlement or Claims for Compensation. By accepting the grant, the Participant consents to participation in the Plan and acknowledges that he or she has received a copy of the Plan document.
The Participant understands that the Company has unilaterally, gratuitously and in its sole discretion decided to grant Deferred Units under the Plan to individuals who may be employees throughout the world. The decision is limited and entered into based upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any Affiliate, on an ongoing basis, other than as expressly set forth in this Award Agreement. Consequently, the Participant understands that the grant is given on the assumption and condition that the Deferred Units or underlying Blackstone Holdings Partnership Units acquired upon vesting shall not become part of any employment or other service contract (whether with the Company or any Affiliate) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, the Participant understands that this grant would not be made to the Participant but for the assumptions and conditions referred to above; thus, the Participant acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of Deferred Units shall be null and void.
Further, the vesting of the Deferred Units is expressly conditioned on the Participants continued and active rendering of service, such that if the Participants Employment terminates the Deferred Units cease vesting immediately effective on the date of the Participants termination of Employment, unless otherwise provided in this Award Agreement. This will be the case if the Participants Employment terminates for any reason including, but not limited to, resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause (i.e., subject to a despido improcedente), individual or collective dismissal on objective grounds, whether adjudged or recognized to be with or without cause, material modification of the terms of employment under Article 41 of the Workers Statute, relocation under Article 40 of the Workers Statute, and/or Article 50 of the Workers Statute, unilateral withdrawal by the Employer and under Article 10.3 of the Royal Decree 1382/1985.
Notifications
Securities Law Information. No offer of securities to the public, as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of Deferred Units under the Plan. The Plan and this Award Agreement, have not been nor will they be registered with the Comisión Nacional del Mercado de Valores, and do not constitute a public offering prospectus.
B-11
Exchange Control Information. The Participant must declare the acquisition, ownership and disposition of Blackstone Holdings Partnership Units to the Spanish Dirección General de Comercio e Inversiones (DGCI) of the Ministry of Economy and Competitiveness on a Form D-6. Generally, the declaration must be made in January for Blackstone Holdings Partnership Units owned as of December 31 of the prior year and/or Blackstone Holdings Partnership Units acquired or disposed of during the prior year; however, if the value of the Blackstone Holdings Partnership Units acquired or disposed of or the amount of the sale proceeds exceeds 1,502,530 (or if the Participant holds 10% or more of the share capital of the Company or other such amount that would entitle the Participant to join the Board), the declaration must be filed within one month of the acquisition or disposition, as applicable.
In addition, the Participant may be required to electronically declare to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including Blackstone Holdings Partnership Units acquired under the Plan), and any transactions with non-Spanish residents (including any payments of Blackstone Holdings Partnership Units made pursuant to the Plan), depending on the balances in such accounts together with the value of such instruments as of December 31 of the relevant year, or the volume of transactions with non-Spanish residents during the relevant year.
The Participant should consult with his or her personal advisor to determine the Participants obligations in this respect.
Foreign Asset/Account Reporting Information. To the extent that the Participant holds rights or assets (e.g., cash or Blackstone Holdings Partnership Units held in a bank or brokerage account) outside of Spain with a value in excess of 50,000 per type of right or asset as of December 31 each year (or at any time during the year in which the Participant sells or disposes of such right or asset), the Participant is required to report information on such rights and assets on his or her tax return for such year. After such rights or assets are initially reported, the reporting obligation will only apply for subsequent years if the value of any previously-reported rights or assets increases by more than 20,000 of if the Participant sells or otherwise disposes of previously-reported rights or assets. The Participant should consult with his or her personal tax advisor to ensure compliance with applicable reporting requirements.
UNITED ARAB EMIRATES
Terms and Conditions
Nature of Grant. This provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
The Participant acknowledges that the Deferred Units and related benefits do not constitute a component of the Participants wages for any legal purpose. Therefore, the Deferred Units and related benefits will not be included and/or considered for purposes of calculating any and all labor benefits, such as social insurance contributions and/or any other labor-related amounts which may be payable.
B-12
Notifications
Securities Law Information. The grant of Deferred Units is being offered only to eligible individuals under the Plan and is in the nature of providing equity incentives to employees in the United Arab Emirates. The Plan and the Award Agreement are intended for distribution only to such employees and must not be delivered to, or relied on by, any other person. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying the documents in connection with the Plan. Neither the Ministry of Economy nor the Dubai Department of Economic Development have approved the Plan or this Award Agreement nor taken steps to verify the information set out therein, and have no responsibility for such documents.
UNITED KINGDOM
Terms and Conditions
Withholding. The following provisions further supplement Section 13 of this Award Agreement:
Without limitation to any provision of the Award Agreement, the Participant agrees that the Participant is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or the Employer or by Her Majestys Revenue & Customs (HRMC) (or any other tax authority or any other relevant authority). The Participant also agrees to indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay on the Participants behalf to HMRC (or any other tax authority or any other relevant authority).
Notwithstanding the foregoing, in the event that the Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities Exchange Act of 1934, as amended), the Participant understands that he or she may not be able to indemnify the Company for the amount of any income tax not collected from or paid by the Participant, in case the indemnification could be considered to be a loan. In this case, the income tax not collected or paid may constitute a benefit to the Participant on which additional income tax and National Insurance contributions may be payable. The Participant understands that he or she will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company or the Employer, as applicable, for the value of any National Insurance contributions due on this additional benefit, which may also be recovered from the Participant at any time by any of the means referred to in this Section 13.
B-13
Exhibit 10.102
THE BLACKSTONE GROUP INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
BX EQUITY AWARD
DEFERRED HOLDINGS UNIT AGREEMENT
Participant: | Date of Grant: | |
Number of Deferred Units: |
1. Grant of Deferred Units. The Company hereby grants the number of deferred units (the Deferred Units) listed above to the Participant (the Award), effective as of the Date of Grant on the terms and conditions hereinafter set forth in this agreement, including any appendix, exhibit or addendum hereto (the Award Agreement). This grant is made pursuant to the terms of The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan (as amended, modified or supplemented from time to time, the Plan), which is incorporated herein by reference and made a part of this Award Agreement. Each Deferred Unit represents the unfunded, unsecured right of the Participant to receive a Blackstone Holdings Partnership Unit on the delivery date(s) specified in Section 4 hereof.
2. Definitions. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.
(a) Cause shall mean the occurrence or existence of any of the following as determined fairly, reasonably, on an informed basis and in good faith by the Administrator: (i) any breach by the Participant of any provision of the Non-Competition, Non-Solicitation and Confidentiality Agreements to which the Participant is a party, (ii) any material breach of any rules or regulations of the Company or its Affiliates applicable to the Participant, (iii) Participants deliberate failure to perform his or her duties to the Company or its Affiliates, (iv) Participants committing to or engaging in any conduct or behavior that is or may be harmful to the Company or its Affiliates in a material way; (v) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or its Affiliates; or (vi) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that the Participant individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) the Participants ability to function as an employee of the Company or its Affiliates, taking into account the employment required of the Participant and the nature of the Companys or its Affiliates business or (B) the business of the Company or its Affiliates.
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(b) Employment Agreement shall mean the Senior Managing Director Agreement (including all schedules and exhibits thereto), entered into between the Blackstone Holdings I L.P. (or any of its or the Companys Affiliates) and the Participant.
(c) Holdback Delivery Date shall mean the second anniversary with respect to each Vesting Date (each such date, a Scheduled Release Date); provided, however, that if the Participant terminates Employment prior to any such Scheduled Release Date, then the Holdback Delivery Date applicable to all remaining Retention Units shall be the second anniversary of the date of the Participants termination of Employment.
(d) Involuntary Termination shall mean the Company and its Affiliates have terminated the Employment of the Participant without Cause (and in the absence of the Participants Disability).
(e) Non-Competition, Non Solicitation and Confidentiality Agreement shall mean any agreement, and any attachments or schedules thereto, entered into by and between the Participant and the Company or its Affiliates, pursuant to which the Participant has agreed, among other things, to certain restrictions relating to non-competition, non-solicitation and/or confidentiality, in order to protect the business of the Company and its Affiliates.
(f) Qualifying Event shall mean, during the Participants Employment with the Company and its Affiliates, the Participants death, Disability or Retirement.
(g) Retirement shall mean the retirement of the Participant from his or her Employment with the Company and its Affiliates after (i) the Participant has reached age 65 and has at least five full years of service with the Company and its Affiliates, or (ii) (x) the Participants age plus years of service with the Company and its Affiliates totals at least 65, (y) the Participant has reached age 55, and (z) the Participant has had a minimum of five years of service.
(h) Retention Percentage shall mean 25% of the vested units until the corresponding Holdback Delivery Date for each Vesting Date.
(i) Retention Units shall mean, on any given date, the Deferred Units that have become Vested Deferred Units and which are retained by the Company (along with the underlying Blackstone Holdings Partnership Units) in accordance with Section 4 hereof.
(j) Vested Deferred Units shall mean those Deferred Units which have become vested pursuant to Section 3 or otherwise pursuant to the Plan.
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(k) Vesting Dates shall mean each of the First Vesting Date, the Second Vesting Date and the Third Vesting Date.
(l) Vesting Reference Date shall mean .
3. Vesting.
(a) Vesting General. Subject to the Participants continued Employment with the Company and its Affiliates, the Award shall vest on the applicable Vesting Dates as follows:
(i) percent of the Deferred Units granted hereunder shall vest on the third anniversary of the Vesting Reference Date (the First Vesting Date); an additional % of the Deferred Units granted hereunder shall vest on the fourth anniversary of the Vesting Reference Date (the Second Vesting Date); and the remaining % of the Deferred Units granted hereunder shall vest on the fifth anniversary of the Vesting Reference Date (the Third Vesting Date).
(b) Vesting Qualifying Events.
(i) Death or Disability. Upon the occurrence of a Qualifying Event on account of the death or Disability of the Participant, 100% of the Deferred Units granted hereunder shall vest (to the extent not previously vested) upon the date of such event.
(ii) Involuntary Termination. Upon the occurrence of a Qualifying Event on account of the Involuntary Termination of the Participant, 100% of the Deferred Units grants hereunder shall vest (to the extent not previously vested) upon the date of such event.
(iii) Retirement. Upon the occurrence of a Qualifying Event on account of the Retirement of the Participant, (I) 50% of the then unvested Deferred Units shall remain eligible to vest upon each of the following scheduled Vesting Dates, and (II) all other unvested Deferred Units shall be cancelled immediately and the Participant shall automatically forfeit all rights with respect to such unvested Deferred Units upon the date of such event; provided that if, following the Participants Retirement, the Participant breaches any applicable provision of the Non-Competition, Non-Solicitation and Confidentiality Agreement to which the Participant is a party or otherwise engages in any Competitive Activity, the Participants Deferred Units which remain undelivered as of the date of such violation or engagement in Competitive Activity, as determined by the Administrator in its sole discretion, will be forfeited without payment. As a pre-condition to a Participants right to continued vesting and delivery of the Deferred Units following Retirement, the Administrator may require the Participant to certify in writing prior to each scheduled Vesting Date that the Participant has not breached any applicable provisions of the Participants Non-Competition, Non-Solicitation and Confidentiality Agreement or otherwise engaged in any Competitive Activity.
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(c) Vesting Terminations. Except as otherwise set forth in Section 3(b), in the event the Participants Employment with the Company and its Affiliates is terminated for any reason, the portion of the Award that has not yet vested pursuant to Section 3(a) or 3(b) hereof (or otherwise pursuant to the Plan) shall be cancelled immediately and the Participant shall automatically forfeit all rights with respect to such portion of the Award as of the date of such termination.
4. Delivery.
(a) Delivery General. The Company shall, on each applicable Vesting Date set forth below, deliver to the Participant the Blackstone Holdings Partnership Units underlying the Deferred Units which vest and become Vested Deferred Units on such date; provided that on each such Vesting Date, the Company shall retain, as Retention Units (and withhold the corresponding underlying Blackstone Holdings Partnership Units with respect thereto) a number of Vested Deferred Units so that the aggregate number of Retention Units at such time (expressed as a percentage of the aggregate number of Deferred Units awarded to the Participant which have vested as of such date) is equal to the applicable Retention Percentage. The Blackstone Holdings Partnership Units underlying Retention Units will be delivered to the Participant as and when, and to the extent that, the number of Retention Units at any time exceeds the applicable Retention Percentage, as illustrated in the table below, with the Blackstone Holdings Partnership Units underlying any remaining Retention Units delivered to the Participant upon the corresponding Holdback Delivery Date.
Annual
Vesting |
Cumulative
Vesting |
Retention
Percentage |
Annual
Delivery Percentage |
|||||||||||||
First Vesting Date |
||||||||||||||||
Second Vesting Date |
||||||||||||||||
Third Vesting Date |
(b) Delivery Qualifying Events.
(i) Death or Disability. Upon the occurrence of a Qualifying Event on account of the Participants death or Disability, the Company shall, within a reasonable time following the date of such event, deliver Blackstone Holdings Partnership Units to the Participant in respect of 100% of the Deferred Units which vest and become Vested Deferred Units on such Date and any then outstanding Retention Units (to the extent not previously delivered).
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(ii) Involuntary Termination. Upon the occurrence of a Qualifying Event on the account of the Participants Involuntary Termination, the Company shall, within a reasonable time following the date of such event, deliver Blackstone Holdings Partnership Units to the participant in respect of 100% of the Deferred Units which vest and become Vested Deferred Units on that date; provided that the Company will retain such Retention Units as are necessary to meet the Retention Percentage until such requirement lapses.
(iii) Retirement. Following the occurrence of a Qualifying Event on account of the Participants Retirement, the Company shall, on each subsequent Vesting Date, deliver Blackstone Holdings Partnership Units to the Participant in respect of those Deferred Units which vest and become Vested Deferred Units as of each following Vesting Date by application of Section 3(b)(ii); provided that the Company will retain such Retention Units as are necessary to meet the Retention Percentage until such requirement lapses upon the corresponding Holdback Delivery Date(s).
(c) Delivery Terminations. Except as otherwise set forth in Section 4(b) or 4(d), in the event the Participants Employment with the Company and its Affiliates is terminated for any reason, the Company shall (i) within a reasonable time of such termination, deliver Blackstone Holdings Partnership Units to the Participant in respect of the Vested Deferred Units as of such date that are not Retention Units (if any), and (ii) deliver Blackstone Holdings Partnership Units to the Participant in respect of the Retention Units in accordance with the delivery schedule set forth in Section 4(a), until the corresponding Holdback Delivery Date(s), at which point the remaining Retention Units shall be delivered to the Participant.
(d) Forfeiture Cause Termination or Breach of Restrictive Covenants. Notwithstanding anything to the contrary herein, upon the termination of the Participants Employment by the Company or any of its Affiliates for Cause or upon the Participants breach of any of the restrictive covenants contained within an applicable Non-Competition, Non-Solicitation and Confidentiality Agreement, all outstanding Deferred Units (whether or not vested) and Retention Units shall immediately terminate and be forfeited without consideration and no further Blackstone Holdings Partnership Units with respect of the Award shall be delivered to the Participant or to the Participants legal representative, beneficiaries or heirs. Without limiting the foregoing, any Blackstone Holdings Partnership Units that have previously been delivered to the Participant or the Participants legal representative, beneficiaries or heirs pursuant to the Award and which are still held by the Participant or the Participants legal representative, or beneficiaries or heirs as of the date of such termination for Cause or such breach, shall also immediately terminate and be forfeited without consideration.
5. Change in Control. Notwithstanding anything to the contrary herein, in the event of a Change in Control, (i) 100% of the Deferred Units granted hereunder which then remain outstanding shall vest (to the extent not previously vested) upon the date of such Change in Control, and (ii) the Company shall deliver Blackstone Holdings Partnership Units
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to the Participant at the same times as would otherwise be delivered pursuant to Section 4(a); provided, however, if such Change in Control (or any subsequent Change in Control) would constitute a change in the ownership or effective control or a change in the ownership of a substantial portion of the assets of the Company (in each case within the meaning of Section 409A of the Code), the Company shall instead deliver Blackstone Holdings Partnership Units to the Participant in respect of 100% of the then outstanding Deferred Units and Retention Units (to the extent not previously delivered) on or within 10 days following such Change in Control.
6. Distributions. If on any date while Deferred Units are outstanding hereunder any cash distributions shall be paid on the Blackstone Holdings Partnership Units (whether vested or unvested), the Participant shall be entitled to receive, as of such distribution date, a cash payment equal to the product of (a) the number of Deferred Units, if any, held by the Participant as of the related distribution date, multiplied by (b) the per Blackstone Holdings Partnership Unit amount of such cash distribution.
7. Adjustments Upon Certain Events. The Administrator shall, in its sole discretion, make certain substitutions or adjustments to any Retention Units or Deferred Units subject to this Award Agreement pursuant to Section 9 of the Plan.
8. No Right to Continued Employment. The granting of the Deferred Units evidenced by this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Employment of the Participant and shall not lessen or affect the Companys or its Affiliates right to terminate the Employment of such Participant.
9. No Rights of a Holder of Blackstone Holdings Partnership Units. Except as otherwise provided herein, the Participant shall not have any rights as a holder of Blackstone Holdings Partnership Units until such Blackstone Holdings Partnership Units have been issued or transferred to the Participant.
10. Restrictions. Any Blackstone Holdings Partnership Units issued or transferred to the Participant pursuant to Section 4 of this Award Agreement shall be subject to such stop transfer orders and other restrictions as the Administrator may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Blackstone Holdings Partnership Units are listed and any applicable U.S. or non-U.S. federal, state or local laws, and the Administrator may cause a notation or notations to be entered into the books and records of the Company to make appropriate reference to such restrictions.
11. Transferability. Unless otherwise determined or approved by the Administrator, no Deferred Units or Retention Units may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance not permitted by this Section 11 shall be void and unenforceable against the Company or any Affiliate.
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12. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing (including electronically) and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by electronic means, by courier service, by fax, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12):
(a) If to the Company, to:
The Blackstone Group Inc.
345 Park Avenue
New York, New York, 10154
Attention: Chief Legal Officer
Fax:
(b) If to the Participant, to the address appearing in the personnel records of the Company or any Affiliate.
13. Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any issuance or transfer due under this Award Agreement or under the Plan or from any compensation or other amount owing to the Participant, applicable withholding taxes with respect to any issuance or transfer under this Award Agreement or under the Plan and to take such action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes, including, without limitation, by reducing the number of Blackstone Holdings Partnership Units that would otherwise be transferred or issued pursuant to this Award Agreement. Without limiting the foregoing, the Administrator may, from time to time, permit the Participant to make arrangements prior to any vesting date or delivery date described herein to pay the applicable withholding taxes by remitting a check prior to the applicable vesting or delivery date.
14. Choice of Law. The interpretation, performance and enforcement of this Award Agreement shall be governed by the law of the State of New York.
15. Subject to Plan. By entering into this Award Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. All Deferred Units, Retention Units and Blackstone Holdings Partnership Units issued or transferred with respect thereof are subject to the Plan. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
16. Nature of Grant. By accepting the Deferred Units, the Participant acknowledges, understands and agrees that:
(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;
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(b) the grant of Deferred Units is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Deferred Units or benefits in lieu of Deferred Units, even if Deferred Units have been granted in the past;
(c) all decisions with respect to future Deferred Units or other grants, if any, will be at the sole discretion of the Company;
(d) the Participant is voluntarily participating in the Plan;
(e) the Deferred Units and the underlying Blackstone Holdings Partnership Units, and the income from and value of same, are not intended to replace any pension rights or compensation;
(f) unless otherwise agreed with the Company, the Deferred Units and the underlying Blackstone Holdings Partnership Units, and the income from and value of same, are not granted as consideration for, or in connection with, the service the Participant may provide as a director of any affiliate of the Company;
(g) the Deferred Units and the underlying Blackstone Holdings Partnership Units, and the income from and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, indemnification, pension or retirement or welfare benefits or similar payments, benefits or rights of any kind;
(h) the future value of the underlying Blackstone Holdings Partnership Units is unknown, indeterminable and cannot be predicted with certainty;
(i) no claim or entitlement to compensation or damages shall arise from the forfeiture of the Deferred Units resulting from the Participants termination of Employment (for any reason whatsoever, whether or not later found to be invalid or in breach of employment or other laws in the jurisdiction where the Participant is employed or otherwise rendering services, or the terms of his or her employment or service agreement, if any); and
(j) for purposes of the Deferred Units, the Participants Employment will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of his or her employment or service agreement, if any) as of the date that is the earlier of (i) the date he or she is no longer actively providing services to the Company or an Affiliate or (ii) the date he or she receives notice of termination of Employment from the Company or Affiliate, and unless otherwise expressly provided in this Award Agreement or determined by the Company, the Participants right to vest in the Deferred Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., the Participants period of service would not include any contractual notice period or any period of garden leave or similar period mandated under employment laws in the jurisdiction where the Participant is employed or otherwise rendering services, or the terms of his or her employment or service agreement, if any). The Administrator will have exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Deferred Units.
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17. Non-U.S. and Country Specific Provisions. If the Participant resides in a country outside the United States or its territories, or is otherwise subject to the laws of a country other than the United States, the Deferred Units and any underlying Blackstone Holdings Partnership Units acquired under the Plan shall be subject to the additional terms and conditions set forth in Appendix A and to the terms and conditions set forth in Appendix B for the Participants country, if any. Moreover, if the Participant relocates outside the United States or its territories, the terms and conditions set forth in Appendices A and B will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.
18. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participants participation in the Plan, or his or her acquisition or sale of the underlying Blackstone Holdings Partnership Units. The Participant should consult with his or her own tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
19. Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
20. Waiver. The Participant acknowledges that a waiver by the Company of breach of any provision of this Award Agreement shall not operate or be construed as a waiver of any other provision of the Award Agreement, or of any subsequent breach of this Award Agreement.
21. Entire Agreement. This Award Agreement contains the entire understanding between the parties with respect to the Deferred Units granted hereunder (including, without limitation, the vesting and delivery schedules described herein), and hereby replaces and supersedes any prior communication and arrangements between the Participant and the Company or any of its Affiliates with respect to the matters set forth herein and any other pre-existing economic or other arrangements between the Participant and the Company or any of its Affiliates.
22. Modifications. Notwithstanding any provision of this Award Agreement to the contrary, the Company reserves the right to modify the terms and conditions of this Award Agreement, including, without limitation, the timing or circumstances of the issuance or transfer of Blackstone Holdings Partnership Units to the Participant hereunder, to the extent such modification is determined by the Company to be necessary or advisable for legal or administrative reasons or to preserve the intended deferral of income recognition with respect to the Deferred Units and Retention Units until the issuance or transfer of Blackstone Holdings Partnership Units hereunder.
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23. Electronic Delivery and Acceptance. The Company, in its sole discretion, may decide to deliver any documents related to current or future participation in the Plan by electronic means. Electronic delivery of a document to the Participant may be via a Company e-mail system, an online or electronic system established and maintained by a third party administrator of the Plan, or by reference to a location on a Company intranet site to which the Participant has access. The Participant hereby agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company desires or may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other agreements, forms and communications), in connection with this and any other prior or future incentive award or program offered by the Company and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
24. Signature in Counterparts. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
[Signatures on next page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement.
THE BLACKSTONE GROUP INC. |
|
Name: |
THE PARTICIPANT1 |
|
Name: |
1 |
To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this award electronically, such acceptance shall constitute Participants signature hereof. |
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APPENDIX A
to
THE BLACKSTONE GROUP INC.
DEFERRED UNIT AGREEMENT
ADDITIONAL TERMS AND CONDITIONS
FOR PARTICIPANTS OUTSIDE THE UNITED STATES
The following terms and conditions (where applicable) apply to Participants who reside outside the United States or its territories or who are otherwise subject to the laws of a country other than the United States.
1. Nature of Grant. The follow provision supplements Section 16 of the main body of this Award Agreement:
Neither the Company nor any Affiliate shall be liable for any foreign exchange rate fluctuation between the Participants local currency and the U.S. Dollar that may affect the value of the Deferred Units or any amounts due to the Participant pursuant to the settlement of the Deferred Units (in Blackstone Holdings Partnership Units or cash) or subsequent sale of underlying Blackstone Holdings Partnership Units acquired upon settlement.
2. Withholding. The following provisions supplement Section 13 of the main body of this Award Agreement:
The Participant acknowledges and agrees that, regardless of any action taken by the Company or the Affiliate employing the Participant (the Employer), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Deferred Units and the Participants participation in the Plan (Tax-Related Items) is and remains the Participants sole responsibility and may exceed the amount, if any, withheld by the Company or the Employer. The Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Deferred Units, including, but not limited to, the grant, vesting or settlement of the Deferred Units, the subsequent sale of Blackstone Holdings Partnership Units acquired pursuant to such settlement and the receipt of any distributions; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Deferred Units to reduce or eliminate the Participants liability for Tax-Related Items or achieve any particular tax result. If the Participant is subject to Tax-Related Items in more than one jurisdiction, the Participant acknowledges and agrees that the Company or Affiliate, as applicable, may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
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In addition to the withholding methods specified above in this Section 13, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all Tax-Related Items by (i) withholding from the proceeds of the sale of Blackstone Holdings Partnership Units acquired at vesting of the Deferred Units through a voluntary sale or through a mandatory sale arranged by the Company (on the Participants behalf pursuant to this authorization without further consent) or (ii) any other method of withholding determined by the Company and permitted by applicable law.
Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Participants jurisdiction(s), in which case the Participant may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Blackstone Holdings Partnership Units. If the obligation for Tax-Related Items is satisfied by withholding Blackstone Holdings Partnership Units that would otherwise be transferred or issued pursuant to this Award Agreement, for tax purposes, the Participant is deemed to have been issued the full number of Blackstone Holdings Partnership Units subject to the vested Deferred Units, notwithstanding that a number of the Blackstone Holdings Partnership Units are held back solely for the purpose of paying the Tax-Related Items.
The Company may refuse to issue the Blackstone Holdings Partnership Units or deliver the proceeds of the sale of Blackstone Holdings Partnership Units if the Participant fails to comply with his or her obligations in connection with the Tax-Related Items.
3. Data Privacy. For the purposes of complying with the General Data Protection Regulation (EU) 2016/679, relevant Participants will be provided with separate information in respect of the collection and processing of their personal data. For the purposes of the remainder of this clause 3 (of Appendix A) only, Participant means a Participant who resides outside of the European Union.
The Participant hereby explicitly, voluntarily and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participants personal data as described in this Award Agreement and any other Plan materials by and among, as applicable, the Employer, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing the Participants participation in the Plan.
The Participant understands that the Company and the Employer may hold certain personal information about the Participant, including, but not limited to, the Participants name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Blackstone Holdings Partnership Units or directorships held in the Company, details of any entitlement to Blackstone Holdings Partnership Units awarded, canceled, exercised, vested, unvested or outstanding in the Participants favor, for the purpose of implementing, administering and managing the Plan (Data).
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The Participant understands that Data will be transferred to Merrill Lynch, Pierce, Fenner & Smith Incorporated or such other stock plan providers as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. The Participant understands that those receiving the Data may be located in the United States or elsewhere, and that the applicable country (e.g., the United States) may have different data privacy laws and protections than the Participants country. The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Participant authorizes the Company, and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Participants participation in the Plan. The Participant understands that Data will be held as long as is necessary to implement, administer and manage the Participants participation in the Plan, as determined by the Company in its sole discretion. The Participant understands that he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, the Participant understands that he or she is providing the consents herein on a purely voluntary basis. If the Participant does not consent, or later seeks to revoke his or her consent, the Participants employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant Deferred Units or other equity awards under the Plan, or administer or maintain such awards. Therefore, the Participant understands that refusing or withdrawing his or her consent may affect the Participants ability to participate in the Plan. For more information on the consequences of the Participants refusal to consent or withdrawal of consent, the Participant understands that he or she may contact his or her local human resources representative.
4. Language. The Participant acknowledges that he or she is sufficiently proficient in English to understand the terms and conditions of the Award Agreement. Furthermore, if the Participant receives this Award Agreement or any other document related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
5. Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that the Participant may be subject to insider trading and/or market abuse laws based on the exchange on which the Blackstone Holdings Partnership Units are listed and in applicable jurisdictions including the United States and the Participants country or the brokers country, if different, which may affect the Participants ability to accept, acquire, sell or otherwise dispose of Blackstone Holdings Partnership Units or rights to Blackstone Holdings Partnership Units (e.g., Deferred Units) or rights linked to the value of Blackstone Holdings Partnership Units, during such times as the Participant is considered to have inside information regarding the Company (as defined by the laws or regulations in the applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant may be prohibited
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from (i) disclosing the inside information to any third party including colleagues of the Participant (other than on a need to know basis) and (ii) tipping third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. The Participant is responsible for ensuring compliance with any applicable restrictions and should consult with his or her personal legal advisor on this matter.
6. Foreign Asset/Account, Exchange Control and Tax Reporting. The Participant acknowledges that, depending on his or her country, the Participant may be subject to foreign asset and/or account reporting requirements and exchange control regulations which may affect his or her ability to acquire or hold Blackstone Holdings Partnership Units under the Plan or cash received from participating in the Plan (including from any distributions received or sale proceeds arising from the sale of Blackstone Holdings Partnership Units in a brokerage or bank account outside of the Participants country. The Participant may also be required to repatriate sale proceeds or funds received as a result of his or her participation in the Plan to his or her country through a designated bank and/or broker within a certain time after receipt. In addition, the Participant may be subject to tax payments and/or other reporting obligations in connection with any income realized under the Plan, and or from the sale of the underlying Blackstone Holdings Partnership Units. The Participant acknowledges that he or she is responsible for ensuring compliance with any such requirements and is advised to consult with his or her personal legal advisors, as applicable, to ensure compliance.
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APPENDIX B
TO
THE BLACKSTONE GROUP INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
SPECIAL EQUITY AWARD
DEFERRED UNIT AGREEMENT
COUNTRY-SPECIFIC TERMS AND CONDITIONS
Terms and Conditions
This Appendix B includes additional terms and conditions applicable to Participants in the countries below. These terms and conditions are in addition to, or, if so indicated, in place of, the terms and conditions set forth in the Award Agreement, including Appendix A. If the Participant is a citizen (or is considered as such for local purposes) of a country other than the country in which he or she is currently residing and/or working, or if he or she relocates to another country after the Deferred Units are granted, the Company will, in its discretion, determine the extent to which the terms and conditions contained herein will be applicable to the Participant.
Notifications
This Appendix B also includes information regarding securities law, exchange controls and certain other issues of which the Participant should be aware with respect to participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of January 2019. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant not rely on the information contained herein as the only source of information relating to the consequences of his or her participation in the Plan because the information may be out of date by the time he or she vests in the Deferred Units or sells Blackstone Holdings Partnership Units acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Participants particular situation, and the Company is not in a position to assure the Participant of a particular result. Accordingly, the Participant should seek appropriate professional advice as to how the relevant laws in his or her country may apply to the Participants particular situation.
Finally, if the Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which he or she is currently residing and/or working, or if the Participant relocates to another country after the Deferred Units are granted, the notifications contained herein may not be applicable to him or her in the same manner.
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AUSTRALIA
Notifications
Tax Information. Subdivision 83A-C of the Income Tax Assessment Act 1997 applies to the Deferred Units granted in accordance with the terms and conditions of the Plan and this Award Agreement (subject to the requirements of the Income Tax Assessment Act 1997).
BRAZIL
Terms and Conditions
Compliance with Law. By accepting the Deferred Units, the Participant acknowledges that he or she will comply with applicable Brazilian laws and pay any applicable Tax-Related Items associated with the vesting and settlement of the Deferred Units and the sale of Blackstone Holdings Partnership Units under the Plan.
Nature of Grant. The follow provision supplements
Section 16 of the main body of this Award Agreement and Section 1 of
Appendix A:
By accepting the Deferred Units, the Participant acknowledges that (i) the grant of Deferred Units is not part of normal or expected compensation for any reason whatsoever and will have no impact on Participants Employment or service relationship, (ii) the underlying Blackstone Holdings Partnership Units will be issued to the Participant only if the vesting conditions are met, and (iii) the value of the underlying Blackstone Holdings Partnership Units is not fixed and may increase or decrease without compensation to the Participant.
Notifications
Foreign Asset/Account Reporting Information. If the Participant is resident or domiciled in Brazil, the Participant will be required to submit an annual declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal to or greater than US$100,000. Assets and rights that must be reported include Blackstone Holdings Partnership Units acquired under the Plan. Foreign individuals holding Brazilian visas are considered Brazilian residents for purposes of this reporting requirement and must declare at least the assets held abroad that were acquired subsequent to the date of admittance as a resident of Brazil.
CANADA
Terms and Conditions
Delivery. Notwithstanding any discretion contained in Section 8 of the Plan, the grant of Deferred Units does not provide any right for the Participant to receive a cash payment and as provided in Section 4 of the main body of this Award Agreement, Vested Deferred Units will be satisfied through the delivery of Blackstone Holdings Partnership Units.
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Termination of Employment. The following provision replaces Section 16(j) of the main body of this Award Agreement:
(j) for purposes of the Deferred Units, the Participants Employment will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of his or her employment or service agreement, if any) as of the date that is the earlier of (i) the date of the Participants termination of Employment or (ii) the date the Participant is no longer actively providing service (regardless of any notice period or period of pay in lieu of such notice required under applicable Canadian employment laws (including, but not limited to statutory law, regulatory law and/or common law)). The Administrator will have exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Deferred Units (including whether the Participant may still be considered to be providing services while on a leave of absence).
Notifications
Securities Law Information. The Participant is permitted to sell Blackstone Holdings Partnership Units under the Plan through the designated broker appointed under the Plan, if any, provided the sale of the Blackstone Holdings Partnership Units place outside of Canada through the facilities of a stock exchange on which the Blackstone Holdings Partnership Units are listed (i.e., the New York Stock Exchange).
Foreign Asset/Account Reporting Information. Canadian resident Participants are required to report any specified foreign property on form T1135 (Foreign Income Verification Statement) if the total value of the specified foreign property exceeds C$ 100,000 at any time in the year. Specified foreign property includes Blackstone Holdings Partnership Units acquired under the Plan, and may include the Deferred Units. The Deferred Units must be reported (generally at a nil cost) if the C$ 100,000 cost threshold is exceeded because of other foreign property the Participant holds. If Blackstone Holdings Partnership Units are acquired, their cost generally is the adjusted cost base (ACB) of the Blackstone Holdings Partnership Units. The ACB ordinarily would equal the fair market value of the Blackstone Holdings Partnership Units at the time of acquisition, but if the Participant owns other Blackstone Holdings Partnership Units, this ACB may have to be averaged with the ACB of the other Blackstone Holdings Partnership Units. The form must be filed by April 30 of the following year. The Participant should consult with his or her personal legal advisor to ensure compliance with applicable reporting obligations.
CHINA
The following Terms and Conditions apply to Participants that are subject to the exchange control restrictions and regulations in the Peoples Republic of China (China), including the requirements imposed by the State Administration of Foreign Exchange (SAFE), as determined by the Company in its sole discretion.
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Terms and Conditions
Delivery. Notwithstanding Section 4 of this Award Agreement, delivery of Blackstone Holdings Partnership Units is conditioned upon the Company securing and maintaining all necessary approvals from SAFE and any other applicable government entities in China to permit the operation of the Plan in China, as determined by the Company it its sole discretion. If or to the extent the Company is unable to complete the registration or maintain the registration, no Blackstone Holdings Partnership Units subject to the Deferred Units for which a registration cannot be completed or maintained shall be issued. In this case, the Company retains the discretion to settle any Deferred Units in cash paid through local payroll in an amount equal to the fair market value of the Blackstone Holdings Partnership Units on the settlement date, subject to the Deferred Units less any Tax-Related Items.
Exchange Control Restrictions. Exchange control restrictions apply to the remittance of funds into and out of China. In the event that Blackstone Holdings Partnership Units are delivered upon settlement of the Deferred Units, the Participant understands and agrees that, pursuant to local exchange control requirements, he or she will be required to immediately repatriate the cash proceeds from the sale of Blackstone Holdings Partnership Units and any cash distributions paid on such Blackstone Holdings Partnership Units to China. The Participant further understands that, under local law, such repatriation of cash proceeds may need to be effectuated through a special exchange control account established by the Company, the Employer or any other Affiliate, and the Participant hereby consents and agrees that any proceeds from the sale of Blackstone Holdings Partnership Units or any cash distributions paid on such Blackstone Holdings Partnership Units may be transferred to such special account prior to being delivered to the Participant.
The proceeds may be paid to the Participant in U.S. dollars or local currency at the Companys discretion. In the event the proceeds are paid to the Participant in U.S. dollars, he or she understands that he or she will be required to set up a U.S. dollar bank account in China and provide the bank account details to the Employer and/or the Company so that the proceeds may be deposited into this account. If the proceeds are paid to the Participant in local currency, the Company is under no obligation to secure any particular exchange conversion rate and/or conversion date and the Company may face delays in converting the proceeds to local currency due to exchange control restrictions. The Participant agrees to bear any currency fluctuation risk between the time the Blackstone Holdings Partnership Units are sold or distributions are received and the time the proceeds are distributed through any such special exchange account. The Participant further agrees to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.
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DENMARK
Terms and Conditions
Exclusion from Termination Indemnities and Other Benefits. This provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
In accepting the Deferred Units, the Participant acknowledges that he or she understands and agrees that this grant relates to future services to be performed and is not a bonus or compensation for past services.
Notifications
Foreign Asset/Account Reporting Information. The prior rules that required the Participant to submit certain forms (Declaration V and Declaration K) to the Danish Tax Authorities reporting Blackstone Holdings Partnership Units held in foreign bank or brokerage accounts and deposit accounts with a foreign bank were eliminated as of January 1, 2019. Please note, however, that the Participant is required to report the foreign bank/brokerage accounts and their deposits and Blackstone Holdings Partnership Units held in foreign bank or brokerage accounts on his or her personal tax return under the section on foreign affairs and income.
FRANCE
Terms and Conditions
Language Consent. By Accepting the Award Agreement providing for the terms and conditions of the Participants grant, the Participant confirms having read and understood the documents relating to this grant (the Plan and the Award Agreement) which were provided in the English language. The Participant accepts the terms of these documents accordingly.
Consentement relatif à la réception d informations en langue anglaise. En acceptant le Contrat d Attribution décrivant les termes et conditions de l attribution, le Participant confirme ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan et le Contrat d Attribution) qui ont été communiqués en langue anglaise. Le Participant accepte les termes de ces documents en connaissance de cause.
Notifications
Foreign Asset/Account Reporting Information. The Participant may hold Blackstone Holdings Partnership Units acquired under the Plan provided the Participant declares all foreign bank and brokerage accounts (including accounts opened or closed during the tax year) in the Participants tax return. Failure to comply could trigger significant penalties.
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GERMANY
Notifications
Exchange Control Information. Cross-border payments in excess of 12,500 must be reported monthly to the German Federal Bank (Bundesbank). In the event that the Participant makes or receives a payment in excess of this amount, he or she must report the payment to Bundesbank electronically using the General Statistics Reporting Portal (Allgemeines Meldeportal Statistik) available via Bundesbanks website (www.bundesbank.de).
Foreign Asset/Account Reporting Information. German residents holding Blackstone Holdings Partnership Units must notify their local tax office of the acquisition of Blackstone Holdings Partnership Units when they file their tax returns for the relevant year if the value of the Blackstone Holdings Partnership Units exceeds 150,000 or in the unlikely event that the resident holds Blackstone Holdings Partnership Units exceeding 10% of the Companys capital.
HONG KONG
Terms and Conditions
Restrictions on Sale of Blackstone Holdings Partnership Units. Any Blackstone Holdings Partnership Units received at vesting are accepted as a personal investment. In the event the Deferred Units vest and Blackstone Holdings Partnership Units are issued to the Participant within six months of the Date of Grant, the Participant agrees that he or she will not sell any Blackstone Holdings Partnership Units acquired prior to the six month anniversary of the Date of Grant.
Notifications
Securities Law Information. WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. The Participant is advised to exercise caution in relation to the offer. If the Participant is in any doubt about any of the contents of this document, he or she should obtain independent professional advice. Neither the grant of the Deferred Units nor the issuance of underlying Blackstone Holdings Partnership Units upon vesting of the RSUs constitutes a public offering of securities under Hong Kong law and is available only to employees of the Company and any Affiliate. This Award Agreement, the Plan and other incidental communication materials distributed in connection with the Deferred Units (i) have not been prepared in accordance with and are not intended to constitute a prospectus for a public offering of securities under the applicable securities legislation in Hong Kong and (ii) are intended only for the personal use of each eligible employee of the Company or any Affiliate and may not be distributed to any other person.
INDIA
Notifications
Exchange Control Information. Indian residents must repatriate any proceeds from the sale of Blackstone Holdings Partnership Units acquired under the Plan or the receipt of any distributions paid on such Blackstone Holdings Partnership Units to India and convert the proceeds into local currency within a certain period after receipt (90 days for sale proceeds and 180 days for distributions, or such other period of time as may be required under
B-6
applicable regulations). The Participant will receive a foreign inward remittance certificate (FIRC) from the bank where he or she deposits the foreign currency. The Participant should maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation. The Participant acknowledges that it is the Participants sole responsibility to comply with the applicable exchange control laws in India.
Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including Blackstone Holdings Partnership Units held outside of India) in their annual tax returns. The Participant is responsible for complying with this reporting obligation and should consult with his or her personal tax advisor in this regard.
IRELAND
Terms and Conditions
Nature of Grant. The following provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
By accepting the Deferred Units, the Participant acknowledges that any Deferred Units granted to him or her by the Company are separate from any compensation or employment benefits offered to the Participant by the Employer, and that the Deferred Units shall not be considered employment-related compensation for any purposes, including any severance or termination payment made to the Participant by the Employer as a result of his or her termination of Employment.
ITALY
Terms and Conditions
Grant Terms Acknowledgment. By accepting the Deferred Units, the Participant acknowledges having received and reviewed the Plan and this Award Agreement, in their entirety and fully understands and accepts all provisions of the Plan and this Award Agreement. The Participant further acknowledges that he or she has specifically read and expressly approves the following provisions of this Award Agreement: Sections 3, 4, 13, 14, 22 and section 3 of Appendix A.
Notifications
Foreign Asset/Account Reporting Information. Italian residents who, at any time during the fiscal year, hold foreign financial assets (including cash and Blackstone Holdings Partnership Units) which may generate income taxable in Italy are required to report these assets on their annual tax returns (UNICO Form, RW Schedule) for the year during which the assets are held, or on a special form if no tax return is due. These reporting obligations will also apply to Italian residents who are the beneficial owners of foreign financial assets under Italian money laundering provisions. The Participant should consult his or her personal tax advisor to ensure compliance with applicable reporting obligations.
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JAPAN
Notifications
Foreign Asset/Account Reporting Information. The Participant is required to report the details of any assets held outside of Japan (including Blackstone Holdings Partnership Units acquired under the Plan as of December 31), to the extent such assets have a total net fair market value exceeding ¥50 million. Such report will be due by March 15 of the following year. The Participant should consult with his or her personal tax advisor to determine if the reporting obligation applies to his or her personal situation.
LUXEMBOURG
There are no country-specific provisions.
MEXICO
Labor Law Acknowledgment. These provisions supplement Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
By accepting the Deferred Units, the Participant understands and agrees that: (i) the Deferred Units are not related to the salary or other contractual benefits granted to the Participant by the Employer; and (ii) any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of the Participants Employment.
In addition, by signing below, the Participant further acknowledges having read and specifically and expressly approved the terms and conditions in this Award Agreement, in which the following is clearly described and established: (i) participation in the Plan does not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company and its Affiliates are not responsible for any decrease in the value of the underlying Blackstone Holdings Partnership Units.
Policy Statement. The invitation the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend and discontinue the Plan at any time, pursuant to the terms of the Plan, without any liability to the Participant.
The Company, with registered offices at 345 Park Avenue, New York, NY 10154, U.S., is solely responsible for the administration of the Plan and participation in the Plan. The acquisition of Blackstone Holdings Partnership Units does not, in any way, establish an employment relationship between the Participant and the Company since the Participant is participating in the Plan on a solely commercial basis and his or her sole employer is BX Real Estate Mexico Sociedad Civil.
Finally, the Participant does not reserve any action or right to bring any claim against the Company for any compensation or damages as a result of participation in the Plan and he or she therefore grants a full and broad release to the Employer, the Company and its other Affiliates with respect to any claim that may arise under or in relation to the Plan.
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Plan Document Acknowledgment. By accepting the Deferred Units, the Participant acknowledges having received a copy of the Plan, having reviewed the Plan and this Award Agreement in their entirety and fully understood and accepted all provisions of the Plan and the Award Agreement.
Spanish Translation
Reconocimiento de la Ley Laboral: Estas disposiciones complementan la Sección 16 del cuerpo principal de este Convenio del Otorgamiento y la Sección 1 del Apéndice A:
Al aceptar las Unidades Diferidas, el Participante reconoce y acepta que: (i) las Unidades Diferidas no se encuentran relacionadas con el salario ni con otras prestaciones contractuales concedidas al Participante por parte del Empleador; y (ii) cualquier modificación del Plan o la terminación del mismo no constituye un cambio o impedimento de los términos y condiciones del Empleo del Participante.
Adicionalmente, al firmar el presente documento, el Participante reconoce que ha leído y que aprueba específica y expresamente los términos y condiciones contenidos en este Convenio del Otorgamiento, en los cuales se encuentran claramente descrito y establecido lo siguiente: (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en el mismo es ofrecida por la Sociedad de forma enteramente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Sociedad, así como sus Afiliadas no son responsables por cualquier disminución en el valor de las Unidades Comunes subyacentes.
Declaración de Política. La invitación por parte de la Sociedad bajo el Plan es unilateral y discrecional y, por lo tanto, la Sociedad se reserva el derecho absoluto de modificar y discontinuar el Plan en cualquier tiempo, de acuerdo con los términos del Plan, sin ninguna responsabilidad hacia el Participante.
La Sociedad, con oficinas registradas ubicadas en 345 Park Avenue, New York, NY, 10154, EE.UU., es la única responsable por la administración del Plan y de la participación en el mismo. La adquisición de Unidades Comunes no establece de forma alguna, una relación laboral entre el Participante y la Sociedad, ya que la participación en el Plan es completamente comercial y el único patrón es BX Real Estate México Sociedad Civil.
Finalmente, el Participante declara que no se reserva ninguna acción o derecho para interponer una demanda en contra de la Sociedad por compensación, daño o perjuicio alguno como resultado de su participación en el Plan y, por lo tanto, otorga el más amplio finiquito al Empleador, la Sociedad y sus otras Afiliadas con respecto a cualquier demanda que pudiera originarse en virtud del Plan.
Reconocimiento dede Documentos del Plan. Al aceptar las Unidades Diferidas, el Participante reconoce que ha recibido una copia del Plan, que ha revisado el Plan y este Convenio del Otorgamiento en su totalidad, y que los ha entendido completamente y acepta todas las disposiciones contenidas en el Pan y en el Convenio del Otorgamiento.
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SINGAPORE
Terms and Conditions
Restrictions on Sale and Transferability. The Participant hereby agrees that any Blackstone Holdings Partnership Units acquired will not be offered for sale in Singapore prior to the six month anniversary of the Date of Grant, unless such sale or offer is made pursuant to the exemptions under Part XIII Division 1 Subdivision (4) (other than section 280) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (SFA), or pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Notifications
Securities Law Information. The grant is being made pursuant to the Qualifying Person exemption under section 273(1)(f) of the SFA, on which basis it is exempt from the prospectus and registration requirements under the SFA and is not made to the Participant with a view to the Deferred Units or the Blackstone Holdings Partnership Units being subsequently offered for sale to any other party. The Plan has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore.
Chief Executive Officer/Director Notification Obligation. If the Participant is the chief executive officer (CEO) or a director, associate director or shadow director of a Singaporean affiliate of the Company, the Participant is subject to certain notification requirements under the Singapore Companies Act. Directors and CEOs must notify the Singaporean affiliate in writing of an interest (e.g., Deferred Units, Blackstone Holdings Partnership Units) in the Company or any related affiliates within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest (e.g., when the Blackstone Holdings Partnership Units are sold), or (iii) becoming a director / CEO.
SOUTH KOREA
Notifications
Foreign Asset/Account Reporting Information. Korean residents must declare all foreign financial accounts (i.e., non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the monthly balance of such accounts exceeds KRW 500 million (or an equivalent amount in foreign currency) on any month-end during a calendar year. The Participant should consult with his or her personal tax advisor to determine the Participants personal reporting obligations.
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SPAIN
Terms and Conditions
No Entitlement or Claims for Compensation. By accepting the grant, the Participant consents to participation in the Plan and acknowledges that he or she has received a copy of the Plan document.
The Participant understands that the Company has unilaterally, gratuitously and in its sole discretion decided to grant Deferred Units under the Plan to individuals who may be employees throughout the world. The decision is limited and entered into based upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any Affiliate, on an ongoing basis, other than as expressly set forth in this Award Agreement. Consequently, the Participant understands that the grant is given on the assumption and condition that the Deferred Units or underlying Blackstone Holdings Partnership Units acquired upon vesting shall not become part of any employment or other service contract (whether with the Company or any Affiliate) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, the Participant understands that this grant would not be made to the Participant but for the assumptions and conditions referred to above; thus, the Participant acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of Deferred Units shall be null and void.
Further, the vesting of the Deferred Units is expressly conditioned on the Participants continued and active rendering of service, such that if the Participants Employment terminates the Deferred Units cease vesting immediately effective on the date of the Participants termination of Employment, unless otherwise provided in this Award Agreement. This will be the case if the Participants Employment terminates for any reason including, but not limited to, resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause (i.e., subject to a despido improcedente), individual or collective dismissal on objective grounds, whether adjudged or recognized to be with or without cause, material modification of the terms of employment under Article 41 of the Workers Statute, relocation under Article 40 of the Workers Statute, and/or Article 50 of the Workers Statute, unilateral withdrawal by the Employer and under Article 10.3 of the Royal Decree 1382/1985.
Notifications
Securities Law Information. No offer of securities to the public, as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of Deferred Units under the Plan. The Plan and this Award Agreement, have not been nor will they be registered with the Comisión Nacional del Mercado de Valores, and do not constitute a public offering prospectus.
B-11
Exchange Control Information. The Participant must declare the acquisition, ownership and disposition of Blackstone Holdings Partnership Units to the Spanish Dirección General de Comercio e Inversiones (DGCI) of the Ministry of Economy and Competitiveness on a Form D-6. Generally, the declaration must be made in January for Blackstone Holdings Partnership Units owned as of December 31 of the prior year and/or Blackstone Holdings Partnership Units acquired or disposed of during the prior year; however, if the value of the Blackstone Holdings Partnership Units acquired or disposed of or the amount of the sale proceeds exceeds 1,502,530 (or if the Participant holds 10% or more of the share capital of the Company or other such amount that would entitle the Participant to join the Board), the declaration must be filed within one month of the acquisition or disposition, as applicable.
In addition, the Participant may be required to electronically declare to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including Blackstone Holdings Partnership Units acquired under the Plan), and any transactions with non-Spanish residents (including any payments of Blackstone Holdings Partnership Units made pursuant to the Plan), depending on the balances in such accounts together with the value of such instruments as of December 31 of the relevant year, or the volume of transactions with non-Spanish residents during the relevant year.
The Participant should consult with his or her personal advisor to determine the Participants obligations in this respect.
Foreign Asset/Account Reporting Information. To the extent that the Participant holds rights or assets (e.g., cash or Blackstone Holdings Partnership Units held in a bank or brokerage account) outside of Spain with a value in excess of 50,000 per type of right or asset as of December 31 each year (or at any time during the year in which the Participant sells or disposes of such right or asset), the Participant is required to report information on such rights and assets on his or her tax return for such year. After such rights or assets are initially reported, the reporting obligation will only apply for subsequent years if the value of any previously-reported rights or assets increases by more than 20,000 of if the Participant sells or otherwise disposes of previously-reported rights or assets. The Participant should consult with his or her personal tax advisor to ensure compliance with applicable reporting requirements.
UNITED ARAB EMIRATES
Terms and Conditions
Nature of Grant. This provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
The Participant acknowledges that the Deferred Units and related benefits do not constitute a component of the Participants wages for any legal purpose. Therefore, the Deferred Units and related benefits will not be included and/or considered for purposes of calculating any and all labor benefits, such as social insurance contributions and/or any other labor-related amounts which may be payable.
B-12
Notifications
Securities Law Information. The grant of Deferred Units is being offered only to eligible individuals under the Plan and is in the nature of providing equity incentives to employees in the United Arab Emirates. The Plan and the Award Agreement are intended for distribution only to such employees and must not be delivered to, or relied on by, any other person. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying the documents in connection with the Plan. Neither the Ministry of Economy nor the Dubai Department of Economic Development have approved the Plan or this Award Agreement nor taken steps to verify the information set out therein, and have no responsibility for such documents.
UNITED KINGDOM
Terms and Conditions
Withholding. The following provisions further supplement Section 13 of this Award Agreement:
Without limitation to any provision of the Award Agreement, the Participant agrees that the Participant is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or the Employer or by Her Majestys Revenue & Customs (HRMC) (or any other tax authority or any other relevant authority). The Participant also agrees to indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay on the Participants behalf to HMRC (or any other tax authority or any other relevant authority).
Notwithstanding the foregoing, in the event that the Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities Exchange Act of 1934, as amended), the Participant understands that he or she may not be able to indemnify the Company for the amount of any income tax not collected from or paid by the Participant, in case the indemnification could be considered to be a loan. In this case, the income tax not collected or paid may constitute a benefit to the Participant on which additional income tax and National Insurance contributions may be payable. The Participant understands that he or she will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company or the Employer, as applicable, for the value of any National Insurance contributions due on this additional benefit, which may also be recovered from the Participant at any time by any of the means referred to in this Section 13.
B-13
Exhibit 10.103
THE BLACKSTONE GROUP INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
BX EQUITY AWARD
DEFERRED UNIT AGREEMENT
Participant: | Date of Grant: | |
Number of Deferred Units: |
1. Grant of Deferred Units. The Company hereby grants the number of deferred units (the Deferred Units) listed above to the Participant (the Award), effective as of the Date of Grant on the terms and conditions hereinafter set forth in this agreement, including any appendix, exhibit or addendum hereto (the Award Agreement). This grant is made pursuant to the terms of The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan (as amended, modified or supplemented from time to time, the Plan), which is incorporated herein by reference and made a part of this Award Agreement. Each Deferred Unit represents the unfunded, unsecured right of the Participant to receive a Common Share on the delivery date(s) specified in Section 4 hereof.
2. Definitions. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.
(a) Cause shall mean the occurrence or existence of any of the following as determined fairly, reasonably, on an informed basis and in good faith by the Administrator: (i) any breach by the Participant of any provision of the Non-Competition, Non-Solicitation and Confidentiality Agreements to which the Participant is a party, (ii) any material breach of any rules or regulations of the Company or its Affiliates applicable to the Participant, (iii) Participants deliberate failure to perform his or her duties to the Company or its Affiliates, (iv) Participants committing to or engaging in any conduct or behavior that is or may be harmful to the Company or its Affiliates in a material way; (v) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or its Affiliates; or (vi) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that the Participant individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) the Participants ability to function as an employee of the Company or its Affiliates, taking into account the employment required of the Participant and the nature of the Companys or its Affiliates business or (B) the business of the Company or its Affiliates.
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(b) Common Share shall mean a share of the Companys Common Stock.
(c) Employment Agreement shall mean the Contracting Employee Agreement (including all schedules and exhibits thereto), entered into between the Blackstone Administrative Services Partnership L.P. (or any of its or the Companys Affiliates) and the Participant or, if the Participant is or becomes a Senior Managing Director, the Senior Managing Director Agreement (including all schedules and exhibits thereto), entered into between the Blackstone Holdings I L.P. (or any of its or the Companys Affiliates) and the Participant.
(d) Holdback Delivery Date shall mean the second anniversary with respect to each Vesting Date (each such date, a Scheduled Release Date); provided, however, that if the Participant terminates Employment prior to any such Scheduled Release Date, then the Holdback Delivery Date applicable to all remaining Retention Units shall be the second anniversary of the date of the Participants termination of Employment.
(e) Non-Competition, Non Solicitation and Confidentiality Agreement shall mean any agreement, and any attachments or schedules thereto, entered into by and between the Participant and the Company or its Affiliates, pursuant to which the Participant has agreed, among other things, to certain restrictions relating to non-competition, non-solicitation and/or confidentiality, in order to protect the business of the Company and its Affiliates.
(f) Qualifying Event shall mean, during the Participants Employment with the Company and its Affiliates, the Participants death, Disability or Retirement.
(g) Retirement shall mean the retirement of the Participant from his or her Employment with the Company and its Affiliates after (i) the Participant has reached age 65 and has at least five full years of service with the Company and its Affiliates, or (ii) (x) the Participants age plus years of service with the Company and its Affiliates totals at least 65, (y) the Participant has reached age 55, and (z) the Participant has had a minimum of five years of service.
(h) Retention Percentage shall mean 25% of the vested units until the corresponding Holdback Delivery Date for each Vesting Date.
(i) Retention Units shall mean, on any given date, the Deferred Units that have become Vested Deferred Units and which are retained by the Company (along with the underlying Common Shares) in accordance with Section 4 hereof.
(j) Vested Deferred Units shall mean those Deferred Units which have become vested pursuant to Section 3 or otherwise pursuant to the Plan.
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(k) Vesting Dates shall mean each of the First Vesting Date, the Second Vesting Date, the Third Vesting Date, the Fourth Vesting Date and the Fifth Vesting Date.
(l) Vesting Reference Date shall mean .
3. Vesting.
(a) Vesting General. Subject to the Participants continued Employment with the Company and its Affiliates, the Award shall vest on the applicable Vesting Dates as follows:
(i) % of the Deferred Units granted hereunder shall vest on the first anniversary of the Vesting Reference Date (the First Vesting Date); an additional % of the Deferred Units granted hereunder shall vest on the second anniversary of the Vesting Reference Date (the Second Vesting Date); an additional % of the Deferred Units granted hereunder shall vest on the third anniversary of the Vesting Reference Date (the Third Vesting Date); an additional % of the Deferred Units granted hereunder shall vest on the fourth anniversary of the Vesting Reference Date (the Fourth Vesting Date); and the remaining % of the Deferred Units granted hereunder shall vest on the fifth anniversary of the Vesting Reference Date (the Fifth Vesting Date).
(b) Vesting Qualifying Events.
(i) Death or Disability. Upon the occurrence of a Qualifying Event on account of the death or Disability of the Participant, 100% of the Deferred Units granted hereunder shall vest (to the extent not previously vested) upon the date of such event.
(ii) Retirement. Upon the occurrence of a Qualifying Event on account of the Retirement of the Participant, (I) 50% of the then unvested Deferred Units shall remain eligible to vest upon each of the following scheduled Vesting Dates, and (II) all other unvested Deferred Units shall be cancelled immediately and the Participant shall automatically forfeit all rights with respect to such unvested Deferred Units upon the date of such event; provided that if, following the Participants Retirement, the Participant breaches any applicable provision of the Non-Competition, Non-Solicitation and Confidentiality Agreement to which the Participant is a party or otherwise engages in any Competitive Activity, the Participants Deferred Units which remain undelivered as of the date of such violation or engagement in Competitive Activity, as determined by the Administrator in its sole discretion, will be forfeited without payment. As a pre-condition to a Participants right to continued vesting and delivery of the Deferred Units following Retirement, the Administrator may require the Participant to certify in writing prior to each scheduled Vesting Date that the Participant has not breached any applicable provisions of the Participants Non-Competition, Non-Solicitation and Confidentiality Agreement or otherwise engaged in any Competitive Activity.
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(c) Vesting Terminations. Except as otherwise set forth in Section 3(b), in the event the Participants Employment with the Company and its Affiliates is terminated for any reason, the portion of the Award that has not yet vested pursuant to Section 3(a) or 3(b) hereof (or otherwise pursuant to the Plan) shall be cancelled immediately and the Participant shall automatically forfeit all rights with respect to such portion of the Award as of the date of such termination.
4. Delivery.
(a) Delivery General. The Company shall, on each applicable Vesting Date set forth below, deliver to the Participant the Common Shares underlying the Deferred Units which vest and become Vested Deferred Units on such date; provided that on each such Vesting Date, the Company shall retain, as Retention Units (and withhold the corresponding underlying Common Shares with respect thereto) a number of Vested Deferred Units so that the aggregate number of Retention Units at such time (expressed as a percentage of the aggregate number of Deferred Units awarded to the Participant which have vested as of such date) is equal to the applicable Retention Percentage. The Common Shares underlying Retention Units will be delivered to the Participant as and when, and to the extent that, the number of Retention Units at any time exceeds the applicable Retention Percentage, as illustrated in the table below, with the Common Shares underlying any remaining Retention Units delivered to the Participant upon the corresponding Holdback Delivery Date.
Annual
Vesting |
Cumulative
Vesting |
Retention
Percentage |
Annual
Delivery Percentage |
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First Vesting Date |
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Second Vesting Date |
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Third Vesting Date |
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Fourth Vesting Date |
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Fifth Vesting Date |
(b) Delivery Qualifying Events.
(i) Death or Disability. Upon the occurrence of a Qualifying Event on account of the Participants death or Disability, the Company shall, within a reasonable time following the date of such event, deliver Common Shares to the Participant in respect of 100% of the Deferred Units which vest and become Vested Deferred Units on such Date and any then outstanding Retention Units (to the extent not previously delivered).
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(ii) Retirement. Following the occurrence of a Qualifying Event on account of the Participants Retirement, the Company shall, on each subsequent Vesting Date, deliver Common Shares to the Participant in respect of those Deferred Units which vest and become Vested Deferred Units as of each following Vesting Date by application of Section 3(b)(ii); provided that the Company will retain such Retention Units as are necessary to meet the Retention Percentage until such requirement lapses upon the corresponding Holdback Delivery Date(s).
(c) Delivery Terminations. Except as otherwise set forth in Section 4(b) or 4(d), in the event the Participants Employment with the Company and its Affiliates is terminated for any reason, the Company shall (i) within a reasonable time of such termination, deliver Common Shares to the Participant in respect of the Vested Deferred Units as of such date that are not Retention Units (if any), and (ii) deliver Common Shares to the Participant in respect of the Retention Units in accordance with the delivery schedule set forth in Section 4(a), until the corresponding Holdback Delivery Date(s), at which point the remaining Retention Units shall be delivered to the Participant.
(d) Forfeiture Cause Termination or Breach of Restrictive Covenants. Notwithstanding anything to the contrary herein, upon the termination of the Participants Employment by the Company or any of its Affiliates for Cause or upon the Participants breach of any of the restrictive covenants contained within an applicable Non-Competition, Non-Solicitation and Confidentiality Agreement, all outstanding Deferred Units (whether or not vested) and Retention Units shall immediately terminate and be forfeited without consideration and no further Common Shares with respect of the Award shall be delivered to the Participant or to the Participants legal representative, beneficiaries or heirs. Without limiting the foregoing, any Common Shares that have previously been delivered to the Participant or the Participants legal representative, beneficiaries or heirs pursuant to the Award and which are still held by the Participant or the Participants legal representative, or beneficiaries or heirs as of the date of such termination for Cause or such breach, shall also immediately terminate and be forfeited without consideration.
5. Change in Control. Notwithstanding anything to the contrary herein, in the event of a Change in Control, (i) 100% of the Deferred Units granted hereunder which then remain outstanding shall vest (to the extent not previously vested) upon the date of such Change in Control, and (ii) the Company shall deliver Common Shares to the Participant at the same times as would otherwise be delivered pursuant to Section 4(a); provided, however, if such Change in Control (or any subsequent Change in Control) would constitute a change in the ownership or effective control or a change in the ownership of a substantial portion of the assets of the Company (in each case within the meaning of Section 409A of the Code), the Company shall instead deliver Common Shares to the Participant in respect of 100% of the then outstanding Deferred Units and Retention Units (to the extent not previously delivered) on or within 10 days following such Change in Control.
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6. Distributions. If on any date while Deferred Units are outstanding hereunder any cash distributions shall be paid on the Common Shares (whether vested or unvested), the Participant shall be entitled to receive, as of such distribution date, a cash payment equal to the product of (a) the number of Deferred Units, if any, held by the Participant as of the related distribution date, multiplied by (b) the per Common Share amount of such cash distribution.
7. Adjustments Upon Certain Events. The Administrator shall, in its sole discretion, make certain substitutions or adjustments to any Retention Units or Deferred Units subject to this Award Agreement pursuant to Section 9 of the Plan.
8. No Right to Continued Employment. The granting of the Deferred Units evidenced by this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Employment of the Participant and shall not lessen or affect the Companys or its Affiliates right to terminate the Employment of such Participant.
9. No Rights of a Holder of Common Shares. Except as otherwise provided herein, the Participant shall not have any rights as a holder of Common Shares until such Common Shares have been issued or transferred to the Participant.
10. Restrictions. Any Common Shares issued or transferred to the Participant pursuant to Section 4 of this Award Agreement shall be subject to such stop transfer orders and other restrictions as the Administrator may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Common Shares are listed and any applicable U.S. or non-U.S. federal, state or local laws, and the Administrator may cause a notation or notations to be entered into the books and records of the Company to make appropriate reference to such restrictions.
11. Transferability. Unless otherwise determined or approved by the Administrator, no Deferred Units or Retention Units may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance not permitted by this Section 11 shall be void and unenforceable against the Company or any Affiliate.
12. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing (including electronically) and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by electronic means, by courier service, by fax, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12):
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(a) If to the Company, to:
The Blackstone Group Inc.
345 Park Avenue
New York, New York, 10154
Attention: Chief Legal Officer
Fax:
(b) If to the Participant, to the address appearing in the personnel records of the Company or any Affiliate.
13. Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any issuance or transfer due under this Award Agreement or under the Plan or from any compensation or other amount owing to the Participant, applicable withholding taxes with respect to any issuance or transfer under this Award Agreement or under the Plan and to take such action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes, including, without limitation, by reducing the number of Common Shares that would otherwise be transferred or issued pursuant to this Award Agreement. Without limiting the foregoing, the Administrator may, from time to time, permit the Participant to make arrangements prior to any vesting date or delivery date described herein to pay the applicable withholding taxes by remitting a check prior to the applicable vesting or delivery date.
14. Choice of Law. The interpretation, performance and enforcement of this Award Agreement shall be governed by the law of the State of New York.
15. Subject to Plan. By entering into this Award Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. All Deferred Units, Retention Units and Common Shares issued or transferred with respect thereof are subject to the Plan. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
16. Nature of Grant. By accepting the Deferred Units, the Participant acknowledges, understands and agrees that:
(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;
(b) the grant of Deferred Units is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Deferred Units or benefits in lieu of Deferred Units, even if Deferred Units have been granted in the past;
(c) all decisions with respect to future Deferred Units or other grants, if any, will be at the sole discretion of the Company;
(d) the Participant is voluntarily participating in the Plan;
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(e) the Deferred Units and the underlying Common Shares, and the income from and value of same, are not intended to replace any pension rights or compensation;
(f) unless otherwise agreed with the Company, the Deferred Units and the underlying Common Shares, and the income from and value of same, are not granted as consideration for, or in connection with, the service the Participant may provide as a director of any affiliate of the Company;
(g) the Deferred Units and the underlying Common Shares, and the income from and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, indemnification, pension or retirement or welfare benefits or similar payments, benefits or rights of any kind;
(h) the future value of the underlying Common Shares is unknown, indeterminable and cannot be predicted with certainty;
(i) no claim or entitlement to compensation or damages shall arise from the forfeiture of the Deferred Units resulting from the Participants termination of Employment (for any reason whatsoever, whether or not later found to be invalid or in breach of employment or other laws in the jurisdiction where the Participant is employed or otherwise rendering services, or the terms of his or her employment or service agreement, if any); and
(j) for purposes of the Deferred Units, the Participants Employment will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of his or her employment or service agreement, if any) as of the date that is the earlier of (i) the date he or she is no longer actively providing services to the Company or an Affiliate or (ii) the date he or she receives notice of termination of Employment from the Company or Affiliate, and unless otherwise expressly provided in this Award Agreement or determined by the Company, the Participants right to vest in the Deferred Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., the Participants period of service would not include any contractual notice period or any period of garden leave or similar period mandated under employment laws in the jurisdiction where the Participant is employed or otherwise rendering services, or the terms of his or her employment or service agreement, if any). The Administrator will have exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Deferred Units.
17. Non-U.S. and Country Specific Provisions. If the Participant resides in a country outside the United States or its territories, or is otherwise subject to the laws of a country other than the United States, the Deferred Units and any underlying Common Shares acquired under the Plan shall be subject to the additional terms and conditions set forth in Appendix A and to the terms and conditions set forth in Appendix B for the Participants country, if any. Moreover, if the Participant relocates outside the United States or its territories, the terms and conditions set forth in Appendices A and B will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.
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18. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participants participation in the Plan, or his or her acquisition or sale of the underlying Common Shares. The Participant should consult with his or her own tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
19. Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
20. Waiver. The Participant acknowledges that a waiver by the Company of breach of any provision of this Award Agreement shall not operate or be construed as a waiver of any other provision of the Award Agreement, or of any subsequent breach of this Award Agreement.
21. Entire Agreement. This Award Agreement contains the entire understanding between the parties with respect to the Deferred Units granted hereunder (including, without limitation, the vesting and delivery schedules described herein), and hereby replaces and supersedes any prior communication and arrangements between the Participant and the Company or any of its Affiliates with respect to the matters set forth herein and any other pre-existing economic or other arrangements between the Participant and the Company or any of its Affiliates.
22. Modifications. Notwithstanding any provision of this Award Agreement to the contrary, the Company reserves the right to modify the terms and conditions of this Award Agreement, including, without limitation, the timing or circumstances of the issuance or transfer of Common Shares to the Participant hereunder, to the extent such modification is determined by the Company to be necessary or advisable for legal or administrative reasons or to preserve the intended deferral of income recognition with respect to the Deferred Units and Retention Units until the issuance or transfer of Common Shares hereunder.
23. Electronic Delivery and Acceptance. The Company, in its sole discretion, may decide to deliver any documents related to current or future participation in the Plan by electronic means. Electronic delivery of a document to the Participant may be via a Company e-mail system, an online or electronic system established and maintained by a third party administrator of the Plan, or by reference to a location on a Company intranet site to which the Participant has access. The Participant hereby agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company desires or may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other agreements, forms and communications), in connection with this and any other prior or future incentive award or program offered by the Company and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
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24. Signature in Counterparts. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
[Signatures on next page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement.
THE BLACKSTONE GROUP INC. |
|
Name: |
THE PARTICIPANT1 |
|
Name: |
1 |
To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this award electronically, such acceptance shall constitute Participants signature hereof. |
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APPENDIX A
to
THE BLACKSTONE GROUP INC.
DEFERRED UNIT AGREEMENT
ADDITIONAL TERMS AND CONDITIONS
FOR PARTICIPANTS OUTSIDE THE UNITED STATES
The following terms and conditions (where applicable) apply to Participants who reside outside the United States or its territories or who are otherwise subject to the laws of a country other than the United States.
1. Nature of Grant. The follow provision supplements Section 16 of the main body of this Award Agreement:
Neither the Company nor any Affiliate shall be liable for any foreign exchange rate fluctuation between the Participants local currency and the U.S. Dollar that may affect the value of the Deferred Units or any amounts due to the Participant pursuant to the settlement of the Deferred Units (in Common Shares or cash) or subsequent sale of underlying Common Shares acquired upon settlement.
2. Withholding. The following provisions supplement Section 13 of the main body of this Award Agreement:
The Participant acknowledges and agrees that, regardless of any action taken by the Company or the Affiliate employing the Participant (the Employer), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Deferred Units and the Participants participation in the Plan (Tax-Related Items) is and remains the Participants sole responsibility and may exceed the amount, if any, withheld by the Company or the Employer. The Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Deferred Units, including, but not limited to, the grant, vesting or settlement of the Deferred Units, the subsequent sale of Common Shares acquired pursuant to such settlement and the receipt of any distributions; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Deferred Units to reduce or eliminate the Participants liability for Tax-Related Items or achieve any particular tax result. If the Participant is subject to Tax-Related Items in more than one jurisdiction, the Participant acknowledges and agrees that the Company or Affiliate, as applicable, may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
A-1
In addition to the withholding methods specified above in this Section 13, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to
all Tax-Related Items by (i) withholding from the proceeds of the sale of Common Shares acquired at vesting of the Deferred Units through a voluntary sale or through a mandatory sale arranged by the Company (on the Participants behalf pursuant to this authorization without further consent) or (ii) any other method of withholding determined by the Company and permitted by applicable law.
Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Participants jurisdiction(s), in which case the Participant may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Common Shares. If the obligation for Tax-Related Items is satisfied by withholding Common Shares that would otherwise be transferred or issued pursuant to this Award Agreement, for tax purposes, the Participant is deemed to have been issued the full number of Common Shares subject to the vested Deferred Units, notwithstanding that a number of the Common Shares are held back solely for the purpose of paying the Tax-Related Items.
The Company may refuse to issue the Common Shares or deliver the proceeds of the sale of Common Shares if the Participant fails to comply with his or her obligations in connection with the Tax-Related Items.
3. Data Privacy. For the purposes of complying with the General Data Protection Regulation (EU) 2016/679, relevant Participants will be provided with separate information in respect of the collection and processing of their personal data. For the purposes of the remainder of this clause 3 (of Appendix A) only, Participant means a Participant who resides outside of the European Union.
The Participant hereby explicitly, voluntarily and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participants personal data as described in this Award Agreement and any other Plan materials by and among, as applicable, the Employer, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing the Participants participation in the Plan.
The Participant understands that the Company and the Employer may hold certain personal information about the Participant, including, but not limited to, the Participants name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Common Shares or directorships held in the Company, details of any entitlement to Common Shares awarded, canceled, exercised, vested, unvested or outstanding in the Participants favor, for the purpose of implementing, administering and managing the Plan (Data).
The Participant understands that Data will be transferred to Merrill Lynch, Pierce, Fenner & Smith Incorporated or such other stock plan providers as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. The Participant understands that those receiving the Data may be located in the United States or elsewhere, and that the applicable
A-2
country (e.g., the United States) may have different data privacy laws and protections than the Participants country. The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Participant authorizes the Company, and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Participants participation in the Plan. The Participant understands that Data will be held as long as is necessary to implement, administer and manage the Participants participation in the Plan, as determined by the Company in its sole discretion. The Participant understands that he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, the Participant understands that he or she is providing the consents herein on a purely voluntary basis. If the Participant does not consent, or later seeks to revoke his or her consent, the Participants employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant Deferred Units or other equity awards under the Plan, or administer or maintain such awards. Therefore, the Participant understands that refusing or withdrawing his or her consent may affect the Participants ability to participate in the Plan. For more information on the consequences of the Participants refusal to consent or withdrawal of consent, the Participant understands that he or she may contact his or her local human resources representative.
4. Language. The Participant acknowledges that he or she is sufficiently proficient in English to understand the terms and conditions of the Award Agreement. Furthermore, if the Participant receives this Award Agreement or any other document related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
5. Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that the Participant may be subject to insider trading and/or market abuse laws based on the exchange on which the Common Shares are listed and in applicable jurisdictions including the United States and the Participants country or the brokers country, if different, which may affect the Participants ability to accept, acquire, sell or otherwise dispose of Common Shares or rights to Common Shares (e.g., Deferred Units) or rights linked to the value of Common Shares, during such times as the Participant is considered to have inside information regarding the Company (as defined by the laws or regulations in the applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant may be prohibited from (i) disclosing the inside information to any third party including colleagues of the Participant (other than on a need to know basis) and (ii) tipping third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. The Participant is responsible for ensuring compliance with any applicable restrictions and should consult with his or her personal legal advisor on this matter.
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6. Foreign Asset/Account, Exchange Control and Tax Reporting. The Participant acknowledges that, depending on his or her country, the Participant may be subject to foreign asset and/or account reporting requirements and exchange control regulations which may affect his or her ability to acquire or hold Common Shares under the Plan or cash received from participating in the Plan (including from any distributions received or sale proceeds arising from the sale of Common Shares) in a brokerage or bank account outside of the Participants country. The Participant may also be required to repatriate sale proceeds or funds received as a result of his or her participation in the Plan to his or her country through a designated bank and/or broker within a certain time after receipt. In addition, the Participant may be subject to tax payments and/or other reporting obligations in connection with any income realized under the Plan, and or from the sale of the underlying Common Shares. The Participant acknowledges that he or she is responsible for ensuring compliance with any such requirements and is advised to consult with his or her personal legal advisors, as applicable, to ensure compliance.
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APPENDIX B
TO
THE BLACKSTONE GROUP INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
SPECIAL EQUITY AWARD
DEFERRED UNIT AGREEMENT
COUNTRY-SPECIFIC TERMS AND CONDITIONS
Terms and Conditions
This Appendix B includes additional terms and conditions applicable to Participants in the countries below. These terms and conditions are in addition to, or, if so indicated, in place of, the terms and conditions set forth in the Award Agreement, including Appendix A. If the Participant is a citizen (or is considered as such for local purposes) of a country other than the country in which he or she is currently residing and/or working, or if he or she relocates to another country after the Deferred Units are granted, the Company will, in its discretion, determine the extent to which the terms and conditions contained herein will be applicable to the Participant.
Notifications
This Appendix B also includes information regarding securities law, exchange controls and certain other issues of which the Participant should be aware with respect to participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of January 2019. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant not rely on the information contained herein as the only source of information relating to the consequences of his or her participation in the Plan because the information may be out of date by the time he or she vests in the Deferred Units or sells Common Shares acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Participants particular situation, and the Company is not in a position to assure the Participant of a particular result. Accordingly, the Participant should seek appropriate professional advice as to how the relevant laws in his or her country may apply to the Participants particular situation.
Finally, if the Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which he or she is currently residing and/or working, or if the Participant relocates to another country after the Deferred Units are granted, the notifications contained herein may not be applicable to him or her in the same manner.
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AUSTRALIA
Notifications
Tax Information. Subdivision 83A-C of the Income Tax Assessment Act 1997 applies to the Deferred Units granted in accordance with the terms and conditions of the Plan and this Award Agreement (subject to the requirements of the Income Tax Assessment Act 1997).
BRAZIL
Terms and Conditions
Compliance with Law. By accepting the Deferred Units, the Participant acknowledges that he or she will comply with applicable Brazilian laws and pay any applicable Tax-Related Items associated with the vesting and settlement of the Deferred Units and the sale of Common Shares under the Plan.
Nature of Grant. The follow provision supplements Section 16 of the main
body of this Award Agreement and Section 1 of
Appendix A:
By accepting the Deferred Units, the Participant acknowledges that (i) the grant of Deferred Units is not part of normal or expected compensation for any reason whatsoever and will have no impact on Participants Employment or service relationship, (ii) the underlying Common Shares will be issued to the Participant only if the vesting conditions are met, and (iii) the value of the underlying Common Shares is not fixed and may increase or decrease without compensation to the Participant.
Notifications
Foreign Asset/Account Reporting Information. If the Participant is resident or domiciled in Brazil, the Participant will be required to submit an annual declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal to or greater than US$100,000. Assets and rights that must be reported include Common Shares acquired under the Plan. Foreign individuals holding Brazilian visas are considered Brazilian residents for purposes of this reporting requirement and must declare at least the assets held abroad that were acquired subsequent to the date of admittance as a resident of Brazil.
CANADA
Terms and Conditions
Delivery. Notwithstanding any discretion contained in Section 8 of the Plan, the grant of Deferred Units does not provide any right for the Participant to receive a cash payment and as provided in Section 4 of the main body of this Award Agreement, Vested Deferred Units will be satisfied through the delivery of Common Shares.
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Termination of Employment. The following provision replaces Section 16(j) of the main body of this Award Agreement:
(j) for purposes of the Deferred Units, the Participants Employment will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of his or her employment or service agreement, if any) as of the date that is the earlier of (i) the date of the Participants termination of Employment or (ii) the date the Participant is no longer actively providing service (regardless of any notice period or period of pay in lieu of such notice required under applicable Canadian employment laws (including, but not limited to statutory law, regulatory law and/or common law)). The Administrator will have exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Deferred Units (including whether the Participant may still be considered to be providing services while on a leave of absence).
Notifications
Securities Law Information. The Participant is permitted to sell Common Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the sale of the Common Shares takes place outside of Canada through the facilities of a stock exchange on which the Common Shares are listed (i.e., the New York Stock Exchange).
Foreign Asset/Account Reporting Information. Canadian resident Participants are required to report any specified foreign property on form T1135 (Foreign Income Verification Statement) if the total value of the specified foreign property exceeds C$ 100,000 at any time in the year. Specified foreign property includes Common Shares acquired under the Plan, and may include the Deferred Units. The Deferred Units must be reported (generally at a nil cost) if the C$ 100,000 cost threshold is exceeded because of other foreign property the Participant holds. If Common Shares are acquired, their cost generally is the adjusted cost base (ACB) of the Common Shares. The ACB ordinarily would equal the fair market value of the Common Shares at the time of acquisition, but if the Participant owns other Common Shares, this ACB may have to be averaged with the ACB of the other Common Shares. The form must be filed by April 30 of the following year. The Participant should consult with his or her personal legal advisor to ensure compliance with applicable reporting obligations.
CHINA
The following Terms and Conditions apply to Participants that are subject to the exchange control restrictions and regulations in the Peoples Republic of China (China), including the requirements imposed by the State Administration of Foreign Exchange (SAFE), as determined by the Company in its sole discretion.
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Terms and Conditions
Delivery. Notwithstanding Section 4 of this Award Agreement, delivery of Common Shares is conditioned upon the Company securing and maintaining all necessary approvals from SAFE and any other applicable government entities in China to permit the operation of the Plan in China, as determined by the Company it its sole discretion. If or to the extent the Company is unable to complete the registration or maintain the registration, no Common Shares subject to the Deferred Units for which a registration cannot be completed or maintained shall be issued. In this case, the Company retains the discretion to settle any Deferred Units in cash paid through local payroll in an amount equal to the fair market value of the Common Shares on the settlement date, subject to the Deferred Units less any Tax-Related Items.
Exchange Control Restrictions. Exchange control restrictions apply to the remittance of funds into and out of China. In the event that Common Shares are delivered upon settlement of the Deferred Units, the Participant understands and agrees that, pursuant to local exchange control requirements, he or she will be required to immediately repatriate the cash proceeds from the sale of Common Shares and any cash distributions paid on such Common Shares to China. The Participant further understands that, under local law, such repatriation of cash proceeds may need to be effectuated through a special exchange control account established by the Company, the Employer or any other Affiliate, and the Participant hereby consents and agrees that any proceeds from the sale of Common Shares or any cash distributions paid on such Common Shares may be transferred to such special account prior to being delivered to the Participant.
The proceeds may be paid to the Participant in U.S. dollars or local currency at the Companys discretion. In the event the proceeds are paid to the Participant in U.S. dollars, he or she understands that he or she will be required to set up a U.S. dollar bank account in China and provide the bank account details to the Employer and/or the Company so that the proceeds may be deposited into this account. If the proceeds are paid to the Participant in local currency, the Company is under no obligation to secure any particular exchange conversion rate and/or conversion date and the Company may face delays in converting the proceeds to local currency due to exchange control restrictions. The Participant agrees to bear any currency fluctuation risk between the time the Common Shares are sold or distributions are received and the time the proceeds are distributed through any such special exchange account. The Participant further agrees to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.
DENMARK
Terms and Conditions
Exclusion from Termination Indemnities and Other Benefits. This provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
In accepting the Deferred Units, the Participant acknowledges that he or she understands and agrees that this grant relates to future services to be performed and is not a bonus or compensation for past services.
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Notifications
Foreign Asset/Account Reporting Information. The prior rules that required the Participant to submit certain forms (Declaration V and Declaration K) to the Danish Tax Authorities reporting Common Shares held in foreign bank or brokerage accounts and deposit accounts with a foreign bank were eliminated as of January 1, 2019. Please note, however, that the Participant is required to report the foreign bank/brokerage accounts and their deposits and Common Shares held in foreign bank or brokerage accounts on his or her personal tax return under the section on foreign affairs and income.
FRANCE
Terms and Conditions
Language Consent. By Accepting the Award Agreement providing for the terms and conditions of the Participants grant, the Participant confirms having read and understood the documents relating to this grant (the Plan and the Award Agreement) which were provided in the English language. The Participant accepts the terms of these documents accordingly.
Consentement relatif à la réception d informations en langue anglaise. En acceptant le Contrat d Attribution décrivant les termes et conditions de l attribution, le Participant confirme ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan et le Contrat d Attribution) qui ont été communiqués en langue anglaise. Le Participant accepte les termes de ces documents en connaissance de cause.
Notifications
Foreign Asset/Account Reporting Information. The Participant may hold Common Shares acquired under the Plan provided the Participant declares all foreign bank and brokerage accounts (including accounts opened or closed during the tax year) in the Participants tax return. Failure to comply could trigger significant penalties.
GERMANY
Notifications
Exchange Control Information. Cross-border payments in excess of 12,500 must be reported monthly to the German Federal Bank (Bundesbank). In the event that the Participant makes or receives a payment in excess of this amount, he or she must report the payment to Bundesbank electronically using the General Statistics Reporting Portal (Allgemeines Meldeportal Statistik) available via Bundesbanks website (www.bundesbank.de).
Foreign Asset/Account Reporting Information. German residents holding Common Shares must notify their local tax office of the acquisition of Common Shares when they file their tax returns for the relevant year if the value of the Common Shares exceeds 150,000 or in the unlikely event that the resident holds Common Shares exceeding 10% of the Companys capital.
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HONG KONG
Terms and Conditions
Restrictions on Sale of Common Shares. Any Common Shares received at vesting are accepted as a personal investment. In the event the Deferred Units vest and Common Shares are issued to the Participant within six months of the Date of Grant, the Participant agrees that he or she will not sell any Common Shares acquired prior to the six month anniversary of the Date of Grant.
Notifications
Securities Law Information. WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. The Participant is advised to exercise caution in relation to the offer. If the Participant is in any doubt about any of the contents of this document, he or she should obtain independent professional advice. Neither the grant of the Deferred Units nor the issuance of underlying Common Shares upon vesting of the RSUs constitutes a public offering of securities under Hong Kong law and is available only to employees of the Company and any Affiliate. This Award Agreement, the Plan and other incidental communication materials distributed in connection with the Deferred Units (i) have not been prepared in accordance with and are not intended to constitute a prospectus for a public offering of securities under the applicable securities legislation in Hong Kong and (ii) are intended only for the personal use of each eligible employee of the Company or any Affiliate and may not be distributed to any other person.
INDIA
Notifications
Exchange Control Information. Indian residents must repatriate any proceeds from the sale of Common Shares acquired under the Plan or the receipt of any distributions paid on such Common Shares to India and convert the proceeds into local currency within a certain period after receipt (90 days for sale proceeds and 180 days for distributions, or such other period of time as may be required under applicable regulations). The Participant will receive a foreign inward remittance certificate (FIRC) from the bank where he or she deposits the foreign currency. The Participant should maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation. The Participant acknowledges that it is the Participants sole responsibility to comply with the applicable exchange control laws in India.
Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including Common Shares held outside of India) in their annual tax returns. The Participant is responsible for complying with this reporting obligation and should consult with his or her personal tax advisor in this regard.
B-6
IRELAND
Terms and Conditions
Nature of Grant. The following provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
By accepting the Deferred Units, the Participant acknowledges that any Deferred Units granted to him or her by the Company are separate from any compensation or employment benefits offered to the Participant by the Employer, and that the Deferred Units shall not be considered employment-related compensation for any purposes, including any severance or termination payment made to the Participant by the Employer as a result of his or her termination of Employment.
ITALY
Terms and Conditions
Grant Terms Acknowledgment. By accepting the Deferred Units, the Participant acknowledges having received and reviewed the Plan and this Award Agreement, in their entirety and fully understands and accepts all provisions of the Plan and this Award Agreement. The Participant further acknowledges that he or she has specifically read and expressly approves the following provisions of this Award Agreement: Sections 3, 4, 13, 14, 22 and section 3 of Appendix A.
Notifications
Foreign Asset/Account Reporting Information. Italian residents who, at any time during the fiscal year, hold foreign financial assets (including cash and Common Shares) which may generate income taxable in Italy are required to report these assets on their annual tax returns (UNICO Form, RW Schedule) for the year during which the assets are held, or on a special form if no tax return is due. These reporting obligations will also apply to Italian residents who are the beneficial owners of foreign financial assets under Italian money laundering provisions. The Participant should consult his or her personal tax advisor to ensure compliance with applicable reporting obligations.
JAPAN
Notifications
Foreign Asset/Account Reporting Information. The Participant is required to report the details of any assets held outside of Japan (including Common Shares acquired under the Plan as of December 31), to the extent such assets have a total net fair market value exceeding ¥50 million. Such report will be due by March 15 of the following year. The Participant should consult with his or her personal tax advisor to determine if the reporting obligation applies to his or her personal situation.
B-7
LUXEMBOURG
There are no country-specific provisions.
MEXICO
Labor Law Acknowledgment. These provisions supplement Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
By accepting the Deferred Units, the Participant understands and agrees that: (i) the Deferred Units are not related to the salary or other contractual benefits granted to the Participant by the Employer; and (ii) any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of the Participants Employment.
In addition, by signing below, the Participant further acknowledges having read and specifically and expressly approved the terms and conditions in this Award Agreement, in which the following is clearly described and established: (i) participation in the Plan does not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company and its Affiliates are not responsible for any decrease in the value of the underlying Common Shares.
Policy Statement. The invitation the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend and discontinue the Plan at any time, pursuant to the terms of the Plan, without any liability to the Participant.
The Company, with registered offices at 345 Park Avenue, New York, NY 10154, U.S., is solely responsible for the administration of the Plan and participation in the Plan. The acquisition of Common Shares does not, in any way, establish an employment relationship between the Participant and the Company since the Participant is participating in the Plan on a solely commercial basis and his or her sole employer is BX Real Estate Mexico Sociedad Civil.
Finally, the Participant does not reserve any action or right to bring any claim against the Company for any compensation or damages as a result of participation in the Plan and he or she therefore grants a full and broad release to the Employer, the Company and its other Affiliates with respect to any claim that may arise under or in relation to the Plan.
Plan Document Acknowledgment. By accepting the Deferred Units, the Participant acknowledges having received a copy of the Plan, having reviewed the Plan and this Award Agreement in their entirety and fully understood and accepted all provisions of the Plan and the Award Agreement.
B-8
Spanish Translation
Reconocimiento de la Ley Laboral: Estas disposiciones complementan la Sección 16 del cuerpo principal de este Convenio del Otorgamiento y la Sección 1 del Apéndice A:
Al aceptar las Unidades Diferidas, el Participante reconoce y acepta que: (i) las Unidades Diferidas no se encuentran relacionadas con el salario ni con otras prestaciones contractuales concedidas al Participante por parte del Empleador; y (ii) cualquier modificación del Plan o la terminación del mismo no constituye un cambio o impedimento de los términos y condiciones del Empleo del Participante.
Adicionalmente, al firmar el presente documento, el Participante reconoce que ha leído y que aprueba específica y expresamente los términos y condiciones contenidos en este Convenio del Otorgamiento, en los cuales se encuentran claramente descrito y establecido lo siguiente: (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en el mismo es ofrecida por la Sociedad de forma enteramente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Sociedad, así como sus Afiliadas no son responsables por cualquier disminución en el valor de las Unidades Comunes subyacentes.
Declaración de Política. La invitación por parte de la Sociedad bajo el Plan es unilateral y discrecional y, por lo tanto, la Sociedad se reserva el derecho absoluto de modificar y discontinuar el Plan en cualquier tiempo, de acuerdo con los términos del Plan, sin ninguna responsabilidad hacia el Participante.
La Sociedad, con oficinas registradas ubicadas en 345 Park Avenue, New York, NY, 10154, EE.UU., es la única responsable por la administración del Plan y de la participación en el mismo. La adquisición de Unidades Comunes no establece de forma alguna, una relación laboral entre el Participante y la Sociedad, ya que la participación en el Plan es completamente comercial y el único patrón es BX Real Estate México Sociedad Civil.
Finalmente, el Participante declara que no se reserva ninguna acción o derecho para interponer una demanda en contra de la Sociedad por compensación, daño o perjuicio alguno como resultado de su participación en el Plan y, por lo tanto, otorga el más amplio finiquito al Empleador, la Sociedad y sus otras Afiliadas con respecto a cualquier demanda que pudiera originarse en virtud del Plan.
Reconocimiento dede Documentos del Plan. Al aceptar las Unidades Diferidas, el Participante reconoce que ha recibido una copia del Plan, que ha revisado el Plan y este Convenio del Otorgamiento en su totalidad, y que los ha entendido completamente y acepta todas las disposiciones contenidas en el Pan y en el Convenio del Otorgamiento.
B-9
SINGAPORE
Terms and Conditions
Restrictions on Sale and Transferability. The Participant hereby agrees that any Common Shares acquired will not be offered for sale in Singapore prior to the six month anniversary of the Date of Grant, unless such sale or offer is made pursuant to the exemptions under Part XIII Division 1 Subdivision (4) (other than section 280) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (SFA), or pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Notifications
Securities Law Information. The grant is being made pursuant to the Qualifying Person exemption under section 273(1)(f) of the SFA, on which basis it is exempt from the prospectus and registration requirements under the SFA and is not made to the Participant with a view to the Deferred Units or the Common Shares being subsequently offered for sale to any other party. The Plan has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore.
Chief Executive Officer/Director Notification Obligation. If the Participant is the chief executive officer (CEO) or a director, associate director or shadow director of a Singaporean affiliate of the Company, the Participant is subject to certain notification requirements under the Singapore Companies Act. Directors and CEOs must notify the Singaporean affiliate in writing of an interest (e.g., Deferred Units, Common Shares) in the Company or any related affiliates within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest (e.g., when the Common Shares are sold), or (iii) becoming a director / CEO.
SOUTH KOREA
Notifications
Foreign Asset/Account Reporting Information. Korean residents must declare all foreign financial accounts (i.e., non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the monthly balance of such accounts exceeds KRW 500 million (or an equivalent amount in foreign currency) on any month-end during a calendar year. The Participant should consult with his or her personal tax advisor to determine the Participants personal reporting obligations.
SPAIN
Terms and Conditions
No Entitlement or Claims for Compensation. By accepting the grant, the Participant consents to participation in the Plan and acknowledges that he or she has received a copy of the Plan document.
B-10
The Participant understands that the Company has unilaterally, gratuitously and in its sole discretion decided to grant Deferred Units under the Plan to individuals who may be employees throughout the world. The decision is limited and entered into based upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any Affiliate, on an ongoing basis, other than as expressly set forth in this Award Agreement. Consequently, the Participant understands that the grant is given on the assumption and condition that the Deferred Units or underlying Common Shares acquired upon vesting shall not become part of any employment or other service contract (whether with the Company or any Affiliate) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, the Participant understands that this grant would not be made to the Participant but for the assumptions and conditions referred to above; thus, the Participant acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of Deferred Units shall be null and void.
Further, the vesting of the Deferred Units is expressly conditioned on the Participants continued and active rendering of service, such that if the Participants Employment terminates the Deferred Units cease vesting immediately effective on the date of the Participants termination of Employment, unless otherwise provided in this Award Agreement. This will be the case if the Participants Employment terminates for any reason including, but not limited to, resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause (i.e., subject to a despido improcedente), individual or collective dismissal on objective grounds, whether adjudged or recognized to be with or without cause, material modification of the terms of employment under Article 41 of the Workers Statute, relocation under Article 40 of the Workers Statute, and/or Article 50 of the Workers Statute, unilateral withdrawal by the Employer and under Article 10.3 of the Royal Decree 1382/1985.
Notifications
Securities Law Information. No offer of securities to the public, as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of Deferred Units under the Plan. The Plan and this Award Agreement, have not been nor will they be registered with the Comisión Nacional del Mercado de Valores, and do not constitute a public offering prospectus.
Exchange Control Information. The Participant must declare the acquisition, ownership and disposition of Common Shares to the Spanish Dirección General de Comercio e Inversiones (DGCI) of the Ministry of Economy and Competitiveness on a Form D-6. Generally, the declaration must be made in January for Common Shares owned as of December 31 of the prior year and/or Common Shares acquired or disposed of during the prior year; however, if the value of the Common Shares acquired or disposed of or the amount of the sale proceeds exceeds 1,502,530 (or if the Participant holds 10% or more of the share capital of the Company or other such amount that would entitle the Participant to join the Board), the declaration must be filed within one month of the acquisition or disposition, as applicable.
B-11
In addition, the Participant may be required to electronically declare to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including Common Shares acquired under the Plan), and any transactions with non-Spanish residents (including any payments of Common Shares made pursuant to the Plan), depending on the balances in such accounts together with the value of such instruments as of December 31 of the relevant year, or the volume of transactions with non-Spanish residents during the relevant year.
The Participant should consult with his or her personal advisor to determine the Participants obligations in this respect.
Foreign Asset/Account Reporting Information. To the extent that the Participant holds rights or assets (e.g., cash or Common Shares held in a bank or brokerage account) outside of Spain with a value in excess of 50,000 per type of right or asset as of December 31 each year (or at any time during the year in which the Participant sells or disposes of such right or asset), the Participant is required to report information on such rights and assets on his or her tax return for such year. After such rights or assets are initially reported, the reporting obligation will only apply for subsequent years if the value of any previously-reported rights or assets increases by more than 20,000 of if the Participant sells or otherwise disposes of previously-reported rights or assets. The Participant should consult with his or her personal tax advisor to ensure compliance with applicable reporting requirements.
UNITED ARAB EMIRATES
Terms and Conditions
Nature of Grant. This provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
The Participant acknowledges that the Deferred Units and related benefits do not constitute a component of the Participants wages for any legal purpose. Therefore, the Deferred Units and related benefits will not be included and/or considered for purposes of calculating any and all labor benefits, such as social insurance contributions and/or any other labor-related amounts which may be payable.
Notifications
Securities Law Information. The grant of Deferred Units is being offered only to eligible individuals under the Plan and is in the nature of providing equity incentives to employees in the United Arab Emirates. The Plan and the Award Agreement are intended for distribution only to such employees and must not be delivered to, or relied on by, any other person. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying the documents in connection with the Plan. Neither the Ministry of Economy nor the Dubai Department of Economic Development have approved the Plan or this Award Agreement nor taken steps to verify the information set out therein, and have no responsibility for such documents.
B-12
UNITED KINGDOM
Terms and Conditions
Withholding. The following provisions further supplement Section 13 of this Award Agreement:
Without limitation to any provision of the Award Agreement, the Participant agrees that the Participant is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or the Employer or by Her Majestys Revenue & Customs (HRMC) (or any other tax authority or any other relevant authority). The Participant also agrees to indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay on the Participants behalf to HMRC (or any other tax authority or any other relevant authority).
Notwithstanding the foregoing, in the event that the Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities Exchange Act of 1934, as amended), the Participant understands that he or she may not be able to indemnify the Company for the amount of any income tax not collected from or paid by the Participant, in case the indemnification could be considered to be a loan. In this case, the income tax not collected or paid may constitute a benefit to the Participant on which additional income tax and National Insurance contributions may be payable. The Participant understands that he or she will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company or the Employer, as applicable, for the value of any National Insurance contributions due on this additional benefit, which may also be recovered from the Participant at any time by any of the means referred to in this Section 13.
B-13
Exhibit 10.104
THE BLACKSTONE GROUP INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
BX EQUITY AWARD
DEFERRED UNIT AGREEMENT
Participant: |
Date of Grant: |
|
Number of Deferred Units: |
1. Grant of Deferred Units. The Company hereby grants the number of deferred units (the Deferred Units) listed above to the Participant (the Award), effective as of the Date of Grant on the terms and conditions hereinafter set forth in this agreement, including any appendix, exhibit or addendum hereto (the Award Agreement). This grant is made pursuant to the terms of The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan (as amended, modified or supplemented from time to time, the Plan), which is incorporated herein by reference and made a part of this Award Agreement. Each Deferred Unit represents the unfunded, unsecured right of the Participant to receive a Common Share on the delivery date(s) specified in Section 4 hereof.
2. Definitions. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan.
(a) Cause shall mean the occurrence or existence of any of the following as determined fairly, reasonably, on an informed basis and in good faith by the Administrator: (i) any breach by the Participant of any provision of the Non-Competition, Non-Solicitation and Confidentiality Agreements to which the Participant is a party, (ii) any material breach of any rules or regulations of the Company or its Affiliates applicable to the Participant, (iii) Participants deliberate failure to perform his or her duties to the Company or its Affiliates, (iv) Participants committing to or engaging in any conduct or behavior that is or may be harmful to the Company or its Affiliates in a material way; (v) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Company or its Affiliates; or (vi) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that the Participant individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) the Participants ability to function as an employee of the Company or its Affiliates, taking into account the employment required of the Participant and the nature of the Companys or its Affiliates business or (B) the business of the Company or its Affiliates.
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(b) Common Share shall mean a share of the Companys Common Stock.
(c) Employment Agreement shall mean the Contracting Employee Agreement (including all schedules and exhibits thereto), entered into between the Blackstone Administrative Services Partnership L.P. (or any of its or the Companys Affiliates) and the Participant or, if the Participant is or becomes a Senior Managing Director, the Senior Managing Director Agreement (including all schedules and exhibits thereto), entered into between the Blackstone Holdings I L.P. (or any of its or the Companys Affiliates) and the Participant.
(d) Holdback Delivery Date shall mean the second anniversary with respect to each Vesting Date (each such date, a Scheduled Release Date); provided, however, that if the Participant terminates Employment prior to any such Scheduled Release Date, then the Holdback Delivery Date applicable to all remaining Retention Units shall be the second anniversary of the date of the Participants termination of Employment.
(e) Involuntary Termination shall mean the Company and its Affiliates have terminated the Employment of the Participant without Cause (and in the absence of the Participants Disability).
(f) Non-Competition, Non Solicitation and Confidentiality Agreement shall mean any agreement, and any attachments or schedules thereto, entered into by and between the Participant and the Company or its Affiliates, pursuant to which the Participant has agreed, among other things, to certain restrictions relating to non-competition, non-solicitation and/or confidentiality, in order to protect the business of the Company and its Affiliates.
(g) Qualifying Event shall mean, during the Participants Employment with the Company and its Affiliates, the Participants death, Disability or Retirement.
(h) Retirement shall mean the retirement of the Participant from his or her Employment with the Company and its Affiliates after (i) the Participant has reached age 65 and has at least five full years of service with the Company and its Affiliates, or (ii) (x) the Participants age plus years of service with the Company and its Affiliates totals at least 65, (y) the Participant has reached age 55, and (z) the Participant has had a minimum of five years of service.
(i) Retention Percentage shall mean 25% of the vested units until the corresponding Holdback Delivery Date for each Vesting Date.
(j) Retention Units shall mean, on any given date, the Deferred Units that have become Vested Deferred Units and which are retained by the Company (along with the underlying Common Shares) in accordance with Section 4 hereof.
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(k) Vested Deferred Units shall mean those Deferred Units which have become vested pursuant to Section 3 or otherwise pursuant to the Plan.
(l) Vesting Dates shall mean each of the First Vesting Date, the Second Vesting Date, the Third Vesting Date, the Fourth Vesting Date and the Fifth Vesting Date.
(m) Vesting Reference Date shall mean .
3. Vesting.
(a) Vesting General. Subject to the Participants continued Employment with the Company and its Affiliates, the Award shall vest on the applicable Vesting Dates as follows:
(i) % of the Deferred Units granted hereunder shall vest on the first anniversary of the Vesting Reference Date (the First Vesting Date); an additional % of the Deferred Units granted hereunder shall vest on the second anniversary of the Vesting Reference Date (the Second Vesting Date); an additional % of the Deferred Units granted hereunder shall vest on the third anniversary of the Vesting Reference Date (the Third Vesting Date); an additional % of the Deferred Units granted hereunder shall vest on the fourth anniversary of the Vesting Reference Date (the Fourth Vesting Date); and the remaining % of the Deferred Units granted hereunder shall vest on the fifth anniversary of the Vesting Reference Date (the Fifth Vesting Date).
(b) Vesting Qualifying Events.
(i) Death or Disability. Upon the occurrence of a Qualifying Event on account of the death or Disability of the Participant, 100% of the Deferred Units granted hereunder shall vest (to the extent not previously vested) upon the date of such event.
(ii) Involuntary Termination. Upon the occurrence of a Qualifying Event on account of the Involuntary Termination of the Participant, 100% of the Deferred Units granted hereunder shall vest (to the extent not previously vested) upon the date of such event.
(iii) Retirement. Upon the occurrence of a Qualifying Event on account of the Retirement of the Participant, (I) 50% of the then unvested Deferred Units shall remain eligible to vest upon each of the following scheduled Vesting Dates, and (II) all other unvested Deferred Units shall be cancelled immediately and the Participant shall automatically forfeit all rights with respect to such unvested Deferred Units upon the date of such event; provided that if, following the Participants Retirement, the Participant breaches any
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applicable provision of the Non-Competition, Non-Solicitation and Confidentiality Agreement to which the Participant is a party or otherwise engages in any Competitive Activity, the Participants Deferred Units which remain undelivered as of the date of such violation or engagement in Competitive Activity, as determined by the Administrator in its sole discretion, will be forfeited without payment. As a pre-condition to a Participants right to continued vesting and delivery of the Deferred Units following Retirement, the Administrator may require the Participant to certify in writing prior to each scheduled Vesting Date that the Participant has not breached any applicable provisions of the Participants Non-Competition, Non-Solicitation and Confidentiality Agreement or otherwise engaged in any Competitive Activity.
(c) Vesting Terminations. Except as otherwise set forth in Section 3(b), in the event the Participants Employment with the Company and its Affiliates is terminated for any reason, the portion of the Award that has not yet vested pursuant to Section 3(a) or 3(b) hereof (or otherwise pursuant to the Plan) shall be cancelled immediately and the Participant shall automatically forfeit all rights with respect to such portion of the Award as of the date of such termination.
4. Delivery.
(a) Delivery General. The Company shall, on each applicable Vesting Date set forth below, deliver to the Participant the Common Shares underlying the Deferred Units which vest and become Vested Deferred Units on such date; provided that on each such Vesting Date, the Company shall retain, as Retention Units (and withhold the corresponding underlying Common Shares with respect thereto) a number of Vested Deferred Units so that the aggregate number of Retention Units at such time (expressed as a percentage of the aggregate number of Deferred Units awarded to the Participant which have vested as of such date) is equal to the applicable Retention Percentage. The Common Shares underlying Retention Units will be delivered to the Participant as and when, and to the extent that, the number of Retention Units at any time exceeds the applicable Retention Percentage, as illustrated in the table below, with the Common Shares underlying any remaining Retention Units delivered to the Participant upon the corresponding Holdback Delivery Date.
Annual
Vesting |
Cumulative
Vesting |
Retention
Percentage |
Annual
Delivery Percentage |
|||||||||||||
First Vesting Date |
||||||||||||||||
Second Vesting Date |
||||||||||||||||
Third Vesting Date |
||||||||||||||||
Fourth Vesting Date |
||||||||||||||||
Fifth Vesting Date |
30 | % | 100 | % | 25 | % | 22.5 | % |
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(b) Delivery Qualifying Events.
(i) Death or Disability. Upon the occurrence of a Qualifying Event on account of the Participants death or Disability, the Company shall, within a reasonable time following the date of such event, deliver Common Shares to the Participant in respect of 100% of the Deferred Units which vest and become Vested Deferred Units on such Date and any then outstanding Retention Units (to the extent not previously delivered).
(ii) Involuntary Termination. Upon the occurrence of a Qualifying Event on account of the Participants Involuntary Termination, the Company shall, within a reasonable time following the date of such event, deliver Common Shares to the Participant in respect of 100% of the Deferred Units which vest and become Vested Deferred Units on that date; provided that the Company will retain such Retention Units as are necessary to meet the Retention Percentage until such requirement lapses.
(iii) Retirement. Following the occurrence of a Qualifying Event on account of the Participants Retirement, the Company shall, on each subsequent Vesting Date, deliver Common Shares to the Participant in respect of those Deferred Units which vest and become Vested Deferred Units as of each following Vesting Date by application of Section 3(b)(ii); provided that the Company will retain such Retention Units as are necessary to meet the Retention Percentage until such requirement lapses upon the corresponding Holdback Delivery Date(s).
(c) Delivery Terminations. Except as otherwise set forth in Section 4(b) or 4(d), in the event the Participants Employment with the Company and its Affiliates is terminated for any reason, the Company shall (i) within a reasonable time of such termination, deliver Common Shares to the Participant in respect of the Vested Deferred Units as of such date that are not Retention Units (if any), and (ii) deliver Common Shares to the Participant in respect of the Retention Units in accordance with the delivery schedule set forth in Section 4(a), until the corresponding Holdback Delivery Date(s), at which point the remaining Retention Units shall be delivered to the Participant.
(d) Forfeiture Cause Termination or Breach of Restrictive Covenants. Notwithstanding anything to the contrary herein, upon the termination of the Participants Employment by the Company or any of its Affiliates for Cause or upon the Participants breach of any of the restrictive covenants contained within an applicable Non-Competition, Non-Solicitation and Confidentiality Agreement, all outstanding Deferred Units (whether or not vested) and Retention Units shall immediately terminate and be forfeited without consideration and no further Common Shares with respect of the Award shall be delivered to the Participant or to
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the Participants legal representative, beneficiaries or heirs. Without limiting the foregoing, any Common Shares that have previously been delivered to the Participant or the Participants legal representative, beneficiaries or heirs pursuant to the Award and which are still held by the Participant or the Participants legal representative, or beneficiaries or heirs as of the date of such termination for Cause or such breach, shall also immediately terminate and be forfeited without consideration.
5. Change in Control. Notwithstanding anything to the contrary herein, in the event of a Change in Control, (i) 100% of the Deferred Units granted hereunder which then remain outstanding shall vest (to the extent not previously vested) upon the date of such Change in Control, and (ii) the Company shall deliver Common Shares to the Participant at the same times as would otherwise be delivered pursuant to Section 4(a); provided, however, if such Change in Control (or any subsequent Change in Control) would constitute a change in the ownership or effective control or a change in the ownership of a substantial portion of the assets of the Company (in each case within the meaning of Section 409A of the Code), the Company shall instead deliver Common Shares to the Participant in respect of 100% of the then outstanding Deferred Units and Retention Units (to the extent not previously delivered) on or within 10 days following such Change in Control.
6. Distributions. If on any date while Deferred Units are outstanding hereunder any cash distributions shall be paid on the Common Shares (whether vested or unvested), the Participant shall be entitled to receive, as of such distribution date, a cash payment equal to the product of (a) the number of Deferred Units, if any, held by the Participant as of the related distribution date, multiplied by (b) the per Common Share amount of such cash distribution.
7. Adjustments Upon Certain Events. The Administrator shall, in its sole discretion, make certain substitutions or adjustments to any Retention Units or Deferred Units subject to this Award Agreement pursuant to Section 9 of the Plan.
8. No Right to Continued Employment. The granting of the Deferred Units evidenced by this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Employment of the Participant and shall not lessen or affect the Companys or its Affiliates right to terminate the Employment of such Participant.
9. No Rights of a Holder of Common Shares. Except as otherwise provided herein, the Participant shall not have any rights as a holder of Common Shares until such Common Shares have been issued or transferred to the Participant.
10. Restrictions. Any Common Shares issued or transferred to the Participant pursuant to Section 4 of this Award Agreement shall be subject to such stop transfer orders and other restrictions as the Administrator may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Common Shares are listed and any applicable U.S. or non-U.S. federal, state or local laws, and the Administrator may cause a notation or notations to be entered into the books and records of the Company to make appropriate reference to such restrictions.
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11. Transferability. Unless otherwise determined or approved by the Administrator, no Deferred Units or Retention Units may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance not permitted by this Section 11 shall be void and unenforceable against the Company or any Affiliate.
12. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing (including electronically) and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by electronic means, by courier service, by fax, or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12):
(a) If to the Company, to:
The Blackstone Group Inc.
345 Park Avenue
New York, New York, 10154
Attention: Chief Legal Officer
Fax:
(b) If to the Participant, to the address appearing in the personnel records of the Company or any Affiliate.
13. Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold from any issuance or transfer due under this Award Agreement or under the Plan or from any compensation or other amount owing to the Participant, applicable withholding taxes with respect to any issuance or transfer under this Award Agreement or under the Plan and to take such action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes, including, without limitation, by reducing the number of Common Shares that would otherwise be transferred or issued pursuant to this Award Agreement. Without limiting the foregoing, the Administrator may, from time to time, permit the Participant to make arrangements prior to any vesting date or delivery date described herein to pay the applicable withholding taxes by remitting a check prior to the applicable vesting or delivery date.
14. Choice of Law. The interpretation, performance and enforcement of this Award Agreement shall be governed by the law of the State of New York.
15. Subject to Plan. By entering into this Award Agreement, the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. All Deferred Units, Retention Units and Common Shares issued or transferred with respect thereof are subject to the Plan. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
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16. Nature of Grant. By accepting the Deferred Units, the Participant acknowledges, understands and agrees that:
(a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;
(b) the grant of Deferred Units is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Deferred Units or benefits in lieu of Deferred Units, even if Deferred Units have been granted in the past;
(c) all decisions with respect to future Deferred Units or other grants, if any, will be at the sole discretion of the Company;
(d) the Participant is voluntarily participating in the Plan;
(e) the Deferred Units and the underlying Common Shares, and the income from and value of same, are not intended to replace any pension rights or compensation;
(f) unless otherwise agreed with the Company, the Deferred Units and the underlying Common Shares, and the income from and value of same, are not granted as consideration for, or in connection with, the service the Participant may provide as a director of any affiliate of the Company;
(g) the Deferred Units and the underlying Common Shares, and the income from and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, indemnification, pension or retirement or welfare benefits or similar payments, benefits or rights of any kind;
(h) the future value of the underlying Common Shares is unknown, indeterminable and cannot be predicted with certainty;
(i) no claim or entitlement to compensation or damages shall arise from the forfeiture of the Deferred Units resulting from the Participants termination of Employment (for any reason whatsoever, whether or not later found to be invalid or in breach of employment or other laws in the jurisdiction where the Participant is employed or otherwise rendering services, or the terms of his or her employment or service agreement, if any); and
(j) for purposes of the Deferred Units, the Participants Employment will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of his or her employment or service agreement, if any) as of the date that is the earlier of (i) the date he or she is no longer actively providing services to the Company or an Affiliate or (ii) the date he or she receives notice of termination of Employment from the Company or Affiliate, and unless otherwise expressly provided in this Award Agreement or
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determined by the Company, the Participants right to vest in the Deferred Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., the Participants period of service would not include any contractual notice period or any period of garden leave or similar period mandated under employment laws in the jurisdiction where the Participant is employed or otherwise rendering services, or the terms of his or her employment or service agreement, if any). The Administrator will have exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Deferred Units.
17. Non-U.S. and Country Specific Provisions. If the Participant resides in a country outside the United States or its territories, or is otherwise subject to the laws of a country other than the United States, the Deferred Units and any underlying Common Shares acquired under the Plan shall be subject to the additional terms and conditions set forth in Appendix A and to the terms and conditions set forth in Appendix B for the Participants country, if any. Moreover, if the Participant relocates outside the United States or its territories, the terms and conditions set forth in Appendices A and B will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.
18. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participants participation in the Plan, or his or her acquisition or sale of the underlying Common Shares. The Participant should consult with his or her own tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
19. Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
20. Waiver. The Participant acknowledges that a waiver by the Company of breach of any provision of this Award Agreement shall not operate or be construed as a waiver of any other provision of the Award Agreement, or of any subsequent breach of this Award Agreement.
21. Entire Agreement. This Award Agreement contains the entire understanding between the parties with respect to the Deferred Units granted hereunder (including, without limitation, the vesting and delivery schedules described herein), and hereby replaces and supersedes any prior communication and arrangements between the Participant and the Company or any of its Affiliates with respect to the matters set forth herein and any other pre-existing economic or other arrangements between the Participant and the Company or any of its Affiliates.
22. Modifications. Notwithstanding any provision of this Award Agreement to the contrary, the Company reserves the right to modify the terms and conditions of this Award Agreement, including, without limitation, the timing or circumstances of the issuance or transfer of Common Shares to the Participant hereunder, to the extent such modification is determined by the Company to be necessary or advisable for legal or administrative reasons or to preserve the intended deferral of income recognition with respect to the Deferred Units and Retention Units until the issuance or transfer of Common Shares hereunder.
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23. Electronic Delivery and Acceptance. The Company, in its sole discretion, may decide to deliver any documents related to current or future participation in the Plan by electronic means. Electronic delivery of a document to the Participant may be via a Company e-mail system, an online or electronic system established and maintained by a third party administrator of the Plan, or by reference to a location on a Company intranet site to which the Participant has access. The Participant hereby agrees, to the fullest extent permitted by law, to accept electronic delivery of any documents that the Company desires or may be required to deliver (including, but not limited to, prospectuses, prospectus supplements, grant or award notifications and agreements, account statements, annual and quarterly reports, and all other agreements, forms and communications), in connection with this and any other prior or future incentive award or program offered by the Company and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
24. Signature in Counterparts. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
[Signatures on next page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement.
THE BLACKSTONE GROUP INC.
|
Name:
|
THE PARTICIPANT1
|
Name: |
1 |
To the extent that the Company has established, either itself or through a third-party plan administrator, the ability to accept this award electronically, such acceptance shall constitute Participants signature hereof. |
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APPENDIX A
to
THE BLACKSTONE GROUP INC.
DEFERRED UNIT AGREEMENT
ADDITIONAL TERMS AND CONDITIONS
FOR PARTICIPANTS OUTSIDE THE UNITED STATES
The following terms and conditions (where applicable) apply to Participants who reside outside the United States or its territories or who are otherwise subject to the laws of a country other than the United States.
1. Nature of Grant. The follow provision supplements Section 16 of the main body of this Award Agreement:
Neither the Company nor any Affiliate shall be liable for any foreign exchange rate fluctuation between the Participants local currency and the U.S. Dollar that may affect the value of the Deferred Units or any amounts due to the Participant pursuant to the settlement of the Deferred Units (in Common Shares or cash) or subsequent sale of underlying Common Shares acquired upon settlement.
2. Withholding. The following provisions supplement Section 13 of the main body of this Award Agreement:
The Participant acknowledges and agrees that, regardless of any action taken by the Company or the Affiliate employing the Participant (the Employer), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Deferred Units and the Participants participation in the Plan (Tax-Related Items) is and remains the Participants sole responsibility and may exceed the amount, if any, withheld by the Company or the Employer. The Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Deferred Units, including, but not limited to, the grant, vesting or settlement of the Deferred Units, the subsequent sale of Common Shares acquired pursuant to such settlement and the receipt of any distributions; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Deferred Units to reduce or eliminate the Participants liability for Tax-Related Items or achieve any particular tax result. If the Participant is subject to Tax-Related Items in more than one jurisdiction, the Participant acknowledges and agrees that the Company or Affiliate, as applicable, may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
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In addition to the withholding methods specified above in this Section 13, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to
all Tax-Related Items by (i) withholding from the proceeds of the sale of Common Shares acquired at vesting of the Deferred Units through a voluntary sale or through a mandatory sale arranged by the Company (on the Participants behalf pursuant to this authorization without further consent) or (ii) any other method of withholding determined by the Company and permitted by applicable law.
Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Participants jurisdiction(s), in which case the Participant may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Common Shares. If the obligation for Tax-Related Items is satisfied by withholding Common Shares that would otherwise be transferred or issued pursuant to this Award Agreement, for tax purposes, the Participant is deemed to have been issued the full number of Common Shares subject to the vested Deferred Units, notwithstanding that a number of the Common Shares are held back solely for the purpose of paying the Tax-Related Items.
The Company may refuse to issue the Common Shares or deliver the proceeds of the sale of Common Shares if the Participant fails to comply with his or her obligations in connection with the Tax-Related Items.
3. Data Privacy. For the purposes of complying with the General Data Protection Regulation (EU) 2016/679, relevant Participants will be provided with separate information in respect of the collection and processing of their personal data. For the purposes of the remainder of this clause 3 (of Appendix A) only, Participant means a Participant who resides outside of the European Union.
The Participant hereby explicitly, voluntarily and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Participants personal data as described in this Award Agreement and any other Plan materials by and among, as applicable, the Employer, the Company and its Affiliates for the exclusive purpose of implementing, administering and managing the Participants participation in the Plan.
The Participant understands that the Company and the Employer may hold certain personal information about the Participant, including, but not limited to, the Participants name, home address, email address and telephone number, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Common Shares or directorships held in the Company, details of any entitlement to Common Shares awarded, canceled, exercised, vested, unvested or outstanding in the Participants favor, for the purpose of implementing, administering and managing the Plan (Data).
The Participant understands that Data will be transferred to Merrill Lynch, Pierce, Fenner & Smith Incorporated or such other stock plan providers as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. The Participant understands that those receiving the Data may be located in the United States or elsewhere, and that the applicable
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country (e.g., the United States) may have different data privacy laws and protections than the Participants country. The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Participant authorizes the Company, and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Participants participation in the Plan. The Participant understands that Data will be held as long as is necessary to implement, administer and manage the Participants participation in the Plan, as determined by the Company in its sole discretion. The Participant understands that he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, the Participant understands that he or she is providing the consents herein on a purely voluntary basis. If the Participant does not consent, or later seeks to revoke his or her consent, the Participants employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant Deferred Units or other equity awards under the Plan, or administer or maintain such awards. Therefore, the Participant understands that refusing or withdrawing his or her consent may affect the Participants ability to participate in the Plan. For more information on the consequences of the Participants refusal to consent or withdrawal of consent, the Participant understands that he or she may contact his or her local human resources representative.
4. Language. The Participant acknowledges that he or she is sufficiently proficient in English to understand the terms and conditions of the Award Agreement. Furthermore, if the Participant receives this Award Agreement or any other document related to the Plan translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
5. Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that the Participant may be subject to insider trading and/or market abuse laws based on the exchange on which the Common Shares are listed and in applicable jurisdictions including the United States and the Participants country or the brokers country, if different, which may affect the Participants ability to accept, acquire, sell or otherwise dispose of Common Shares or rights to Common Shares (e.g., Deferred Units) or rights linked to the value of Common Shares, during such times as the Participant is considered to have inside information regarding the Company (as defined by the laws or regulations in the applicable jurisdictions). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant may be prohibited from (i) disclosing the inside information to any third party including colleagues of the Participant (other than on a need to know basis) and (ii) tipping third parties or causing them otherwise to buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company. The Participant is responsible for ensuring compliance with any applicable restrictions and should consult with his or her personal legal advisor on this matter.
A-3
6. Foreign Asset/Account, Exchange Control and Tax Reporting. The Participant acknowledges that, depending on his or her country, the Participant may be subject to foreign asset and/or account reporting requirements and exchange control regulations which may affect his or her ability to acquire or hold Common Shares under the Plan or cash received from participating in the Plan (including from any distributions received or sale proceeds arising from the sale of Common Shares) in a brokerage or bank account outside of the Participants country. The Participant may also be required to repatriate sale proceeds or funds received as a result of his or her participation in the Plan to his or her country through a designated bank and/or broker within a certain time after receipt. In addition, the Participant may be subject to tax payments and/or other reporting obligations in connection with any income realized under the Plan, and or from the sale of the underlying Common Shares. The Participant acknowledges that he or she is responsible for ensuring compliance with any such requirements and is advised to consult with his or her personal legal advisors, as applicable, to ensure compliance.
A-4
APPENDIX B
TO
THE BLACKSTONE GROUP INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
SPECIAL EQUITY AWARD
DEFERRED UNIT AGREEMENT
COUNTRY-SPECIFIC TERMS AND CONDITIONS
Terms and Conditions
This Appendix B includes additional terms and conditions applicable to Participants in the countries below. These terms and conditions are in addition to, or, if so indicated, in place of, the terms and conditions set forth in the Award Agreement, including Appendix A. If the Participant is a citizen (or is considered as such for local purposes) of a country other than the country in which he or she is currently residing and/or working, or if he or she relocates to another country after the Deferred Units are granted, the Company will, in its discretion, determine the extent to which the terms and conditions contained herein will be applicable to the Participant.
Notifications
This Appendix B also includes information regarding securities law, exchange controls and certain other issues of which the Participant should be aware with respect to participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of January 2019. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Participant not rely on the information contained herein as the only source of information relating to the consequences of his or her participation in the Plan because the information may be out of date by the time he or she vests in the Deferred Units or sells Common Shares acquired under the Plan.
In addition, the information contained herein is general in nature and may not apply to the Participants particular situation, and the Company is not in a position to assure the Participant of a particular result. Accordingly, the Participant should seek appropriate professional advice as to how the relevant laws in his or her country may apply to the Participants particular situation.
Finally, if the Participant is a citizen or resident (or is considered as such for local law purposes) of a country other than the country in which he or she is currently residing and/or working, or if the Participant relocates to another country after the Deferred Units are granted, the notifications contained herein may not be applicable to him or her in the same manner.
B-1
AUSTRALIA
Notifications
Tax Information. Subdivision 83A-C of the Income Tax Assessment Act 1997 applies to the Deferred Units granted in accordance with the terms and conditions of the Plan and this Award Agreement (subject to the requirements of the Income Tax Assessment Act 1997).
BRAZIL
Terms and Conditions
Compliance with Law. By accepting the Deferred Units, the Participant acknowledges that he or she will comply with applicable Brazilian laws and pay any applicable Tax-Related Items associated with the vesting and settlement of the Deferred Units and the sale of Common Shares under the Plan.
Nature of Grant. The follow provision supplements Section 16 of the main
body of this Award Agreement and Section 1 of
Appendix A:
By accepting the Deferred Units, the Participant acknowledges that (i) the grant of Deferred Units is not part of normal or expected compensation for any reason whatsoever and will have no impact on Participants Employment or service relationship, (ii) the underlying Common Shares will be issued to the Participant only if the vesting conditions are met, and (iii) the value of the underlying Common Shares is not fixed and may increase or decrease without compensation to the Participant.
Notifications
Foreign Asset/Account Reporting Information. If the Participant is resident or domiciled in Brazil, the Participant will be required to submit an annual declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal to or greater than US$100,000. Assets and rights that must be reported include Common Shares acquired under the Plan. Foreign individuals holding Brazilian visas are considered Brazilian residents for purposes of this reporting requirement and must declare at least the assets held abroad that were acquired subsequent to the date of admittance as a resident of Brazil.
CANADA
Terms and Conditions
Delivery. Notwithstanding any discretion contained in Section 8 of the Plan, the grant of Deferred Units does not provide any right for the Participant to receive a cash payment and as provided in Section 4 of the main body of this Award Agreement, Vested Deferred Units will be satisfied through the delivery of Common Shares.
B-2
Termination of Employment. The following provision replaces Section 16(j) of the main body of this Award Agreement:
(j) for purposes of the Deferred Units, the Participants Employment will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of his or her employment or service agreement, if any) as of the date that is the earlier of (i) the date of the Participants termination of Employment or (ii) the date the Participant is no longer actively providing service (regardless of any notice period or period of pay in lieu of such notice required under applicable Canadian employment laws (including, but not limited to statutory law, regulatory law and/or common law)). The Administrator will have exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the Deferred Units (including whether the Participant may still be considered to be providing services while on a leave of absence).
Notifications
Securities Law Information. The Participant is permitted to sell Common Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the sale of the Common Shares takes place outside of Canada through the facilities of a stock exchange on which the Common Shares are listed (i.e., the New York Stock Exchange).
Foreign Asset/Account Reporting Information. Canadian resident Participants are required to report any specified foreign property on form T1135 (Foreign Income Verification Statement) if the total value of the specified foreign property exceeds C$ 100,000 at any time in the year. Specified foreign property includes Common Shares acquired under the Plan, and may include the Deferred Units. The Deferred Units must be reported (generally at a nil cost) if the C$ 100,000 cost threshold is exceeded because of other foreign property the Participant holds. If Common Shares are acquired, their cost generally is the adjusted cost base (ACB) of the Common Shares. The ACB ordinarily would equal the fair market value of the Common Shares at the time of acquisition, but if the Participant owns other Common Shares, this ACB may have to be averaged with the ACB of the other Common Shares. The form must be filed by April 30 of the following year. The Participant should consult with his or her personal legal advisor to ensure compliance with applicable reporting obligations.
CHINA
The following Terms and Conditions apply to Participants that are subject to the exchange control restrictions and regulations in the Peoples Republic of China (China), including the requirements imposed by the State Administration of Foreign Exchange (SAFE), as determined by the Company in its sole discretion.
B-3
Terms and Conditions
Delivery. Notwithstanding Section 4 of this Award Agreement, delivery of Common Shares is conditioned upon the Company securing and maintaining all necessary approvals from SAFE and any other applicable government entities in China to permit the operation of the Plan in China, as determined by the Company it its sole discretion. If or to the extent the Company is unable to complete the registration or maintain the registration, no Common Shares subject to the Deferred Units for which a registration cannot be completed or maintained shall be issued. In this case, the Company retains the discretion to settle any Deferred Units in cash paid through local payroll in an amount equal to the fair market value of the Common Shares on the settlement date, subject to the Deferred Units less any Tax-Related Items.
Exchange Control Restrictions. Exchange control restrictions apply to the remittance of funds into and out of China. In the event that Common Shares are delivered upon settlement of the Deferred Units, the Participant understands and agrees that, pursuant to local exchange control requirements, he or she will be required to immediately repatriate the cash proceeds from the sale of Common Shares and any cash distributions paid on such Common Shares to China. The Participant further understands that, under local law, such repatriation of cash proceeds may need to be effectuated through a special exchange control account established by the Company, the Employer or any other Affiliate, and the Participant hereby consents and agrees that any proceeds from the sale of Common Shares or any cash distributions paid on such Common Shares may be transferred to such special account prior to being delivered to the Participant.
The proceeds may be paid to the Participant in U.S. dollars or local currency at the Companys discretion. In the event the proceeds are paid to the Participant in U.S. dollars, he or she understands that he or she will be required to set up a U.S. dollar bank account in China and provide the bank account details to the Employer and/or the Company so that the proceeds may be deposited into this account. If the proceeds are paid to the Participant in local currency, the Company is under no obligation to secure any particular exchange conversion rate and/or conversion date and the Company may face delays in converting the proceeds to local currency due to exchange control restrictions. The Participant agrees to bear any currency fluctuation risk between the time the Common Shares are sold or distributions are received and the time the proceeds are distributed through any such special exchange account. The Participant further agrees to comply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchange control requirements in China.
DENMARK
Terms and Conditions
Exclusion from Termination Indemnities and Other Benefits. This provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
In accepting the Deferred Units, the Participant acknowledges that he or she understands and agrees that this grant relates to future services to be performed and is not a bonus or compensation for past services.
B-4
Notifications
Foreign Asset/Account Reporting Information. The prior rules that required the Participant to submit certain forms (Declaration V and Declaration K) to the Danish Tax Authorities reporting Common Shares held in foreign bank or brokerage accounts and deposit accounts with a foreign bank were eliminated as of January 1, 2019. Please note, however, that the Participant is required to report the foreign bank/brokerage accounts and their deposits and Common Shares held in foreign bank or brokerage accounts on his or her personal tax return under the section on foreign affairs and income.
FRANCE
Terms and Conditions
Language Consent. By Accepting the Award Agreement providing for the terms and conditions of the Participants grant, the Participant confirms having read and understood the documents relating to this grant (the Plan and the Award Agreement) which were provided in the English language. The Participant accepts the terms of these documents accordingly.
Consentement relatif à la réception d informations en langue anglaise. En acceptant le Contrat d Attribution décrivant les termes et conditions de l attribution, le Participant confirme ainsi avoir lu et compris les documents relatifs à cette attribution (le Plan et le Contrat d Attribution) qui ont été communiqués en langue anglaise. Le Participant accepte les termes de ces documents en connaissance de cause.
Notifications
Foreign Asset/Account Reporting Information. The Participant may hold Common Shares acquired under the Plan provided the Participant declares all foreign bank and brokerage accounts (including accounts opened or closed during the tax year) in the Participants tax return. Failure to comply could trigger significant penalties.
GERMANY
Notifications
Exchange Control Information. Cross-border payments in excess of 12,500 must be reported monthly to the German Federal Bank (Bundesbank). In the event that the Participant makes or receives a payment in excess of this amount, he or she must report the payment to Bundesbank electronically using the General Statistics Reporting Portal (Allgemeines Meldeportal Statistik) available via Bundesbanks website (www.bundesbank.de).
Foreign Asset/Account Reporting Information. German residents holding Common Shares must notify their local tax office of the acquisition of Common Shares when they file their tax returns for the relevant year if the value of the Common Shares exceeds 150,000 or in the unlikely event that the resident holds Common Shares exceeding 10% of the Companys capital.
B-5
HONG KONG
Terms and Conditions
Restrictions on Sale of Common Shares. Any Common Shares received at vesting are accepted as a personal investment. In the event the Deferred Units vest and Common Shares are issued to the Participant within six months of the Date of Grant, the Participant agrees that he or she will not sell any Common Shares acquired prior to the six month anniversary of the Date of Grant.
Notifications
Securities Law Information. WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. The Participant is advised to exercise caution in relation to the offer. If the Participant is in any doubt about any of the contents of this document, he or she should obtain independent professional advice. Neither the grant of the Deferred Units nor the issuance of underlying Common Shares upon vesting of the RSUs constitutes a public offering of securities under Hong Kong law and is available only to employees of the Company and any Affiliate. This Award Agreement, the Plan and other incidental communication materials distributed in connection with the Deferred Units (i) have not been prepared in accordance with and are not intended to constitute a prospectus for a public offering of securities under the applicable securities legislation in Hong Kong and (ii) are intended only for the personal use of each eligible employee of the Company or any Affiliate and may not be distributed to any other person.
INDIA
Notifications
Exchange Control Information. Indian residents must repatriate any proceeds from the sale of Common Shares acquired under the Plan or the receipt of any distributions paid on such Common Shares to India and convert the proceeds into local currency within a certain period after receipt (90 days for sale proceeds and 180 days for distributions, or such other period of time as may be required under applicable regulations). The Participant will receive a foreign inward remittance certificate (FIRC) from the bank where he or she deposits the foreign currency. The Participant should maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation. The Participant acknowledges that it is the Participants sole responsibility to comply with the applicable exchange control laws in India.
Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including Common Shares held outside of India) in their annual tax returns. The Participant is responsible for complying with this reporting obligation and should consult with his or her personal tax advisor in this regard.
B-6
IRELAND
Terms and Conditions
Nature of Grant. The following provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
By accepting the Deferred Units, the Participant acknowledges that any Deferred Units granted to him or her by the Company are separate from any compensation or employment benefits offered to the Participant by the Employer, and that the Deferred Units shall not be considered employment-related compensation for any purposes, including any severance or termination payment made to the Participant by the Employer as a result of his or her termination of Employment.
ITALY
Terms and Conditions
Grant Terms Acknowledgment. By accepting the Deferred Units, the Participant acknowledges having received and reviewed the Plan and this Award Agreement, in their entirety and fully understands and accepts all provisions of the Plan and this Award Agreement. The Participant further acknowledges that he or she has specifically read and expressly approves the following provisions of this Award Agreement: Sections 3, 4, 13, 14, 22 and section 3 of Appendix A.
Notifications
Foreign Asset/Account Reporting Information. Italian residents who, at any time during the fiscal year, hold foreign financial assets (including cash and Common Shares) which may generate income taxable in Italy are required to report these assets on their annual tax returns (UNICO Form, RW Schedule) for the year during which the assets are held, or on a special form if no tax return is due. These reporting obligations will also apply to Italian residents who are the beneficial owners of foreign financial assets under Italian money laundering provisions. The Participant should consult his or her personal tax advisor to ensure compliance with applicable reporting obligations.
JAPAN
Notifications
Foreign Asset/Account Reporting Information. The Participant is required to report the details of any assets held outside of Japan (including Common Shares acquired under the Plan as of December 31), to the extent such assets have a total net fair market value exceeding ¥50 million. Such report will be due by March 15 of the following year. The Participant should consult with his or her personal tax advisor to determine if the reporting obligation applies to his or her personal situation.
B-7
LUXEMBOURG
There are no country-specific provisions.
MEXICO
Labor Law Acknowledgment. These provisions supplement Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
By accepting the Deferred Units, the Participant understands and agrees that: (i) the Deferred Units are not related to the salary or other contractual benefits granted to the Participant by the Employer; and (ii) any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of the Participants Employment.
In addition, by signing below, the Participant further acknowledges having read and specifically and expressly approved the terms and conditions in this Award Agreement, in which the following is clearly described and established: (i) participation in the Plan does not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company and its Affiliates are not responsible for any decrease in the value of the underlying Common Shares.
Policy Statement. The invitation the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend and discontinue the Plan at any time, pursuant to the terms of the Plan, without any liability to the Participant.
The Company, with registered offices at 345 Park Avenue, New York, NY 10154, U.S., is solely responsible for the administration of the Plan and participation in the Plan. The acquisition of Common Shares does not, in any way, establish an employment relationship between the Participant and the Company since the Participant is participating in the Plan on a solely commercial basis and his or her sole employer is BX Real Estate Mexico Sociedad Civil.
Finally, the Participant does not reserve any action or right to bring any claim against the Company for any compensation or damages as a result of participation in the Plan and he or she therefore grants a full and broad release to the Employer, the Company and its other Affiliates with respect to any claim that may arise under or in relation to the Plan.
Plan Document Acknowledgment. By accepting the Deferred Units, the Participant acknowledges having received a copy of the Plan, having reviewed the Plan and this Award Agreement in their entirety and fully understood and accepted all provisions of the Plan and the Award Agreement.
B-8
Spanish Translation
Reconocimiento de la Ley Laboral: Estas disposiciones complementan la Sección 16 del cuerpo principal de este Convenio del Otorgamiento y la Sección 1 del Apéndice A:
Al aceptar las Unidades Diferidas, el Participante reconoce y acepta que: (i) las Unidades Diferidas no se encuentran relacionadas con el salario ni con otras prestaciones contractuales concedidas al Participante por parte del Empleador; y (ii) cualquier modificación del Plan o la terminación del mismo no constituye un cambio o impedimento de los términos y condiciones del Empleo del Participante.
Adicionalmente, al firmar el presente documento, el Participante reconoce que ha leído y que aprueba específica y expresamente los términos y condiciones contenidos en este Convenio del Otorgamiento, en los cuales se encuentran claramente descrito y establecido lo siguiente: (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en el mismo es ofrecida por la Sociedad de forma enteramente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Sociedad, así como sus Afiliadas no son responsables por cualquier disminución en el valor de las Unidades Comunes subyacentes.
Declaración de Política. La invitación por parte de la Sociedad bajo el Plan es unilateral y discrecional y, por lo tanto, la Sociedad se reserva el derecho absoluto de modificar y discontinuar el Plan en cualquier tiempo, de acuerdo con los términos del Plan, sin ninguna responsabilidad hacia el Participante.
La Sociedad, con oficinas registradas ubicadas en 345 Park Avenue, New York, NY, 10154, EE.UU., es la única responsable por la administración del Plan y de la participación en el mismo. La adquisición de Unidades Comunes no establece de forma alguna, una relación laboral entre el Participante y la Sociedad, ya que la participación en el Plan es completamente comercial y el único patrón es BX Real Estate México Sociedad Civil.
Finalmente, el Participante declara que no se reserva ninguna acción o derecho para interponer una demanda en contra de la Sociedad por compensación, daño o perjuicio alguno como resultado de su participación en el Plan y, por lo tanto, otorga el más amplio finiquito al Empleador, la Sociedad y sus otras Afiliadas con respecto a cualquier demanda que pudiera originarse en virtud del Plan.
Reconocimiento dede Documentos del Plan. Al aceptar las Unidades Diferidas, el Participante reconoce que ha recibido una copia del Plan, que ha revisado el Plan y este Convenio del Otorgamiento en su totalidad, y que los ha entendido completamente y acepta todas las disposiciones contenidas en el Pan y en el Convenio del Otorgamiento.
B-9
SINGAPORE
Terms and Conditions
Restrictions on Sale and Transferability. The Participant hereby agrees that any Common Shares acquired will not be offered for sale in Singapore prior to the six month anniversary of the Date of Grant, unless such sale or offer is made pursuant to the exemptions under Part XIII Division 1 Subdivision (4) (other than section 280) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (SFA), or pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Notifications
Securities Law Information. The grant is being made pursuant to the Qualifying Person exemption under section 273(1)(f) of the SFA, on which basis it is exempt from the prospectus and registration requirements under the SFA and is not made to the Participant with a view to the Deferred Units or the Common Shares being subsequently offered for sale to any other party. The Plan has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore.
Chief Executive Officer/Director Notification Obligation. If the Participant is the chief executive officer (CEO) or a director, associate director or shadow director of a Singaporean affiliate of the Company, the Participant is subject to certain notification requirements under the Singapore Companies Act. Directors and CEOs must notify the Singaporean affiliate in writing of an interest (e.g., Deferred Units, Common Shares) in the Company or any related affiliates within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest (e.g., when the Common Shares are sold), or (iii) becoming a director / CEO.
SOUTH KOREA
Notifications
Foreign Asset/Account Reporting Information. Korean residents must declare all foreign financial accounts (i.e., non-Korean bank accounts, brokerage accounts, etc.) to the Korean tax authority and file a report with respect to such accounts if the monthly balance of such accounts exceeds KRW 500 million (or an equivalent amount in foreign currency) on any month-end during a calendar year. The Participant should consult with his or her personal tax advisor to determine the Participants personal reporting obligations.
SPAIN
Terms and Conditions
No Entitlement or Claims for Compensation. By accepting the grant, the Participant consents to participation in the Plan and acknowledges that he or she has received a copy of the Plan document.
B-10
The Participant understands that the Company has unilaterally, gratuitously and in its sole discretion decided to grant Deferred Units under the Plan to individuals who may be employees throughout the world. The decision is limited and entered into based upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any Affiliate, on an ongoing basis, other than as expressly set forth in this Award Agreement. Consequently, the Participant understands that the grant is given on the assumption and condition that the Deferred Units or underlying Common Shares acquired upon vesting shall not become part of any employment or other service contract (whether with the Company or any Affiliate) and shall not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever. Furthermore, the Participant understands that this grant would not be made to the Participant but for the assumptions and conditions referred to above; thus, the Participant acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of Deferred Units shall be null and void.
Further, the vesting of the Deferred Units is expressly conditioned on the Participants continued and active rendering of service, such that if the Participants Employment terminates the Deferred Units cease vesting immediately effective on the date of the Participants termination of Employment, unless otherwise provided in this Award Agreement. This will be the case if the Participants Employment terminates for any reason including, but not limited to, resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause (i.e., subject to a despido improcedente), individual or collective dismissal on objective grounds, whether adjudged or recognized to be with or without cause, material modification of the terms of employment under Article 41 of the Workers Statute, relocation under Article 40 of the Workers Statute, and/or Article 50 of the Workers Statute, unilateral withdrawal by the Employer and under Article 10.3 of the Royal Decree 1382/1985.
Notifications
Securities Law Information. No offer of securities to the public, as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of Deferred Units under the Plan. The Plan and this Award Agreement, have not been nor will they be registered with the Comisión Nacional del Mercado de Valores, and do not constitute a public offering prospectus.
Exchange Control Information. The Participant must declare the acquisition, ownership and disposition of Common Shares to the Spanish Dirección General de Comercio e Inversiones (DGCI) of the Ministry of Economy and Competitiveness on a Form D-6. Generally, the declaration must be made in January for Common Shares owned as of December 31 of the prior year and/or Common Shares acquired or disposed of during the prior year; however, if the value of the Common Shares acquired or disposed of or the amount of the sale proceeds exceeds 1,502,530 (or if the Participant holds 10% or more of the share capital of the Company or other such amount that would entitle the Participant to join the Board), the declaration must be filed within one month of the acquisition or disposition, as applicable.
B-11
In addition, the Participant may be required to electronically declare to the Bank of Spain any foreign accounts (including brokerage accounts held abroad), any foreign instruments (including Common Shares acquired under the Plan), and any transactions with non-Spanish residents (including any payments of Common Shares made pursuant to the Plan), depending on the balances in such accounts together with the value of such instruments as of December 31 of the relevant year, or the volume of transactions with non-Spanish residents during the relevant year.
The Participant should consult with his or her personal advisor to determine the Participants obligations in this respect.
Foreign Asset/Account Reporting Information. To the extent that the Participant holds rights or assets (e.g., cash or Common Shares held in a bank or brokerage account) outside of Spain with a value in excess of 50,000 per type of right or asset as of December 31 each year (or at any time during the year in which the Participant sells or disposes of such right or asset), the Participant is required to report information on such rights and assets on his or her tax return for such year. After such rights or assets are initially reported, the reporting obligation will only apply for subsequent years if the value of any previously-reported rights or assets increases by more than 20,000 of if the Participant sells or otherwise disposes of previously-reported rights or assets. The Participant should consult with his or her personal tax advisor to ensure compliance with applicable reporting requirements.
UNITED ARAB EMIRATES
Terms and Conditions
Nature of Grant. This provision supplements Section 16 of the main body of this Award Agreement and Section 1 of Appendix A:
The Participant acknowledges that the Deferred Units and related benefits do not constitute a component of the Participants wages for any legal purpose. Therefore, the Deferred Units and related benefits will not be included and/or considered for purposes of calculating any and all labor benefits, such as social insurance contributions and/or any other labor-related amounts which may be payable.
Notifications
Securities Law Information. The grant of Deferred Units is being offered only to eligible individuals under the Plan and is in the nature of providing equity incentives to employees in the United Arab Emirates. The Plan and the Award Agreement are intended for distribution only to such employees and must not be delivered to, or relied on by, any other person. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying the documents in connection with the Plan. Neither the Ministry of Economy nor the Dubai Department of Economic Development have approved the Plan or this Award Agreement nor taken steps to verify the information set out therein, and have no responsibility for such documents.
B-12
UNITED KINGDOM
Terms and Conditions
Withholding. The following provisions further supplement Section 13 of this Award Agreement:
Without limitation to any provision of the Award Agreement, the Participant agrees that the Participant is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or the Employer or by Her Majestys Revenue & Customs (HRMC) (or any other tax authority or any other relevant authority). The Participant also agrees to indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay on the Participants behalf to HMRC (or any other tax authority or any other relevant authority).
Notwithstanding the foregoing, in the event that the Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities Exchange Act of 1934, as amended), the Participant understands that he or she may not be able to indemnify the Company for the amount of any income tax not collected from or paid by the Participant, in case the indemnification could be considered to be a loan. In this case, the income tax not collected or paid may constitute a benefit to the Participant on which additional income tax and National Insurance contributions may be payable. The Participant understands that he or she will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company or the Employer, as applicable, for the value of any National Insurance contributions due on this additional benefit, which may also be recovered from the Participant at any time by any of the means referred to in this Section 13.
B-13
Exhibit 10.105
Execution Version
HIGHLY CONFIDENTIAL & TRADE SECRET
BREA EUROPE VI (CAYMAN) L.P.
AMENDED AND RESTATED
AGREEMENT OF EXEMPTED LIMITED PARTNERSHIP
DATED FEBRUARY 26, 2020
EFFECTIVE MAY 8, 2019
THE EXEMPTED LIMITED PARTNERSHIP INTERESTS (THE INTERESTS) OF BREA EUROPE VI (CAYMAN) L.P. (THE PARTNERSHIP) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), THE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, CHARGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, THE EXEMPTED LIMITED PARTNERSHIP LAW OF THE CAYMAN ISLANDS, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED AGREEMENT OF EXEMPTED LIMITED PARTNERSHIP. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED AGREEMENT OF EXEMPTED LIMITED PARTNERSHIP. THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
Page | ||||||
ARTICLE I DEFINITIONS |
1 | |||||
Section 1.1. |
Definitions | 1 | ||||
Section 1.2. |
Terms Generally | 17 | ||||
ARTICLE II GENERAL PROVISIONS |
17 | |||||
Section 2.1. |
General Partner, Limited Partner, Special Partner | 17 | ||||
Section 2.2. |
Formation; Name; Foreign Jurisdictions | 18 | ||||
Section 2.3. |
Term | 18 | ||||
Section 2.4. |
Purposes; Powers | 18 | ||||
Section 2.5. |
Place of Business | 21 | ||||
Section 2.6. |
Withdrawal of Initial Limited Partner | 21 | ||||
ARTICLE III MANAGEMENT |
21 | |||||
Section 3.1. |
General Partner | 21 | ||||
Section 3.2. |
Partner Voting, etc. | 22 | ||||
Section 3.3. |
Management | 22 | ||||
Section 3.4. |
Responsibilities of Partners | 25 | ||||
Section 3.5. |
Exculpation and Indemnification | 25 | ||||
Section 3.6. |
Representations of Partners | 27 | ||||
Section 3.7. |
Tax Representation and Further Assurances | 28 | ||||
ARTICLE IV CAPITAL OF THE PARTNERSHIP |
29 | |||||
Section 4.1. |
Capital Contributions by Partners | 29 | ||||
Section 4.2. |
Interest | 37 | ||||
Section 4.3. |
Withdrawals of Capital | 37 | ||||
ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
37 | |||||
Section 5.1. |
General Accounting Matters | 37 | ||||
Section 5.2. |
GP-Related Capital Accounts | 39 | ||||
Section 5.3. |
GP-Related Profit Sharing Percentages | 39 | ||||
Section 5.4. |
Allocations of GP-Related Net Income (Loss) | 40 | ||||
Section 5.5. |
Liability of Partners | 41 | ||||
Section 5.6. |
Liability of General Partner | 42 | ||||
Section 5.7. |
Repurchase Rights, etc. | 42 | ||||
Section 5.8. |
Distributions | 42 | ||||
Section 5.9. |
Business Expenses | 49 | ||||
Section 5.10. |
Tax Capital Accounts; Tax Allocations | 50 | ||||
ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF PARTNERSHIP INTERESTS; TERMINATION |
50 | |||||
Section 6.1. |
Additional Partners | 50 | ||||
Section 6.2. |
Withdrawal of Partners | 52 | ||||
Section 6.3. |
GP-Related Partner Interests Not Transferable | 53 |
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TABLE OF CONTENTS
(continued)
Page | ||||||
Section 6.4. |
Consequences upon Withdrawal of a Partner | 53 | ||||
Section 6.5. |
Satisfaction and Discharge of a Withdrawn Partners GP-Related Partner Interests | 54 | ||||
Section 6.6. |
Dissolution of the Partnership | 60 | ||||
Section 6.7. |
Certain Tax Matters | 60 | ||||
Section 6.8. |
Special Basis Adjustments | 61 | ||||
ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS |
61 | |||||
Section 7.1. |
Capital Commitment Interests, etc. | 61 | ||||
Section 7.2. |
Capital Commitment Capital Accounts | 63 | ||||
Section 7.3. |
Allocations | 63 | ||||
Section 7.4. |
Distributions | 64 | ||||
Section 7.5. |
Valuations | 68 | ||||
Section 7.6. |
Disposition Election | 68 | ||||
Section 7.7. |
Capital Commitment Special Distribution Election | 69 | ||||
ARTICLE VIII WITHDRAWAL, ADMISSION OF NEW PARTNERS |
69 | |||||
Section 8.1. |
Partner Withdrawal; Repurchase of Capital Commitment Interests | 69 | ||||
Section 8.2. |
Transfer of Partners Capital Commitment Interest | 75 | ||||
Section 8.3. |
Compliance with Law | 75 | ||||
ARTICLE IX DISSOLUTION |
75 | |||||
Section 9.1. |
Dissolution | 75 | ||||
Section 9.2. |
Final Distribution | 76 | ||||
Section 9.3. |
Amounts Reserved Related to Capital Commitment Partner Interests | 76 | ||||
ARTICLE X MISCELLANEOUS |
77 | |||||
Section 10.1. |
Submission to Jurisdiction; Waiver of Jury Trial | 77 | ||||
Section 10.2. |
Ownership and Use of the Blackstone Name | 78 | ||||
Section 10.3. |
Written Consent | 79 | ||||
Section 10.4. |
Letter Agreements; Schedules | 79 | ||||
Section 10.5. |
Governing Law; Separability of Provisions | 79 | ||||
Section 10.6. |
Successors and Assigns; Third Party Beneficiaries | 79 | ||||
Section 10.7. |
Confidentiality | 80 | ||||
Section 10.8. |
Notices | 81 | ||||
Section 10.9. |
Counterparts | 81 | ||||
Section 10.10. |
Power of Attorney | 81 | ||||
Section 10.11. |
Partners Will | 82 | ||||
Section 10.12. |
Cumulative Remedies | 82 | ||||
Section 10.13. |
Legal Fees | 82 | ||||
Section 10.14. |
Entire Agreement; Modifications | 82 | ||||
Section 10.15. |
Effective Date | 82 | ||||
Section 10.16. |
Third Party Rights | 82 |
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BREA EUROPE VI (CAYMAN) L.P.
AMENDED AND RESTATED AGREEMENT OF EXEMPTED LIMITED PARTNERSHIP, dated February 26, 2020, and effective May 8, 2019, of BREA Europe VI (Cayman) L.P., a Cayman Islands exempted limited partnership (the Partnership), by and between Blackstone Real Estate Associates Europe (Delaware) VI L.L.C., a Delaware limited liability company, as general partner of the Partnership (the General Partner), Mapcal Limited, as initial limited partner (the Initial Limited Partner), the limited partners listed as Limited Partners in the books and records of the Partnership, and such other persons that are admitted to the Partnership as partners after the date hereof in accordance herewith.
W I T N E S S E T H
WHEREAS, the General Partner, as general partner, and Mapcal Limited, as initial limited partner, entered into an Exempted Limited Partnership Agreement dated September 25, 2018 (the Original Agreement) and formed an exempted limited partnership under the laws of the Cayman Islands under the name of BREA Europe VI (Cayman) L.P.; and
WHEREAS, the parties hereto desire to enter into this Amended and Restated Agreement of Exempted Limited Partnership, effective on May 8, 2019, and hereby amend and restate the Original Agreement in its entirety and reflect the withdrawal of the Initial Limited Partner, in each case effective on May 8, 2019;
NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties hereto agree that the Original Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:
Adjustment Amount has the meaning set forth in Section 8.1(b)(ii).
Advancing Party has the meaning set forth in Section 7.1(c).
Affiliate when used with reference to another person means any person (other than the Partnership), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires, endowment funds, estate planning vehicles (including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts associated with or established by Blackstone and/or its affiliates, partners and current and/or former employees and/or related persons.
Agreement means this Amended and Restated Limited Agreement of Exempted Limited Partnership, as it may be further amended, supplemented, restated or otherwise modified from time to time.
Applicable Collateral Percentage with respect to any Firm Collateral or Special Firm Collateral, has the meaning set forth in the books and records of the Partnership with respect thereto.
Associates Europe VI means Blackstone Real Estate Associates Europe VI L.P., a Cayman Islands exempted limited partnership and the general partner of BREP Europe VI, or any other entity that serves as the general partner, special general partner or managing member of a vehicle indicated in the definition of BREP Europe VI.
Associates Europe VI LP Agreement means the limited partnership agreement, dated as of the date set forth therein, of Associates Europe VI, as it may be amended, supplemented, restated or otherwise modified from time to time.
Bankruptcy means, with respect to any person, the occurrence of any of the following events: (i) the filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment or decree unstayed and in effect for a period of 60 consecutive days.
BE Agreement means the limited partnership agreement, limited liability company agreement or other governing document of any limited partnership, limited liability company or other entity referred to in the definition of Blackstone Entity, as such limited partnership agreement, limited liability company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing document may be further amended, supplemented, restated or otherwise modified from time to time.
BE Investment means any direct or indirect investment by any Blackstone Entity.
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Blackstone means, collectively, The Blackstone Group Inc., a Delaware corporation, and any successor thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any Blackstone-sponsored fund (or any affiliate thereof that is not otherwise an Affiliate of The Blackstone Group Inc.)).
Blackstone Capital Commitment has the meaning set forth in the BREP Europe VI Partnership Agreement.
Blackstone Entity means any partnership, limited liability company or other entity (excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of The Blackstone Group Inc., as designated by the General Partner in its sole discretion.
BREP Europe VI means (i) Blackstone Real Estate Partners Europe VI SCSp, a special limited partnership (société en commandite spéciale) established under the laws of the Grand Duchy of Luxembourg, (ii) any other Alternative Investment Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) of this definition), (iii) any other investment vehicle established pursuant to Article II of the respective partnership agreements for any of the partnerships referred to in clause (i) of this definition, and (iv) any other limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which Associates Europe VI or the Partnership serves, directly or indirectly, as the general partner, special general partner, manager, managing member or in a similar capacity.
BREP Europe VI Agreements is the collective reference to the BREP Europe VI Partnership Agreement and any governing agreement of any of the partnerships or other entities referred to in clauses (ii), (iii) or (iv) of the definition of BREP Europe VI.
BREP Europe VI Partnership Agreement means the partnership agreements of the limited partnerships named in clause (i) of the definition of BREP Europe VI, as they may be amended, supplemented, restated or otherwise modified from time to time.
Business Day means any day other than a Saturday, Sunday or other day on which banks are authorized or required by law to be closed in New York, New York.
Capital Commitment Associates Europe VI Partner Interest means the interest of the Partnership, if any, as a limited partner of Associates Europe VI with respect to any Capital Commitment BREP Europe VI Interest that may be held by Associates Europe VI.
Capital Commitment BREP Europe VI Commitment means the Capital Commitment (as defined in the BREP Europe VI Partnership Agreement), if any, of the Partnership or Associates Europe VI to BREP Europe VI that relates solely to the Capital Commitment BREP Europe VI Interest, if any.
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Capital Commitment BREP Europe VI Interest means the Interest (as defined in the BREP Europe VI Partnership Agreement), if any, of the Partnership or Associates Europe VI as a capital partner in BREP Europe VI.
Capital Commitment BREP Europe VI Investment means the Partnerships interest in a specific investment of BREP Europe VI, which interest may be held by the Partnership (i) through the Partnerships direct interest in BREP Europe VI through the Partnerships Capital Commitment BREP Europe VI Interest, if the Partnership holds the Capital Commitment BREP Europe VI Interest, or (ii) through the Partnerships interest in Associates Europe VI and Associates Europe VIs interest in BREP Europe VI through Associates Europe VIs Capital Commitment BREP Europe VI Interest, if Associates Europe VI holds the Capital Commitment BREP Europe VI Interest.
Capital Commitment Capital Account means, with respect to each Capital Commitment Investment for each Partner, the account maintained for such Partner to which are credited such Partners contributions to the Partnership with respect to such Capital Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3 with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to such Partner and any net losses allocated to such Partner with respect to such Capital Commitment Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such Capital Commitment Investment pursuant to Section 7.3.
Capital Commitment Class A Interest has the meaning set forth in Section 7.4(f).
Capital Commitment Class B Interest has the meaning set forth in Section 7.4(f).
Capital Commitment Defaulting Party has the meaning set forth in Section 7.4(g)(ii)(A).
Capital Commitment Deficiency Contribution has the meaning set forth in Section 7.4(g)(ii)(A).
Capital Commitment Disposable Investment has the meaning set forth in Section 7.4(f).
Capital Commitment Distributions means, with respect to each Capital Commitment Investment, all amounts of distributions received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BREP Europe VI Interest, if any, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such Capital Commitment Investment as it may determine in good faith is appropriate.
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Capital Commitment Giveback Amount has the meaning set forth in Section 7.4(g)(i).
Capital Commitment Interest means the interest of a Partner in a specific Capital Commitment Investment as provided herein.
Capital Commitment Investment means any Capital Commitment BREP Europe VI Investment, but shall exclude any GP-Related Investment.
Capital Commitment Liquidating Share means, with respect to each Capital Commitment Investment, in the case of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) as of the close of business on the effective date of dissolution.
Capital Commitment Net Income (Loss) means, with respect to each Capital Commitment Investment, all amounts of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto.
Capital Commitment Partner Carried Interest means, with respect to any Partner, the aggregate amount of distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to carried interest. Capital Commitment Partner Carried Interest includes any amount initially received by an Affiliate of the Partnership from any fund (including BREP Europe VI, any similar funds formed after the date hereof, and any Other Blackstone Funds (as defined in the BREP Europe VI Partnership Agreement), whether or not in existence as of the date hereof) to which such Affiliate serves as general partner (or in another similar capacity) that exceeds such Affiliates pro rata share of distributions from such fund based upon capital contributions thereto (or the capital contributions to make the investment of such fund giving rise to such carried interest).
Capital Commitment Partner Interest means a Partners exempted limited partnership interest in the Partnership which relates (i) to any Capital Commitment BREP Europe VI Interest held by the Partnership or (ii) through the Partnership and Associates Europe VI, to any Capital Commitment BREP Europe VI Interest that may be held by Associates Europe VI.
Capital Commitment Profit Sharing Percentage means, with respect to each Capital Commitment Investment, the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the Partnership.
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Capital Commitment Recontribution Amount has the meaning set forth in Section 7.4(g)(i).
Capital Commitment-Related Capital Contributions has the meaning set forth in Section 7.1(b).
Capital Commitment-Related Commitment means, with respect to any Partner, such Partners commitment to the Partnership relating to such Partners Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partners Commitment Agreement or SMD Agreement, if any.
Capital Commitment Special Distribution has the meaning set forth in Section 7.7(a).
Capital Commitment Value has the meaning set forth in Section 7.5.
Carried Interest means (i) Carried Interest Distributions as defined in the BREP Europe VI Partnership Agreement, and (ii) any other carried interest distribution to a Fund GP pursuant to any BREP Europe VI Agreement. In the case of each of (i) and (ii) above, except as determined by the General Partner, the amount shall not be less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto (in each case which the General Partner may allocate among all or any portion of the GP-Related Investments as it determines in good faith is appropriate).
Carried Interest Give Back Percentage means, for any Partner or Withdrawn Partner, subject to Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by (B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of determining any Carried Interest Give Back Percentage hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity interest owners of the Partnership or any of the Other Fund GPs or their Affiliates.
Carried Interest Sharing Percentage means, with respect to each GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
Cause means the occurrence or existence of any of the following with respect to any Partner, as determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-competition agreement, (x) any material breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such
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Partners deliberate failure to perform his or her duties to the Partnership or any of its Affiliates, or (z) such Partners committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that in the case of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a Notice of Breach) within 15 days after the General Partner becomes aware of such action and such Partner fails to cure such breach, failure to perform or conduct or behavior within 15 days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional 15 days, as shall be reasonably required for such cure; provided, that such Partner is diligently pursuing such cure); (ii) any act of actual fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates; or (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony (under U.S. law or its equivalent in any jurisdiction) or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partners ability to function as a Partner of the Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an event described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.
Clawback Adjustment Amount has the meaning set forth in Section 5.8(e)(ii)(C).
Clawback Amount means the Clawback Amount and the Interim Clawback Amount, each as defined in the BREP Europe VI Partnership Agreement, and any other clawback amount payable to the limited partners of BREP Europe VI or to BREP Europe VI pursuant to any BREP Europe VI Agreement, as applicable.
Clawback Provisions means paragraphs 4.2.9 and 9.2.7 of the BREP Europe VI Partnership Agreement and any other similar provisions in any other BREP Europe VI Agreement existing heretofore or hereafter entered into.
Code means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
Commitment Agreements means the agreements between the Partnership or an Affiliate thereof and Partners, pursuant to which each Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the Partnership and the relevant Partner.
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Contingent means subject to repurchase rights and/or other requirements.
The term control when used with reference to any person means the power to direct the management and policies of such person, directly or indirectly, by or through stock or other equity interest ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one or more other persons by or through stock or other equity interest ownership, agency or otherwise; and the terms controlling and controlled shall have meanings correlative to the foregoing.
Controlled Entity when used with reference to another person means any person controlled by such other person.
Covered Person has the meaning set forth in Section 3.5(a).
Deceased Partner means any Partner or Withdrawn Partner who has died or who suffers from Incompetence. For purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such Deceased Partners interest in the Partnership.
Default Interest Rate means the lower of (i) the sum of (a) the Prime Rate and (b) 5%, or (ii) the highest rate of interest permitted under applicable law.
Delaware Arbitration Act has the meaning set forth in Section 10.1(d).
Estate Planning Vehicle has the meaning set forth in Section 6.3(a).
Excess Holdback has the meaning set forth in Section 4.1(d)(v)(A).
Excess Holdback Percentage has the meaning set forth in Section 4.1(d)(v)(A).
Excess Tax-Related Amount has the meaning set forth in Section 5.8(e).
Existing Partner means any Partner who is neither a Retaining Withdrawn Partner nor a Deceased Partner.
Final Event means the death, Total Disability, Incompetence, Bankruptcy, liquidation, dissolution or Withdrawal from the Partnership of any person who is a Partner.
Firm Advances has the meaning set forth in Section 7.1(c).
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Firm Collateral means a Partners or Withdrawn Partners interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been pledged, charged or made available to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the Partnerships books and records; provided, that for all purposes hereof (and any other agreement (e.g., the Trust Agreement) that incorporates the meaning of the term Firm Collateral by reference), references to Firm Collateral shall include Special Firm Collateral, excluding references to Firm Collateral in Section 4.1(d)(v) and Section 4.1(d)(viii).
Firm Collateral Realization has the meaning set forth in Section 4.1(d)(v)(B).
Fiscal Year means a calendar year, or any other period chosen by the General Partner.
Fund GP means the Partnership (only with respect to the GP-Related BREP Europe VI Interest) and the Other Fund GPs.
GAAP means U.S. generally accepted accounting principles.
General Partner means Blackstone Real Estate Associates Europe (Delaware) VI L.L.C. and any person admitted to the Partnership as an additional or substitute general partner of the Partnership in accordance with the provisions of this Agreement and the Partnership Act (until such time as such person ceases to be a general partner of the Partnership as provided herein or in the Partnership Act).
Giveback Amount(s) means the amount(s) payable by partners of BREP Europe VI pursuant to the Giveback Provisions.
Giveback Provisions means paragraph 3.4.3 of the BREP Europe VI Partnership Agreement and any other similar provisions in any other BREP Europe VI Agreement existing heretofore or hereafter entered into.
Governmental Entity has the meaning set forth in Section 10.7(b).
GP-Related Associates Europe VI Interest means the interest of the Partnership as a limited partner of Associates Europe VI with respect to the GP-Related BREP Europe VI Interest, but does not include any interest of the Partnership in Associates Europe VI with respect to any Capital Commitment BREP Europe VI Interest that may be held by Associates Europe VI.
GP-Related BREP Europe VI Interest means the interest of Associates Europe VI in BREP Europe VI as general partner of BREP Europe VI, excluding any Capital Commitment BREP Europe VI Interest that may be held by Associates Europe VI.
GP-Related BREP Europe VI Investment means the Partnerships indirect interest in Associates Europe VIs indirect interest in an Investment (for purposes of this definition, as defined in the BREP Europe VI Partnership Agreement) in Associates Europe VIs capacity as general partner and/or special general partner of BREP Europe VI, but does not include any Capital Commitment Investment.
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GP-Related Capital Account has the meaning set forth in Section 5.2(a).
GP-Related Capital Contributions has the meaning set forth in Section 4.1(a).
GP-Related Class A Interest has the meaning set forth in Section 5.8(a)(ii).
GP-Related Class B Interest has the meaning set forth in Section 5.8(a)(ii).
GP-Related Commitment, with respect to any Partner, means such Partners commitment to the Partnership relating to such Partners GP-Related Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partners Commitment Agreement or SMD Agreement, if any.
GP-Related Defaulting Party has the meaning set forth in Section 5.8(d)(ii)(A).
GP-Related Deficiency Contribution has the meaning set forth in Section 5.8(d)(ii)(A).
GP-Related Disposable Investment has the meaning set forth in Section 5.8(a)(ii).
GP-Related Giveback Amount has the meaning set forth in Section 5.8(d)(i)(A).
GP-Related Investment means any investment (direct or indirect) of the Partnership in respect of the GP-Related BREP Europe VI Interest (including, without limitation, any GP-Related BREP Europe VI Investment, but excluding any Capital Commitment Investment).
GP-Related Net Income (Loss) has the meaning set forth in Section 5.1(b).
GP-Related Partner Interest of a Partner means all exempted limited partnership interests of such Partner in the Partnership (other than such Partners Capital Commitment Partner Interest), including, without limitation, such Partners exempted limited partnership interest in the Partnership with respect to the GP-Related BREP Europe VI Interest and with respect to all GP-Related Investments.
GP-Related Profit Sharing Percentage means the Carried Interest Sharing Percentage and Non-Carried Interest Sharing Percentage of each Partner; provided, that any references in this Agreement to GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the Non-Carried Interest Sharing Percentage of each Partner; provided further, that the term GP-Related Profit Sharing Percentage shall not include any Capital Commitment Profit Sharing Percentage.
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GP-Related Recontribution Amount has the meaning set forth in Section 5.8(d)(i)(A).
GP-Related Required Amounts has the meaning set forth in Section 4.1(a).
GP-Related Unallocated Percentage has the meaning set forth in Section 5.3(b).
GP-Related Unrealized Net Income (Loss) attributable to any GP-Related BREP Europe VI Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related BREP Europe VI Investment if BREP Europe VIs entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date (determined in accordance with Section 5.1(e)) and all distributions payable by BREP Europe VI to the Partnership (indirectly through the general partner of BREP Europe VI) pursuant to any BREP Europe VI Partnership Agreement with respect to such GP-Related BREP Europe VI Investment were made on such date.
GP-Related Unrealized Net Income (Loss) attributable to any other GP-Related Investment (other than any Capital Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related Investment if such GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in accordance with Section 5.1(e)).
Holdback has the meaning set forth in Section 4.1(d)(i).
Holdback Percentage has the meaning set forth in Section 4.1(d)(i).
Holdback Vote has the meaning set forth in Section 4.1(d)(iv)(A).
Holdings means Blackstone Holdings IV L.P., a Québec société en commandite.
Incompetence means, with respect to any Partner, the determination by the General Partner in its sole discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
Initial Holdback Percentages has the meaning set forth in Section 4.1(d)(i).
Initial Limited Partner has the meaning set forth in the recitals.
Interest means a Partners exempted limited partnership interest in the Partnership (including the right of a Limited Partner to any and all benefits to which a Limited Partner may be entitled as provided in this Agreement, together with the obligations of such Limited Partner to comply with all the terms and provisions of this Agreement), including any interest that is held by a Retaining Withdrawn Partner and including any Partners GP-Related Partner Interest and Capital Commitment Partner Interest.
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Investment means any investment (direct or indirect) of the Partnership designated by the General Partner from time to time as an investment in which the Partners respective interests shall be established and accounted for on a basis separate from the Partnerships other businesses, activities and investments, including (a) GP-Related Investments, and (b) Capital Commitment Investments.
Investor Note means a promissory note of a Partner evidencing indebtedness incurred by such Partner to purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such Partner in Blackstone Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, and such indebtedness shall be prepayable with Capital Commitment Net Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BE Agreements and any documentation relating to Other Sources; provided further, that references to Investor Notes herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BE Investments, and references to an Investor Note refer to one such loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not the lender or guarantor with respect thereto.
Investor Special Partner means any Special Partner so designated at the time of its admission by the General Partner as a Partner of the Partnership.
Issuer means the issuer of any Security comprising part of an Investment.
L/C has the meaning set forth in Section 4.1(d)(vi).
L/C Partner has the meaning set forth in Section 4.1(d)(vi).
Lender or Guarantor means Blackstone Holdings I L.P., in its capacity as lender or guarantor under the Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Entities.
Limited Partner means each of the parties listed as Limited Partners in the books and records of the Partnership or any person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each in its capacity as a limited partner of the Partnership. For the avoidance of doubt, the term Limited Partner does not include the General Partner or any Special Partners (notwithstanding the fact that Special Partners are limited partners of the Partnership).
Loss Amount has the meaning set forth in Section 5.8(e)(i)(A).
Loss Investment has the meaning set forth in Section 5.8(e).
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Losses has the meaning set forth in Section 3.5(b)(i).
Majority in Interest of the Partners on any date (a vote date) means one or more persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to the vote date selected by the General Partner as of which the Partners capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account balances of all the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
Moodys means Moodys Investors Service, Inc., or any successor thereto.
Net Carried Interest Distribution has the meaning set forth in Section 5.8(e)(i)(C).
Net Carried Interest Distribution Recontribution Amount has the meaning set forth in Section 5.8(e).
Net GP-Related Recontribution Amount has the meaning set forth in Section 5.8(d)(i)(A).
Non-Carried Interest means, with respect to each GP-Related Investment, all amounts of distributions, other than Carried Interest and other than Capital Commitment Distributions, received by the Partnership with respect to such GP-Related Investment, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments as it may determine in good faith is appropriate.
Non-Carried Interest Sharing Percentage means, with respect to each GP-Related Investment, the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
Non-Contingent means generally not subject to repurchase rights or other requirements.
Nonvoting Partner has the meaning set forth in Section 8.2.
Nonvoting Special Partner has the meaning set forth in Section 6.1(a).
Original Agreement has the meaning set forth in the recitals.
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Other Fund GPs means Associates Europe VI and any other entity (other than the Partnership) through which any Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates that it is a Fund GP or an Other Fund GP; provided further, that notwithstanding any of the foregoing, neither Blackstone Real Estate Associates Europe Delaware VI L.L.C. nor Holdings nor any Estate Planning Vehicle established for the benefit of family members of any Partner or of any member or partner of any Other Fund GP shall be considered an Other Fund GP for purposes hereof.
Other Sources means (i) distributions or payments of Capital Commitment Partner Carried Interest (which shall include amounts of Capital Commitment Partner Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any holdback obligation with respect thereto), and (ii) distributions from Blackstone Entities (other than the Partnership) to such Partner.
Parallel Fund means any additional collective investment vehicle (or other similar arrangement) formed pursuant to paragraph 2.8 of the BREP Europe VI Partnership Agreement.
Partner means any person who is a partner of the Partnership, including the Limited Partners, the General Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same Partner Category, shall have any right to vote as a class on any matter relating to the Partnership, including, but not limited to, any merger, reorganization, dissolution or liquidation.
Partner Category means the General Partner, Existing Partners, Retaining Withdrawn Partners or Deceased Partners, each referred to as a group for purposes hereof.
Partnership has the meaning set forth in the preamble hereto.
Partnership Act means the Exempted Limited Partnership Law of the Cayman Islands, as it may be amended from time to time, and any successor to such statute.
Partnership Affiliate has the meaning set forth in Section 3.3(b).
Partnership Affiliate Governing Agreement has the meaning set forth in Section 3.3(b).
Pledgable Blackstone Interests has the meaning set forth in Section 4.1(d)(v)(A).
Prime Rate means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate.
Qualifying Fund means any fund designated by the General Partner as a Qualifying Fund.
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Repurchase Period has the meaning set forth in Section 5.8(c).
Required Rating has the meaning set forth in Section 4.1(d)(vi).
Retained Portion has the meaning set forth in Section 7.6(a).
Retaining Withdrawn Partner means a Withdrawn Partner who has retained a GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
Securities means any debt or equity securities of an Issuer and its subsidiaries and other Controlled Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in limited liability companies (including warrants, rights, put and call options and other options relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
Securities Act means the U.S. Securities Act of 1933, as amended from time to time, or any successor statute.
Settlement Date has the meaning set forth in Section 6.5(a).
SMD Agreements means the agreements between the Partnership and/or one or more of its Affiliates and certain of the Partners, pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership and the relevant Partner.
Special Firm Collateral means interests in a Qualifying Fund or other assets that have been pledged or charged to the Trustee(s) to satisfy all or any portion of a Partners or Withdrawn Partners Holdback obligation (excluding any Excess Holdback) as more fully described in the Partnerships books and records.
Special Firm Collateral Realization has the meaning set forth in Section 4.1(d)(viii)(B).
Special Partner means any person shown in the books and records of the Partnership as a Special Partner of the Partnership, including any Nonvoting Special Partner and any Investor Special Partner.
S&P means Standard & Poors Ratings Group, and any successor thereto.
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Subject Investment has the meaning set forth in Section 5.8(e)(i).
Subject Partner has the meaning set forth in Section 4.1(d)(iv)(A).
Successor in Interest means any (i) shareholder of; (ii) trustee, custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or receiver, or former officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of; or (vi) other executor, administrator, committee, legal representative or other successor or assign of, any Partner, whether by operation of law or otherwise.
Tax Advances has the meaning set forth in Section 6.7(d).
Tax Matters Partner has the meaning set forth in Section 6.7(b).
TM has the meaning set forth in Section 10.2.
Total Disability means the inability of a Limited Partner substantially to perform the services required of such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of sickness, accident or otherwise.
Transfer has the meaning set forth in Section 8.2.
Trust Account has the meaning set forth in the Trust Agreement.
Trust Agreement means the Trust Agreement, dated as of the date set forth therein, as amended, supplemented, restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time.
Trust Amount has the meaning set forth in the Trust Agreement.
Trust Income has the meaning set forth in the Trust Agreement.
Trustee(s) has the meaning set forth in the Trust Agreement.
Unadjusted Carried Interest Distribution has the meaning set forth in Section 5.8(e)(i)(B).
Unallocated Capital Commitment Interests has the meaning set forth in Section 8.1(f).
U.S. means the United States of America.
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Withdraw or Withdrawal means, with respect to a Partner, such Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation, retirement or the occurrence of any other event of withdrawal of the General Partner pursuant to Section 36(7) of the Partnership Act, whether such is voluntary or involuntary), unless the context shall limit the type of withdrawal to a specific reason, and Withdrawn with respect to a Partner means, as aforesaid, such Partner ceasing to be a partner of the Partnership.
Withdrawal Date means the date of the Withdrawal from the Partnership of a Withdrawn Partner.
Withdrawn Partner means a Limited Partner whose GP-Related Partner Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal representatives of any such Partner.
W-8BEN has the meaning set forth in Section 3.7.
W-8BEN-E has the meaning set forth in Section 3.7.
W-8IMY has the meaning set forth in Section 3.7.
W-9 has the meaning set forth in Section 3.7.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term person includes individuals, partnerships (including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words include, includes and including shall be deemed to be followed by the phrase without limitation.
ARTICLE II
GENERAL PROVISIONS
Section 2.1. General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited Partners or Special Partners. The General Partner as of the date hereof is Blackstone Real Estate Associates Europe (Delaware) VI L.L.C. The Limited Partners and Special Partners shall be as shown in the books and records of the Partnership which shall be maintained in accordance with the Partnership Act. The books and records of the Partnership contain the GP-Related Profit Sharing Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the GP-Related Investments of the Partnership as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General Partner from time to time, in
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accordance with the Partnership Act and this Agreement, to reflect additional GP-Related Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the Capital Commitment Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the admission of additional Partners, the Withdrawal of Partners, the transfer or assignment of interests in the Partnership pursuant to the terms of this Agreement and any other matters required by the Partnership Act. At the time of admission of each additional Partner, the General Partner shall determine in its sole discretion the GP-Related Investments and Capital Commitment Investments in which such Partner shall participate and such Partners GP-Related Commitment, Capital Commitment-Related Commitment, GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest.
Section 2.2. Formation; Name; Foreign Jurisdictions. The Partnership was formed by the Original Agreement and registered as an exempted limited partnership, pursuant to the Partnership Act and is hereby continued as an exempted limited partnership pursuant to the Partnership Act and shall conduct its activities under the name of BREA Europe VI (Cayman) L.P. The General Partner shall have the power to change the name of the Partnership at any time, subject to compliance with the requirements of the Partnership Act, and shall thereupon file the requisite notice pursuant to the Partnership Act. The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business.
Section 2.3. Term. The term of the Partnership shall continue until December 31, 2069, unless earlier wound up and subsequently dissolved in accordance with this Agreement and the Partnership Act.
Section 2.4. Purposes; Powers. (a) The purposes of the Partnership shall be, directly or indirectly through subsidiaries or Affiliates, subject to the Partnership Act:
(i) to serve as a limited partner or general partner of Associates Europe VI and perform the functions of a limited partner, special general partner or general partner of Associates Europe VI specified in the Associates Europe VI LP Agreement and, if applicable, the BREP Europe VI Agreements;
(ii) if applicable, to serve as, and hold the Capital Commitment BREP Europe VI Interest as, a capital partner (and, if applicable, a limited partner, special general partner and/or a general partner) of BREP Europe VI and perform the functions of a capital partner (and, if applicable, a limited partner, special general partner and/or a general partner) of BREP Europe VI specified in the BREP Europe VI Agreements;
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(iii) to invest in Capital Commitment Investments and/or GP-Related Investments and acquire and invest in Securities or other property directly or indirectly through Associates Europe VI and/or BREP Europe VI or otherwise;
(iv) to make the Blackstone Capital Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other property either directly or indirectly through Associates Europe VI or another entity;
(v) to serve as a general partner or limited partner of BREP Europe VI and/or other investment vehicles and perform the functions of a general partner or limited partner, member, shareholder or other equity interest owner specified in the respective partnership agreement, limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such partnership;
(vi) to serve as a member, shareholder or other equity interest owner of limited liability companies, other companies, corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the respective limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity;
(vii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by the General Partner and as are permitted under the Partnership Act, the Associates Europe VI LP Agreement, the BREP Europe VI Agreements, and any applicable partnership agreement, limited liability company agreement, charter or other governing document referred to in clause (v) or (vi) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii) any other lawful purpose; and
(ix) to do all things necessary, desirable, convenient or incidental thereto.
(b) In furtherance of its purposes, the Partnership shall have all powers necessary, suitable or convenient for the accomplishment of its purposes, alone or with others, as principal or agent, including the following, provided, that the Partnership shall not undertake business with the public in the Cayman Islands other than so far as may be necessary for the carrying on of business exterior to the Cayman Islands:
(i) to be and become a general partner or limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of Investments or the acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnerships business, and to take any action in connection therewith;
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(ii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether such Investments and Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments or Securities or other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
(iii) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other short-term investments;
(v) to hold, receive, mortgage, pledge, charge, grant security interests over, lease, transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the Partnership;
(vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage, pledge, charge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy, sell, pledge, charge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its property or funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and maintain one or more offices within or without the Cayman Islands, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the maintenance of such office or offices;
(ix) to open, maintain and close accounts, including margin accounts, with brokers;
(x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants, both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
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(xii) to form or cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic and to form or cause to be formed and be a member or manager or both of one or more limited liability companies;
(xiii) to enter into, make and perform all contracts, agreements and other undertakings as may be necessary, convenient, advisable or incident to carrying out its purposes;
(xiv) to sue and be sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or investments or other property of the Partnership, or any combination thereof; and
(xvi) to take such other actions necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Cayman Islands and other applicable law.
Section 2.5. Place of Business. The Partnership shall maintain its principal place of business and office at 345 Park Avenue, New York, New York 10154, U.S.A or such other place the General Partner determines. The registered office of the Partnership in the Cayman Islands is Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, Grand Cayman, KY1-9005, Cayman Islands or at such other place or places as may from time to time be designated by the General Partner.
Section 2.6. Withdrawal of Initial Limited Partner. Upon the admission of one or more additional Limited Partners to the Partnership, the Initial Limited Partner shall (a) Withdraw as the Initial Limited Partner of the Partnership, and (b) have no further right, interest or obligation of any kind whatsoever as a Partner in the Partnership; provided, that the effective date of such Withdrawal shall be deemed as between the parties hereto to be May 8, 2019.
ARTICLE III
MANAGEMENT
Section 3.1. General Partner. Blackstone Real Estate Associates Europe (Delaware) VI L.L.C. shall be the General Partner as of the date hereof. The General Partner shall cease to be the General Partner only if (i) it Withdraws from the Partnership for any reason, (ii) it consents in its sole discretion to resign as the General Partner, or (iii) a Final Event with respect to it occurs. The General Partner may not be removed without its consent. There may be one or more General Partners. In the event that one or more other General Partners is admitted to the Partnership as such, all references herein to the General Partner in the singular form shall be deemed to also refer to such other General Partners as may be appropriate. The relative rights and responsibilities of the General Partners will be as agreed upon from time to time between them.
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Section 3.2. Partner Voting, etc. (a) Except as otherwise expressly provided herein and except as may be expressly required by the Partnership Act, Partners (including Special Partners), other than the General Partner, as such shall have no right to, and shall not, take part in the management, conduct or control of the Partnerships business or act for or bind the Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein, or, to the extent not waivable, in the Partnership Act.
(b) To the extent a Partner is entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner (or any Affiliate thereof) in such matter.
(c) Meetings of the Partners may be called only by the General Partner.
(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided by the General Partner requesting the consent, approval or vote of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent or approval thereto.
Section 3.3. Management. (a) The General Partner shall have the powers, rights, obligations and liabilities of a general partner pursuant to the Partnership Act (including Section 4(2) of the Partnership Act); and without limiting the foregoing, the management, conduct of business, control and operation of the Partnership and the formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall, in its discretion, exercise all powers necessary and convenient for the purposes of the Partnership, including those enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in the General Partners discretion, subject only to the express terms and conditions of this Agreement.
(b) All outside business or investment activities of the Partners (including outside directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) Notwithstanding any provision in this Agreement to the contrary, the Partnership is hereby authorized, without the need for any further act, vote or consent of any person (directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in the Partnerships capacity as a partner of Associates Europe VI on Associates Europe VIs own behalf or in Associates Europe VIs capacity as general partner, special general partner, capital partner and/or limited partner of BREP Europe VI or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnerships capacity as a capital partner of BREP Europe VI or as general or limited partner, member, shareholder or other equity interest owner of
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any Partnership Affiliate (as hereinafter defined)): (i) to execute and deliver, and to perform the Partnerships obligations under the Associates Europe VI LP Agreement, including, without limitation, serving as a limited partner or general partner of Associates Europe VI, (ii) to execute and deliver, and to cause Associates Europe VI to perform Associates Europe VIs obligations under, the BREP Europe VI Agreements, including, without limitation, serving as a general partner or special general partner of BREP Europe VI and, if applicable, a capital partner of BREP Europe VI, (iii) if applicable, to execute and deliver, and to perform the Partnerships obligations under the BREP Europe VI Agreements, including, without limitation, serving as a capital partner of BREP Europe VI, (iv) to execute and deliver, and to perform, or, if applicable, to cause Associates Europe VI to perform, the Partnerships or Associates Europe VIs obligations under, the governing agreement, as amended, supplemented, restated or otherwise modified (each a Partnership Affiliate Governing Agreement), of any other partnership, limited liability company, other company, corporation or other entity (each a Partnership Affiliate) of which the Partnership or Associates Europe VI is, or is to become, a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner, special general partner, or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate, and (v) to take any action, in the applicable capacity, contemplated by or arising out of this Agreement, the Associates Europe VI LP Agreement, the BREP Europe VI Agreements or each Partnership Affiliate Governing Agreement (and any amendment, supplement, restatement and/or other modification of any of the foregoing).
(d) The General Partner, and any other person designated by the General Partner, each acting individually, is hereby authorized and empowered, as an authorized person of the Partnership, or the General Partner (within the meaning of the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended, or otherwise) (the General Partner hereby authorizing and ratifying any of the following actions):
(i) to execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf, or in its capacity as a limited partner or general partner of Associates Europe VI on Associates Europe VIs own behalf, or in Associates Europe VIs capacity as general partner, special general partner, capital partner and/or limited partner of BREP Europe VI or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnerships capacity as a capital partner of BREP Europe VI or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate), any of the following:
(A) any agreement, certificate, instrument or other document of the Partnership, Associates Europe VI, BREP Europe VI or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the Associates Europe VI LP Agreement, the BREP Europe VI Agreements and each Partnership Affiliate Governing Agreement, (II) subscription agreements and documents on behalf of BREP Europe VI or Associates Europe VI, (III) side letters issued in connection with investments in BREP Europe VI, and (IV) such
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other agreements, certificates, instruments and other documents as may be necessary or desirable in furtherance of the purposes of the Partnership, Associates Europe VI, BREP Europe VI or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing referred to in (I) through (IV) above) and for the avoidance of doubt, this Agreement may be amended by the General Partner in its sole discretion;
(B) the certificates of formation, certificates of limited partnership and/or other organizational documents of the Partnership, Associates Europe VI, BREP Europe VI and any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing); and
(C) any other certificates, notices, applications and other documents (and any amendments, supplements, restatements and/or other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, Associates Europe VI, BREP Europe VI or any Partnership Affiliate to qualify to do business in a jurisdiction in which the Partnership, Associates Europe VI, BREP Europe VI or such Partnership Affiliate desires to do business;
(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a limited partner or general partner of Associates Europe VI on Associates Europe VIs own behalf or in Associates Europe VIs capacity as general partner, special general partner, capital partner and/or limited partner of BREP Europe VI, or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnerships capacity as a capital partner of BREP Europe VI or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate): (A) any certificates, forms, notices, applications and other documents to be filed with any government or governmental or regulatory body on behalf of the Partnership, Associates Europe VI, BREP Europe VI and/or any Partnership Affiliate, (B) any certificates, forms, notices, applications and other documents that may be necessary or advisable in connection with any bank account of the Partnership, Associates Europe VI, BREP Europe VI or any Partnership Affiliate or any banking facilities or services that may be utilized by the Partnership, Associates Europe VI, BREP Europe VI or any Partnership Affiliate, and all checks, notes, drafts and other documents of the Partnership, Associates Europe VI, BREP Europe VI or any Partnership Affiliate that may be required in connection with any such bank account or banking facilities or services and (C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.3(c), each acting individually, shall be deemed to have been duly adopted by the General Partner, the Partnership, Associates Europe VI, BREP Europe VI or any Partnership Affiliate, as applicable, for all purposes).
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(e) The authority granted to any person (other than the General Partner) in Section 3.3(c) may be revoked at any time by the General Partner by an instrument in writing signed by the General Partner.
Section 3.4. Responsibilities of Partners. (a) Unless otherwise determined by the General Partner in a particular case, each Limited Partner (other than a Special Partner) shall devote substantially all of his or her time and attention to the businesses of the Partnership and its Affiliates, and each Special Partner shall not be required to devote any time or attention to the businesses of the Partnership or its Affiliates.
(b) All outside business or investment activities of the Partners (including outside directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
Section 3.5. Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent permitted by law, no Partner nor any of such Partners representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a Covered Person and collectively, the Covered Persons) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its duties under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
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(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the extent of the Partnerships assets (including, without limitation, the remaining capital commitments of the Partners)) each Covered Person from and against any and all claims, damages, losses, costs, expenses and liabilities (including, without limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.5(b), Losses), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Persons management of the affairs of the Partnership or which relate to or arise out of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its share of such Losses in accordance with such Covered Persons GP-Related Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave rise to such Losses. To the fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the approval of the General Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the Covered Person to repay such amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.5(b), and the Partnership and its Affiliates shall have a continuing right of offset against such Covered Persons interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person to satisfy such repayment obligation. If a Partner institutes litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partners Interests and remaining capital commitments, for such Partners pro rata share of the Partnerships expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover losses, claims, damages or liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.5(b). The General Partner shall have the authority to enter into separate agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this Section 3.5(b).
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(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the Partnerships obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing BREP Europe VI and/or a particular portfolio entity through which an Investment is indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BREP Europe VI; second, by the applicable portfolio entity through which such investment is indirectly held; third, by BREP Europe VI and fourth by Associates Europe VI (only to the extent the foregoing sources are exhausted).
(B) The Partnerships obligation, if any, to indemnify or advance expenses to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from BREP Europe VI and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by Associates Europe VI, BREP Europe VI and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against Associates Europe VI and/or BREP Europe VI and/or such portfolio entity in respect of such advancement or payments. The General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of The Blackstone Group Inc. or any of its Affiliates, which shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
Section 3.6. Representations of Partners. (a) Each Limited Partner and Special Partner by execution of this Agreement (or by otherwise becoming bound by the terms and conditions hereof as provided herein) represents and warrants to every other Partner and to the Partnership, except as may be waived by the General Partner, that such Partner is acquiring each of such Partners Interests for such Partners own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any interest in any such Interest or in the rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the terms hereof). Each Limited Partner and Special Partner represents and warrants that such Partner understands that the Interests have not been registered under the Securities Act and therefore such Interests may not be resold without registration under the Securities Act or exemption from such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner and Special Partner represents that such Partner has such knowledge and experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Partner is able to bear the economic risk of such investment. Each Limited Partner and Special Partner represents that such Partners overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Partners net worth and the Partner has no need for liquidity in the Partners investment in Interests. Each Limited Partner
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and Special Partner represents that to the full satisfaction of the Partner, the Partner has been furnished any materials that such Partner has requested relating to the Partnership, any Investment and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of Interests and any matters pertaining to each Investment and to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the Partner has consulted to the extent deemed appropriate by the Partner with the Partners own advisers as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Partner.
(b) Each Limited Partner and Special Partner agrees that the representations and warranties contained in paragraph (a) above shall be true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any Investment, and such Partner hereby agrees that such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall serve as confirmation thereof.
Section 3.7. Tax Representation and Further Assurances. (a) Each Limited Partner and Special Partner, upon the request of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partners or the Partnerships obligations under applicable law or to carry out the provisions of this Agreement.
(b) Each Limited Partner and Special Partner certifies that (A) if the Limited Partner or Special Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner or Special Partners name, social security number (or, if applicable, employer identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W- 9, Request for Taxpayer Identification Number Certification (W-9) or otherwise are correct and (ii) the Limited Partner or Special Partner will complete and return a W-9 and (y) (i) the Limited Partner or Special Partner is a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or (B) if the Limited Partner or Special Partner is not a United States person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) (W-8BEN), IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (W-8BEN-E), or other applicable form, including but not limited to IRS Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting (W-8IMY), or otherwise is correct and (ii) the Limited Partner or Special Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN, W-8BEN-E or W-8IMY, and (y) (i) the Limited Partner or Special Partner is not a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited Partner and Special Partner agrees to provide such cooperation and assistance, including but not limited to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably requested by the Partnership or the
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General Partner (including without limitation any self-certification forms required by the Partnership to comply with any obligations under the Common Reporting Standard issued by the Organisation for Economic Co-operation and Development, any similar legislation, regulations or guidance enacted in any other jurisdiction or any legislation, any associated intergovernmental agreement, treaty or any other arrangement and/or any regulations or guidance implemented in the Cayman Islands to give effect to the foregoing).
(c) Each Limited Partner and Special Partner acknowledges and agrees that the Partnership and the General Partner may release confidential information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partners investment in the Partnership if the Partnership or the General Partner, in its or their sole discretion, determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be treated as a breach of any restriction upon the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any of their Affiliates for any form of damages or liability as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides information that is in anyway materially misleading, or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnerships obligations, the General Partner reserves the right to take any action and pursue any remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partners or Special Partners action or inaction from amounts otherwise distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1. Capital Contributions by Partners. (a) Each Partner shall be required to make capital contributions to the Partnership (GP-Related Capital Contributions) at such times and in such amounts (the GP-Related Required Amounts) as are required to satisfy the Partnerships obligation to make capital contributions to Associates Europe VI in respect of the GP-Related Associates Europe VI Interest to fund Associates Europe VIs capital contributions with respect to any GP-Related BREP Europe VI Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Limited Partners Commitment Agreement or SMD Agreement, if any, or otherwise; provided, that additional GP-Related Capital Contributions in excess of the GP-Related Required Amounts may be made pro rata among the Partners based upon each Partners Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related Required Amounts which are to be used for ongoing business operations (as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth in Section 4.1(d) and Section 5.8(d))) shall be determined by the General Partner. Special Partners shall not be
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required to make additional GP-Related Capital Contributions to the Partnership in excess of the GP-Related Required Amounts, except (i) as a condition of an increase in such Special Partners GP-Related Profit Sharing Percentage or (ii) as specifically set forth in this Agreement; provided, that the General Partner and any Special Partner may agree from time to time that such Special Partner shall make an additional GP-Related Capital Contribution to the Partnership; provided further, that each Investor Special Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital of the Partnership related to the GP-Related BREP Europe VI Interest.
(b) Each GP-Related Capital Contribution by a Partner shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.
(c) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group Inc. or any Affiliate thereof) the amount of any GP-Related Capital Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group Inc. or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner.
(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain amounts of the distributions relating to Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a Holdback). The General Partner shall determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner and/or Holdings and each Partner Category (such withheld percentage constituting the General Partners and such Partner Categorys Holdback Percentage). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than the General Partner), 21% for Retaining Withdrawn Partners (other than the General Partner) and 24% for Deceased Partners (the Initial Holdback Percentages). Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for the General Partner and/or Holdings shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
(ii) The Holdback Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner Categories on a proportionate basis. For example, if the Holdback Percentage for Existing Partners is decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively. Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such reduction.
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(iii) The Holdback Percentage may not be increased for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners Holdback Percentage beyond 21% unless the General Partner concurrently increases the Existing Partners Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners Holdback Percentage beyond 24% unless the General Partner increases the Holdback Percentage for both Existing Partners and Retaining Withdrawn Partners to 24%. The General Partner may not increase the Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any increase in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner from proportionately increasing the Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial Holdback Percentages.
(iv) (A) Notwithstanding anything contained herein to the contrary, the General Partner may increase or decrease the Holdback Percentage for any Partner in any Partner Category (in such capacity, the Subject Partner) pursuant to a majority vote of the Limited Partners (a Holdback Vote); provided, that, notwithstanding anything to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a Subject Partners Holdback Percentage shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partners Holdback Percentage and (y) has, if requested by such Subject Partner, been given 30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such decrease occurs subsequent to an increase in a Subject Partners Holdback Percentage pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject Partners Holdback Percentage is less than the prevailing Holdback Percentage for the Partner Category of such Subject Partner; provided further, that a Partner shall not vote to increase a Subject Partners Holdback Percentage unless such voting Partner determines, in such Partners good faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partners successors or assigns (including such Subject Partners estate or heirs) who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be capable of satisfying any GP-Related Recontribution Amounts that may become due.
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(B) A Holdback Vote shall take place at a Partnership meeting. Each of the Limited Partners shall be entitled to cast one vote with respect to the Holdback Vote regardless of such Limited Partners interest in the Partnership. Such vote may be cast by any such Partner in person or by proxy.
(C) If the result of the second Holdback Vote is an increase in a Subject Partners Holdback Percentage, such Subject Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree upon a mutually satisfactory arbitrator within 10 days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates; provided further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the arbitrator. Each Subject Partner that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected out-of-pocket expenses relating thereto, and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator, pay the total of such estimated expenses (i.e., both the Subject Partners and the Partnerships expenses) into an escrow account. The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses associated with such arbitration (including costs leading thereto) and to return to the victorious party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing party is insufficient to cover the expenses of such arbitration, such losing party shall then provide any additional funds necessary to cover such costs to such victorious party. For purposes hereof, the victorious party shall be the Partnership if the Holdback Percentage ultimately determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partners Partner Category; otherwise, the Subject Partner shall be the victorious party. The party that is not the victorious party shall be the losing party.
(D) In the event of a decrease in a Subject Partners Holdback Percentage (1) pursuant to a Holdback Vote under this clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and the Trust Income thereon (except as expressly provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partners reduced Holdback Percentage) as though such reduced Holdback Percentage had applied since the increase of the Subject Partners Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
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(v) (A) If a Partners Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the Excess Holdback Percentage), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partners Excess Holdback), and such Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may obtain the release of the Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partners or Withdrawn Partners Excess Holdback obligation, by pledging, charging, granting a security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess Holdback obligation. Any Partner seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that, in the case of entities listed in the Partnerships books and records in which Partners are permitted to pledge, charge or grant a security interest over their interests therein to finance all or a portion of their capital contributions thereto (Pledgable Blackstone Interests), to the extent a first priority security interest is unavailable because of an existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner provided above; provided further, that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available, or (y) if the General Partner otherwise determines in its good faith judgment that a security interest in Firm Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause (x) or (y) above) irrevocably instruct in writing the relevant partnership, limited liability company or other entity listed in the Partnerships books and records to remit any and all net proceeds resulting from a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more fully provided in clause (B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is necessary to enable such Partner or Withdrawn Partner to use Firm Collateral as provided hereunder.
(B) If upon a sale or other realization of all or any portion of any Firm Collateral (a Firm Collateral Realization), the remaining Firm Collateral is insufficient to cover any Partners or Withdrawn Partners Excess Holdback requirement, then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to fully satisfy such Excess Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary to satisfy such Excess Holdback requirement shall be distributed to such Partner or Withdrawn Partner.
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(C) Upon any valuation or revaluation of Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partners or Withdrawn Partners Excess Holdback requirement (including upon a Firm Collateral Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partners or Withdrawn Partners Excess Holdback requirement), the Partnership shall provide notice of the foregoing to such Partner or Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her Excess Holdback requirement. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to a default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term GP-Related Defaulting Party where such term appears in such Section 5.8(d)(ii) shall be construed as defaulting party for purposes hereof and (II) the terms Net GP-Related Recontribution Amount and GP-Related Recontribution Amount where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(vi) Any Partner or Withdrawn Partner may (A) obtain the release of any Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn Partner or (B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an L/C) for the benefit of the Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an L/C Partner) shall deliver to the Trustee(s) an unconditional and irrevocable L/C from a commercial bank whose (x) short-term deposits are rated at least A-1 by S&P or P-1 by Moodys (if the L/C is for a term of 1 year or less), or (y) long-term deposits are rated at least A+ by S&P or A1 by Moodys (if the L/C is for a term of 1 year or more) (each a Required Rating). If the relevant rating of the commercial bank issuing such L/C drops below the relevant Required Rating, the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient L/C. In addition, if the L/C has a term expiring on a date earlier than the latest possible termination date of BREP Europe VI, the Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as directed by the Partnership in the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partners obligation relating to the Partnerships obligations under the Clawback Provisions or (II) an L/C Partner has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted
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hereunder)), at least 30 days prior to the stated expiration of an existing L/C in accordance with this clause (vi). The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the Trust Account and satisfaction of the Partnerships obligations, if any, in respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted hereunder), or (3) the release, by the Trustee(s), as directed by the Partnership, of all amounts in the Trust Account to the Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm Collateral (to the extent permitted hereunder) or if the Trustee(s), as directed by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of an L/C Partner may be reduced by an amount corresponding to such portion satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that in no way shall the general release of any Trust Income cause an L/C Partner to be permitted to reduce the amount of an L/C by any amount.
(vii) (A) Any in-kind distributions by the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose of any in-kind distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
(B) In lieu of the foregoing, any Existing Partner may pledge, charge or grant a security interest with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the Partnerships books and records; provided, that the initial contribution of such Special Firm Collateral shall initially equal 130% of the required Holdback for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback. Sections 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent such Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account.
(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her Holdback (excluding any Excess Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein, obtain a release of Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partners or Withdrawn Partners Holdback (excluding any Excess Holdback) by pledging, charging or otherwise granting a security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the Holdback distributed to the Partner or Withdrawn Partner (as more fully set forth below). Any Partner seeking to satisfy such Partners Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral.
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(B) If upon a distribution, withdrawal, sale, liquidation or other realization of all or any portion of any Special Firm Collateral (a Special Firm Collateral Realization), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is being used in connection with an Excess Holdback) is insufficient to cover any Partners or Withdrawn Partners Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to the Trust Account or an L/C in the Trust Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund or other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for purposes hereunder. Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or Withdrawn Partner. To the extent a Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such Partners or Withdrawn Partners deficiency with respect to his or her Holdback in cash or an L/C.
(C) Upon any valuation or revaluation of the Special Firm Collateral and/or any adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the Partnerships books and records), if such Partners or Withdrawn Partners Special Firm Collateral is valued at less than such Partners Holdback (excluding any Excess Holdback) as provided in the Partnerships books and records, taking into account other permitted means of satisfying the Holdback hereunder, the Partnership shall provide notice of the foregoing to such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm Collateral to the Trust Account in an amount necessary to make up such deficiency. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that the first sentence of Section 5.8(d)(ii)(A) shall be deemed inapplicable to such default; provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term GP-Related Defaulting Party where such term appears in such Section 5.8(d)(ii) shall be construed as defaulting party for purposes hereof and (II) the terms Net GP-Related Recontribution Amount and GP-Related Recontribution Amount where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
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(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the General Partner may revoke the ability of such Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause (C) above shall apply to the Withdrawn Partners obligation to satisfy the Holdback (except that 30 days notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion of the Holdback (excluding any Excess Holdback).
(E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner or Withdrawn Partner from using any amount of such Partners interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
Section 4.2. Interest. Interest on the balances of the Partners capital related to the Partners GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment of the Partnership) shall be credited to the Partners GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
Section 4.3. Withdrawals of Capital. No Partner may withdraw capital related to such Partners GP-Related Partner Interests from the Partnership except (i) by way of distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or (iii) as determined by the General Partner.
ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1. General Accounting Matters. (a) GP-Related Net Income (Loss) shall be determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b) GP-Related Net Income (Loss) means:
(i) from any activity of the Partnership related to the GP-Related BREP Europe VI Interest for any accounting period (other than GP-Related Net Income (Loss) from GP-Related Investments described below), (x) the gross income realized by the Partnership from such activity during such accounting period less (y) all expenses of the Partnership, and all other items that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below);
(ii) from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of, (x) the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (y) all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment (determined as provided below); and
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(iii) from any GP-Related Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of, (x) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (y) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
(c) GP-Related Net Income (Loss) shall be determined in accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its adjusted tax basis for U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset in the books of the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this definition shall be treated as deductible items; (v) any income from a GP-Related Investment that is payable to Partnership employees in respect of phantom interests in such GP-Related Investment awarded by the General Partner to employees shall be included as an expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment, and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of the Partnership, Holdings and other Affiliates of the Partnership shall be allocated among the Partnership, Holdings and such Affiliates, among various Partnership activities and GP-Related Investments and between accounting periods, in each case as determined by the General Partner. Any adjustments to GP-Related Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items shall be made in accordance with GAAP; provided, that the General Partner shall not be required to make any such adjustment.
(d) An accounting period shall be a Fiscal Year, except that, at the option of the General Partner, an accounting period will terminate and a new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year. If any event referred to in the preceding sentence occurs and the General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to the Partners GP-Related Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated Percentages or adjustments to GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the
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Partners average GP-Related Profit Sharing Percentages during such accounting period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such GP-Related Investment was acquired.
(e) In establishing GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it deems appropriate.
(f) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this Agreement shall be made by the General Partner and approved by the Partnerships independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any successor thereto.
Section 5.2. GP-Related Capital Accounts. (a) There shall be established for each Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or more capital accounts as the General Partner may deem to be appropriate for purposes of accounting for such Partners interests in the capital of the Partnership related to the GP-Related BREP Europe VI Interest and the GP-Related Net Income (Loss) of the Partnership (each a GP-Related Capital Account).
(b) As of the end of each accounting period or, in the case of a contribution to the Partnership by one or more of the Partners with respect to such Partner or Partners GP-Related Partner Interests or a distribution by the Partnership to one or more of the Partners with respect to such Partner or Partners GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related Capital Accounts of each Partner shall be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership related to such Partners GP-Related Partner Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such accounting period and (C) the interest credited on the balance of such Partners capital related to such Partners GP-Related Partner Interest for such accounting period pursuant to Section 4.2; and (ii) the appropriate GP-Related Capital Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of any property distributed to such Partner during such accounting period with respect to such Partners GP-Related Partner Interest and (y) the GP-Related Net Loss allocated to such Partner for such accounting period.
Section 5.3. GP-Related Profit Sharing Percentages. (a) Prior to the beginning of each annual accounting period, the General Partner shall establish the profit sharing percentage (the GP-Related Profit Sharing Percentage) of each Partner in each category of GP-Related Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner deems appropriate; provided, that (i) the General
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Partner may elect to establish GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph (c) below and (ii) GP-Related Net Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the GP-Related Profit Sharing Percentages in such GP-Related Investment established in accordance with paragraph (c) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former Partners GP-Related Profit Sharing Percentages shall be allocated by the General Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing Percentages of the other Partners shall be reduced by an amount equal to the GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other Partners GP-Related Profit Sharing Percentage shall be pro rata based upon such Partners GP-Related Profit Sharing Percentage as in effect immediately prior to the admission of the new Partner. Notwithstanding the foregoing, the General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion.
(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a GP-Related Unallocated Percentage); provided, that any GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the General Partner within 90 days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
Section 5.4. Allocations of GP-Related Net Income (Loss). (a) Except as provided in Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related Capital Accounts related to such GP-Related Investment of all the Partners participating in such GP-Related Investment (including the General Partner): first, in proportion to and to the extent of the amount of Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest distributed to the Partners; second, to Partners that received Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest in years prior to the years such GP-Related Net Income is being allocated to the extent such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions)
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or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the Partners in the same manner that such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest would have been distributed if cash were available to distribute with respect thereto.
(b) GP-Related Net Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BREP Europe VI and allocated to the Partnership with respect to its pro rata share thereof (based on capital contributions made by the Partnership to BREP Europe VI with respect to the GP-Related BREP Europe VI Interest) shall be allocated to the Partners in accordance with each Partners Non-Carried Interest Sharing Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BREP Europe VI and (ii) GP-Related Net Loss relating to realized losses suffered by BREP Europe VI and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partners (including a Withdrawn Partners) Carried Interest Give Back Percentage (as of the date of such loss) (subject to adjustment pursuant to Section 5.8(e)).
(c) Notwithstanding Section 5.4(a) above, GP-Related Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be allocated in accordance with such Carried Interest Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b). Withdrawn Partners shall remain Partners for purposes of allocating such GP-Related Net Loss with respect to Carried Interest.
(d) To the extent the Partnership has any GP-Related Net Income (Loss) for any accounting period unrelated to BREP Europe VI, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages prevailing at the beginning of such accounting period.
(e) The General Partner may authorize from time to time advances to Partners (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group Inc. or any Affiliate thereof) against their allocable shares of GP-Related Net Income (Loss).
(f) Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 5.5. Liability of Partners. Except as otherwise provided in the Partnership Act or as expressly provided in this Agreement, no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In no event shall any Partner or Withdrawn Partner (i) be obligated to make any capital contribution or payment to or on behalf of the Partnership or (ii) have any liability to return distributions received by such Partner from the Partnership, in each case except as specifically provided in Section 4.1(d) or Section 5.8 or otherwise in this Agreement, as such Partner shall otherwise expressly agree in writing or as may be required by applicable law.
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Section 5.6. Liability of General Partner. The General Partner shall have unlimited liability for the satisfaction and discharge of all losses, liabilities and expenses of the Partnership.
Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or other requirements with respect to the Partners GP-Related Partner Interests relating to GP-Related BREP Europe VI Investments as the General Partner may determine. The General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner that is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements from time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
Section 5.8. Distributions. (a) (i) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other property to Partners with respect to such Partners GP-Related Partner Interests at such times and in such amounts as are determined by the General Partner. The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of GP-Related Net Income (Loss) established pursuant to Section 5.1(a). Distributions of cash or other property with respect to Non-Carried Interest shall be made among the Partners in accordance with their respective Non-Carried Interest Sharing Percentages, and, subject to Section 4.1(d) and Section 5.8(e), distributions of cash or other property with respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing Percentages.
(ii) At any time that a sale, exchange, transfer or other disposition by BREP Europe VI of a portion of a GP-Related Investment is being considered by the Partnership (a GP-Related Disposable Investment), at the election of the General Partner each Partners GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a Partners GP-Related Class B Interest), and a GP-Related Partner Interest attributable to such GP-Related Investment excluding the GP-Related Disposable Investment (a Partners GP-Related Class A Interest). Distributions (including those resulting from a sale, transfer, exchange or other disposition by BREP Europe VI) relating to a GP- Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B Interests, and distributions (including those resulting from the sale, transfer, exchange or other disposition by BREP Europe VI) relating to a GP-Related Investment excluding such GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
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(b) Subject to the Partnerships having sufficient available cash in the reasonable judgment of the General Partner and as required by applicable law, the Partnership shall make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other income taxes (including, without limitation, taxes under Sections 1401 and 1411 of the Code), (ii) taking into account (x) the limitations on the deductibility of expenses and other items for U.S. federal income tax purposes and (y) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income) and (iii) taking into account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the foregoing sentence, the General Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by applicable law.
(c) The General Partner may provide that the GP-Related Partner Interest of any Partner or employee (including such Partners or employees right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the General Partner shall determine (a Repurchase Period). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be distributed to the recipient thereof (together with interest thereon at rates determined by the General Partner from time to time) as the recipients rights to such distributions become Non-Contingent (by virtue of the expiration of the applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of whether the applicable Repurchase Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any GP-Related Investment that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage interests in such GP-Related Investment, or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner; provided, that the General Partner may allocate the Withdrawn Partners share of unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn Partners Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor Special Partner shall be allocated a share of such unrealized investment income equal to its respective GP-Related Profit Sharing Percentage of such unrealized investment income.
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(d) (i) (A) If Associates Europe VI is obligated under the Clawback Provisions or Giveback Provisions to contribute to BREP Europe VI a Clawback Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) and the Partnership is obligated to contribute any such amount to Associates Europe VI, directly or indirectly, in respect of the Partnerships GP-Related Associates Europe VI Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount being herein called a GP-Related Giveback Amount), the General Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership as determined by the General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect to Carried Interest (and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the GP-Related Recontribution Amount) which equals (I) the product of (a) a Partners or Withdrawn Partners Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership in the case of Clawback Amounts and (II) with respect to a GP-Related Giveback Amount, such Partners pro rata share of prior distributions of Carried Interest and/or Non-Carried Interest in connection with (a) the GP-Related BREP Europe VI Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant to clause (II)(a) above are insufficient to satisfy such GP-Related Giveback Amount, GP-Related BREP Europe VI Investments other than the one giving rise to such obligation, but only those amounts received by the Partners with an interest in the GP-Related BREP Europe VI Investment referred to in clause (II)(a) above, and (c) if the GP-Related Giveback Amount pursuant to an applicable BREP Europe VI Agreement is unrelated to a specific GP-Related BREP Europe VI Investment, all GP-Related BREP Europe VI Investments. Each Partner and Withdrawn Partner shall promptly contribute to the Partnership, along with satisfying his or her comparable obligations to the Other Fund GPs, if any, upon such call such Partners or Withdrawn Partners GP-Related Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the Partnership, or if applicable, any of the Other Fund GPs with respect to Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the Net GP-Related Recontribution Amount), irrespective of the fact that the amounts in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnerships and the Other Fund GPs obligation under the Clawback Provisions and/or Giveback Provisions; provided, that to the extent a Partners or Withdrawn Partners share of the amount paid with respect to the Clawback Amount or the GP-Related Giveback Amount exceeds his or her GP-Related Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably practicable, subject to clause (ii) below; provided further, that such written instructions from the General Partner shall specify each Partners and Withdrawn Partners GP-Related Recontribution Amount. Prior to such time, the General Partner may, in its discretion (but shall be under no obligation to), provide notice that in the General Partners judgment, the potential obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an estimate of the aggregate amount of such obligations); provided further, that any amount from a Partners Trust Account used to pay any GP-Related Giveback Amount (or such lesser amount as may be required by the General Partner) shall be contributed by such Partner to such Partners Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback Amount.
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(B) To the extent any Partner or Withdrawn Partner has satisfied any Holdback obligation with Firm Collateral, such Partner or Withdrawn Partner shall, within 10 days of the General Partners call for GP-Related Recontribution Amounts, make a cash payment into the Trust Account in an amount equal to the amount of the Holdback obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of (I) such Partners or Withdrawn Partners GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the Trustee(s) shall take such steps as are necessary to release such Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such Partner or Withdrawn Partner, the balance of such Firm Collateral if any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the satisfaction of the Partnerships and the Other Fund GPs obligation to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall constitute a default under Section 5.8(d)(ii) as if such cash payment hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). Solely to the extent required by the BREP Europe VI Partnership Agreement, each partner of the General Partner shall have the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(B) and under Section 5.8(d)(ii)(A) with respect to such partners pro rata share of any Clawback Amount and solely to the extent that the Partnership has insufficient funds to meet the Partnerships obligations under the BREP Europe VI Partnership Agreement.
(ii) (A) In the event any Partner or Withdrawn Partner (a GP-Related Defaulting Party) fails to recontribute all or any portion of such GP-Related Defaulting Partys Net GP-Related Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully described in clause (II) of Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Partys obligation to pay such GP-Related Defaulting Partys Net GP-Related Recontribution Amount (a GP-Related Deficiency Contribution) if the General Partner determines in its good faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related Deficiency Contribution be required to contribute an amount in excess of 167% of the amount of the Net GP-Related Recontribution Amount initially requested from such Partner or Withdrawn Partner in respect of such default.
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(B) Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Partys Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Net GP-Related Recontribution Amount of a GP-Related Defaulting Party from the date such Net GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(C) Any Partners or Withdrawn Partners failure to make a GP-Related Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first seek any remaining Trust Amounts (and Trust Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partners or Withdrawn Partners obligation to make a GP-Related Deficiency Contribution before seeking cash contributions from such Partner or Withdrawn Partner in satisfaction of such Partners or Withdrawn Partners obligation to make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or Withdrawn Partners pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the Partnership shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
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(iv) A Partners or Withdrawn Partners obligation to make contributions to the Partnership under this Section 5.8(d) shall survive the commencement of winding up and subsequent dissolution of the Partnership.
(e) The Partners acknowledge that the General Partner will (and is hereby authorized to) take such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Aggregate Net Losses from Writedowns (as defined in the BREP Europe VI Agreements) and Losses (as defined in the BREP Europe VI Agreements) on GP-Related BREP Europe VI Investments that have been the subject of a writedown and/or Net Loss (as defined in the BREP Europe VI Agreements) (each, a Loss Investment) to those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have received Carried Interest distributions from other GP-Related BREP Europe VI Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be made as set forth in this Section 5.8(e).
(i) At the time the Partnership is making Carried Interest distributions in connection with a GP-Related BREP Europe VI Investment (the Subject Investment) that have been reduced under any BREP Europe VI Agreement as a result of one or more Loss Investments, the General Partner shall calculate amounts distributable to or due from each such Partner as follows:
(A) determine each Partners share of each such Loss Investment based on his or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution to all Partners (indirectly through the Partnership from BREP Europe VI) from the Subject Investment (such reduction, the Loss Amount);
(B) determine the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject Investment (indirectly through the Partnership from BREP Europe VI) before any reduction in respect of the amount determined in clause (A) above (the Unadjusted Carried Interest Distributions); and
(C) subtract (I) the Loss Amounts relating to all Loss Investments from (II) the Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (Net Carried Interest Distribution).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is a negative number, the General Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried Interest distributions (a Net Carried Interest Distribution Recontribution Amount), up to the amount of such negative Net Carried Interest Distribution, and (II) to the extent amounts recontributed pursuant to clause (I) are
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insufficient to satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest Distribution. If a Partners (x) Net Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Tax Rate (as defined in the BREP Europe VI Agreements) in effect in the Fiscal Years of such distributions (the Excess Tax-Related Amount), then such Partner may, in lieu of paying such Partners Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by the amount of Carried Interest otherwise distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such time as the Clawback Amount is determined (as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the extent there is an amount of negative Net Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest Distribution shall be allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment.
A Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly upon notice from the General Partner (as provided above) shall be deemed a GP-Related Defaulting Party for all purposes hereof.
A Partner may satisfy in part any Net Carried Interest Distribution Recontribution Amount from cash that is then subject to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to the reduced amount of aggregate Carried Interest distributions received by such Partner (taking into account any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such distribution (taken together with the other Carried Interest distributions received by such Partner to date).
(ii) In the case of Clawback Amounts which are required to be contributed to the Partnership as otherwise provided herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
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(A) determine each Partners share of any Net Losses (as defined in the BREP Europe VI Agreements) in any GP-Related BREP Europe VI Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BREP Europe VI Investment with respect to which Carried Interest distributions were made), based on such Partners Carried Interest Sharing Percentage in such GP-Related BREP Europe VI Investments;
(B) determine each Partners obligation with respect to the Clawback Amount based on such Partners Carried Interest Give Back Percentage as otherwise provided herein; and
(C) subtract the amount determined in clause (B) above from the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partners share of the Clawback Amount (a Partners Clawback Adjustment Amount).
A Partners share of the Clawback Amount shall for all purposes hereof be decreased by such Partners Clawback Adjustment Amount, to the extent it is a negative number (except to the extent expressly provided below). A Partners share of the Clawback Amount shall for all purposes hereof be increased by such Partners Clawback Adjustment Amount (to the extent it is a positive number); provided, that in no way shall a Partners aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General Partner shall be based on its good faith judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners and in no way modifies the obligations of each Partner regarding the Clawback Amount as provided in the BREP Europe VI Agreements.
Section 5.9. Business Expenses. The Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnerships business in accordance with rules and regulations established by the General Partner from time to time.
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Section 5.10. Tax Capital Accounts; Tax Allocations. (a) For U.S. federal income tax purposes, there shall be established for each Partner a single capital account combining such Partners Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines are appropriate so that such single capital account is maintained in compliance with the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder.
(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for U.S. federal, state and local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a qualified income offset as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that allocations are in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations.
(c) For U.S. federal, state and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations for tax purposes as it determines are appropriate so that allocations have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of the Code and the Treasury Regulations thereunder. To the extent there is an adjustment by a taxing authority to any item of income, gain, loss, deduction or credit of the Partnership (or an adjustment to any Partners distributive share thereof), the General Partner may reallocate the adjusted items among each Partner or former Partner (as determined by the General Partner) in accordance with the final resolution of such audit adjustment.
ARTICLE VI
ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1. Additional Partners. (a) Effective on the first day of any month (or on such other date as shall be determined by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the
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representations and certifications with respect to itself set forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with the additional Partner (which term shall include, without limitation, any substitute Partner) all terms of such additional Partners participation in the Partnership, including the additional Partners initial GP-Related Capital Contribution, Capital Commitment-Related Capital Contribution, GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such voting rights as may be determined by the General Partner from time to time unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any such Special Partner being called a Nonvoting Special Partner). Any additional Partner shall, as a condition to becoming a Partner, agree to become a party to, and be bound by the terms and conditions of, the Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note approved by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partners Investor Note issued to finance such Limited Partners purchase of his or her Capital Commitment Interests, Blackstone or such other or subsequent holder shall succeed to such Limited Partners Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent. Any additional Partner may have a GP-Related Partner Interest or a Capital Commitment Partner Interest, without having the other such interest.
(b) The GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners GP-Related Profit Sharing Percentages as of such date, shall be established by the General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners Capital Commitment Profit Sharing Percentages as of such date, shall be established by the General Partner. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the need for any further act, vote or consent of any person, to make adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional Partners admitted to the Partnership, adjustments with respect to other Partners of the Partnership and to give effect to other matters set forth herein, as applicable.
(c) An additional Partner shall be required to contribute to the Partnership his or her pro rata share of the Partnerships total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not acquire any interests, at such times and in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.
(d) The admission of an additional Partner will be evidenced by (i) the execution of a deed of adherence to this Agreement by such additional Partner and/or such other documentation as may be required by the General Partner, or (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner, if determined by the General Partner, and/or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become an additional Partner and to be bound by the terms of this Agreement and such writing being acceptable to the General Partner on behalf of the Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust Agreement that is acceptable to the General Partner on behalf of the Partnership.
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Section 6.2. Withdrawal of Partners. (a) Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner, including if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business. Without limiting the foregoing sentence, the General Partner generally intends to permit voluntary Withdrawals on the last day of any calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days prior written notice by such Partner to the General Partner (or on such shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may Withdraw from the Partnership with respect to such Partners GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partners Capital Commitment Partner Interest, and a Partner may Withdraw from the Partnership with respect to such Partners Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partners GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
(c) Upon the Total Disability of a Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such persons GP-Related Partner Interest; provided, that the General Partner may elect to admit such Withdrawn Partner to the Partnership as a Nonvoting Special Partner with respect to such persons GP-Related Partner Interest, with such GP-Related Partner Interest as the General Partner may determine. The determination of whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of agreement between the General Partner and such Partner, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
(d) If the General Partner determines that it shall be in the best interests of the Partnership for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such persons GP-Related Partner Interest and/or with respect to such persons Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with respect to such persons GP-Related Partner Interest and/or with respect to such persons Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such persons GP-Related Partner Interest and/or with respect to such persons Capital Commitment Partner Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
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(e) The Withdrawal from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the fullest extent provided by law.
Section 6.3. GP-Related Partner Interests Not Transferable. (a) No Partner may sell, assign, pledge, charge, grant a security interest over or otherwise transfer or encumber all or any portion of such Partners GP-Related Partner Interest other than as permitted by written agreement between such Partner and the Partnership; provided, that subject to the Partnership Act, this Section 6.3 shall not impair transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior written consent of the General Partner, which shall not be unreasonably withheld, a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any estate planning trust, limited partnership, or limited liability company with respect to which a Limited Partner controls investments related to any interest in the Partnership held therein (an Estate Planning Vehicle). Each Estate Planning Vehicle will be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting Special Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with respect to the Partnership (including the obligation to make additional GP-Related Capital Contributions), as the case may be. The General Partner may at its sole option exercisable at any time require any Estate Planning Vehicle to Withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law or otherwise) of the whole or any portion of any Partners GP-Related Partner Interest shall have any right to be a Partner without the prior written consent of the General Partner (which consent may be given or withheld in its sole discretion without giving any reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner Interest in the Partnership may be made except in compliance with the Partnership Act, the laws of the Cayman Islands, and all U.S. federal, state and other applicable laws, including U.S. federal and state securities laws.
Section 6.4. Consequences upon Withdrawal of a Partner. (a) Subject to the Partnership Act, the General Partner may not transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, subject to the Partnership Act, with the prior written approval of a Majority in Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise); provided however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in connection with any liquidation, dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of
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the General Partner under, and its agreeing to be bound by, this Agreement and the filing of a statement pursuant to Section 10(2) of the Partnership Act, such person shall be admitted as the General Partner. A person who is so admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the interest in the Partnership so acquired. The General Partner shall file, or cause to be filed, any statement required to be filed pursuant to Section 10 of the Partnership Act with the Cayman Islands Registrar of Exempted Limited Partnerships to give effect to the provisions of this Section 6.4(a). The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging, charging, or granting of a security interest in its entire Interest in the Partnership.
(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a Partner shall not commence the winding up of or dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners satisfying the requirements of the Partnership Act, and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining Partners being hereby authorized to continue the business of the Partnership without commencement of winding up or dissolution and hereby agreeing to do so). Notwithstanding Section 6.4(c), if upon the Withdrawal of a Partner there shall be no remaining Limited Partners, the Partnership shall be wound up and subsequently dissolved unless, within 90 days after the occurrence of such Withdrawal, all remaining Special Partners agree (including by acting through the power of attorney granted pursuant to Section 10.11) in writing to continue the business of the Partnership and to the appointment, effective to the maximum extent permissible by the Partnership Act, as of the date of such Withdrawal, of one or more Limited Partners satisfying the requirements, and in accordance with, of the Partnership Act.
(c) The Partnership shall not commence winding up or be dissolved, in and of itself, by the Withdrawal of any Partner, but shall continue with the surviving or remaining Partners as partners thereof in accordance with and subject to the terms and provisions of this Agreement.
Section 6.5. Satisfaction and Discharge of a Withdrawn Partners GP-Related Partner Interests. (a) The terms of this Section 6.5 shall apply to the GP-Related Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For purposes of this Section 6.5, the term Settlement Date means the date as of which a Withdrawn Partners GP-Related Partner Interest in the Partnership is settled as determined under paragraph (b) below. Notwithstanding the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion of whose GP-Related Partner Interest is retained as a Special Partner, shall be considered a Withdrawn Partner for all purposes hereof.
(b) Except where a later date for the settlement of a Withdrawn Partners GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partners Settlement Date shall be his or her Withdrawal Date; provided, that if a Withdrawn Partners Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partners Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the interval, if any, between a
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Withdrawn Partners Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions, interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner, with respect to such Withdrawn Partners GP-Related Partner Interest, the General Partner shall promptly after such Withdrawn Partners Settlement Date (i) determine and allocate to the Withdrawn Partners GP-Related Capital Accounts such Withdrawn Partners allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date in accordance with Article V and (ii) credit the Withdrawn Partners GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the General Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Unless otherwise determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or not previously awarded) as of such Withdrawn Partners Withdrawal Date.
(d) From and after the Settlement Date of the Withdrawn Partner, the Withdrawn Partners GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided in paragraph (f) below).
(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partners GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such Partners GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnerships GP-Related Net Income (Loss), or in distributions related to such Partners GP-Related Partner Interest, GP-Related Investments or other assets related to such Partners GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partners GP-Related Partner Interest for any reason other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in satisfaction and discharge in full of the Withdrawn Partners GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partners GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related Investment) and (y) the Withdrawn Partners percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(r) of this Section 6.5. If the amount determined pursuant to clause (x) above is an aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to
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in Section 6.5(i) below; provided, that if the Withdrawn Partner was solely a Special Partner on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the GP-Related Capital Accounts of a Withdrawn Partner who was solely a Special Partner, upon the settlement of such Withdrawn Partners GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners GP-Related Capital Accounts in accordance with their respective GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of such Withdrawn Partners Settlement Date. In the settlement of any Withdrawn Partners GP-Related Partner Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to such Partners GP-Related Partner Interest resulted from such Partners death or Incompetence, such Partners estate or legal representative, as the case may be, may elect, at the time described below, to receive a Nonvoting Special Partner GP-Related Partner Interest and retain such Partners GP-Related Profit Sharing Percentage in all (but not less than all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partners GP-Related Partner Interest. The election referred to above shall be made within 60 days after the Withdrawn Partners Settlement Date, based on a statement of the settlement of such Withdrawn Partners GP-Related Partner Interest in the Partnership pursuant to this Section 6.5.
(f) For purposes of clause (y) of paragraph (e)(i) above, a Withdrawn Partners percentage interest means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable to such GP-Related Investment, in which case such Withdrawn Partner (a Retaining Withdrawn Partner) shall become and remain a Special Partner for such purpose (and, if the General Partner so designates, such Special Partner shall be a Nonvoting Special Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its sole discretion, the General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.
(g) The General Partner may elect, in lieu of payment in cash of any amount payable to a Withdrawn Partner pursuant to paragraph (e) above, to (i) have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or to (ii) distribute in kind to the Withdrawn Partner such Withdrawn Partners pro rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partners GP-
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Related Partner Interest. If any securities or other investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be reduced by the value of such distribution as valued on the latest balance sheet of the Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner.
(h) [Intentionally omitted.]
(i) Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such Withdrawn Partners GP-Related Partner Interest in the Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to such Partner as shall be determined by the General Partner. The General Partner shall submit to the Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement of his or her GP-Related Partner Interest in the Partnership (e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn Partner without examination of the accounting books and records of the Partnership or other inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided, that such Withdrawn Partner shall otherwise rank pari passu in right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
(j) If the aggregate reserves established by the General Partner as of the Settlement Date in making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be.
(k) Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to the date of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The due date of amounts payable by a Withdrawn Partner pursuant to Section 6.5(i) above shall be 120 days after a Withdrawn Partners Settlement Date. The due date of amounts payable to or by a Withdrawn Partner in respect of GP-Related Investments for which the Withdrawn Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment. The due date of any other amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
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(l) At the time of the settlement of any Withdrawn Partners GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the assignment, pledge, charge, grant of a security interest, encumbrance or other transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other investments distributed in kind to such Withdrawn Partner or such Withdrawn Partners right to any payment from the Partnership.
(m) If a Partner is required to Withdraw from the Partnership with respect to such Partners GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in accordance with paragraphs (a)-(r) of this Section 6.5; provided, that the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) In settling the Withdrawn Partners interest in any GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the GP-Related Unrealized Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate balance of such Withdrawn Partners GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his or her GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to such Withdrawn Partner with respect to any GP-Related Investment shall equal such Partners percentage interest of the GP-Related Unrealized Net Income, if any, attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the General Partner). The Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or distribution.
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(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a period not exceeding two years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph (n) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the General Partner) a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
(p) The provisions of this Section 6.5 shall apply to any Investor Special Partner relating to a Limited Partner or Special Partner and to any transferee of any GP-Related Partner Interest of such Partner pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(q) (i) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partners GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(ii) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnerships day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(r) To the extent permitted by applicable law, each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partners true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partners name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5, including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is intended to secure a proprietary interest of the General Partner and the performance of the obligations of each relevant Partner under this Agreement, shall be irrevocable and, to the extent permitted by applicable law, shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
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Section 6.6. Dissolution of the Partnership. The General Partner may wind up and subsequently dissolve the Partnership prior to the expiration of its term at any time on giving not less than 60 days notice of the commencement of winding up to the other Partners and, upon completion of the winding up of the Partnership, by filing a notice pursuant to Section 36(2) of the Partnership Act. Upon the commencement of winding up of the Partnership, the Partners respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in Section 5.10, Section 6.5, Section 8.1 and Article IX.
Section 6.7. Certain Tax Matters. (a) The General Partner shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion.
(b) The General Partner shall cause to be prepared all U.S. federal, state and local tax returns of the Partnership for each year for which such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant jurisdictions as to the treatment of any such item or any other method or procedure related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such item by the Partnership as reflected on the Form K-1 or other information statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the Partnership, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including, without limitation, attorneys, accountants and other experts fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, or (4) appeal, challenge or otherwise protest any adverse findings in any such audit conducted by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any
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Partner selected by the General Partner as the partnership representative (as defined under the Code) (the Tax Matters Partner). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys fees and disbursements, incident to any such breach or violation.
(c) Each individual Partner shall provide to the Partnership copies of each U.S. federal, state and local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(d) To the extent the General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or with respect to any Partner, including pursuant to Section 6225 of the Code (Tax Advances), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on behalf of a Partner shall, at the option of the General Partner, (i) be promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of the Partnership otherwise payable to such Partner. Whenever the General Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon winding up or dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless the Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partners interest.
Section 6.8. Special Basis Adjustments. In connection with any assignment or transfer of a Partnership interest permitted by the terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election to adjust the basis of the Partnerships property in the manner provided in Sections 734(b) and 743(b) of the Code.
ARTICLE VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1. Capital Commitment Interests, etc. (a) This Article VII and Article VIII hereof set forth certain terms and conditions with respect to the Capital Commitment Partner Interests and the Capital Commitment BREP Europe VI Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BREP Europe VI Interest. Except as otherwise expressly provided in this Article VII or in Article VIII, the terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the GP-Related BREP Europe VI Interest.
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(b) Each Partner, severally, agrees to make contributions of capital to the Partnership (Capital Commitment-Related Capital Contributions) as required to fund the Partnerships capital contributions to BREP Europe VI or Associates Europe VI in respect of the Capital Commitment BREP Europe VI Interest, if any, and the related Capital Commitment BREP Europe VI Commitment, if any (including, without limitation, funding all or a portion of the Blackstone Capital Commitment). No Partner shall be obligated to make Capital Commitment-Related Capital Contributions to the Partnership in an amount in excess of such Partners Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters. It is understood that a Partner will not necessarily participate in each Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same Capital Commitment Profit Sharing Percentage with respect to (i) the Partnerships portion of the Blackstone Capital Commitment or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment Agreement or SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain financing with respect to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the terms upon which the Partnership and its Affiliates may provide such financing. The acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partners Capital Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such appropriate documentation as the General Partner may submit to the Partners from time to time.
(c) The Partnership or one of its Affiliates (in such capacity, the Advancing Party) may in its sole discretion advance to any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone) all or any portion of the Capital Commitment-Related Capital Contributions due to the Partnership from such Partner with respect to any Capital Commitment Investment (Firm Advances). Each such Partner shall pay interest to the Advancing Party on each Firm Advance from the date of such Firm Advance until the repayment thereof by such Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon prior written notice by the Advancing Party. The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance, binding on the Partner and the Advancing Party absent manifest error. Except as provided below, the interest rate applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of such Firm Advance. The Advancing Party shall inform any Partner of such rate upon such Partners request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further, that amounts that are otherwise payable to such Partner pursuant to Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances (including the terms contained herein) and/or discontinue the making of Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Partners of any material changes to such terms and (ii) the interest rate applicable to such Firm Advances and overdue amounts thereon shall not exceed the maximum interest rate allowable by applicable law.
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Section 7.2. Capital Commitment Capital Accounts. (a) There shall be established for each Partner in the books of the Partnership as of the date of formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment Interest in a particular Capital Commitment Investment, a Capital Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related Capital Contribution of a Partner shall be credited to the appropriate Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the Partnership. Capital Commitment Capital Accounts shall be adjusted to reflect any transfer of a Partners interest in the Partnership related to his or her Capital Commitment Partner Interest as provided in this Agreement.
(b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore any negative balance in the Capital Commitment Capital Account of such Partner. Until distribution of any such Partners interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership of the related Capital Commitment Investment and in whole upon the winding up and dissolution of the Partnership, neither such Partners Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption except with the consent of the General Partner.
Section 7.3. Allocations. (a) Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partners aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment.
(b) Any special costs relating to distributions pursuant to Section 7.6 or Section 7.7 shall be specially allocated to the electing Partner.
(c) Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
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Section 7.4. Distributions.
(a) Each Partners allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments, distributions to such Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including, without limitation, Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests) during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the General Partner) with any cash amount distributable to such Partner pursuant to clauses (ii) and (vii) below to be distributed, subject to applicable law, within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
(i) First, to the payment of interest then due on all Investor Notes (relating to Capital Commitment Investments or otherwise) of such Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all interest payments due, the selection of those of such Partners Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
(ii) Second, to distribution to the Partner of an amount equal to the U.S. federal, state and local income taxes on income of the Partnership allocated to such Partner for such year in respect of such Partners Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by the General Partner, subject to the limitation that the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners Capital Commitment Partner Interests were all allocated to an individual subject to the then-prevailing maximum rate of U.S. federal, New York State and New York City taxes (including, without limitation, taxes imposed under Section 1411 of the Code), taking into account the character of such taxable income allocated by the Partnership and the limitations on deductibility of expenses and other items for U.S. federal income tax purposes); provided, that additional amounts shall be paid to the Partner pursuant to this clause (ii) to the extent that such amount reduces the amount otherwise distributable to the Partner pursuant to a comparable provision in any other BE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant partnership or other entity; provided further, that amounts paid pursuant to the provisions in such other BE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Partner pursuant to provisions in such other BE Agreements that are comparable to this clause (ii);
(iii) Third, to the payment in full of the principal amount of the Investor Note financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year, to the extent not repaid from Other Sources;
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(iv) Fourth, to the return to such Partner of (A) all Capital Commitment-Related Capital Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any Blackstone Entity (other than the Partnership) in respect of interests therein relating to BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related Investor Notes), to the extent not repaid from amounts of Other Sources (other than amounts of Capital Commitment Partner Carried Interest);
(v) Fifth, to the payment of principal (including any previously deferred amounts) then owing under all other Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partners Investor Notes to be repaid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor;
(vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after application pursuant to clauses (i) through (v) above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partners Investor Notes to be repaid, the division of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and
(vii) Seventh, to such Partner to the extent of any amount of Capital Commitment Net Income remaining after making the distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BE Investment, as applicable, the payments in clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Partner who is no longer an employee or officer of Holdings or an Affiliate thereof, distributions shall be made pursuant to clauses (i) through (iii) above, and then, unless the Partnership or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Partners Capital Commitment Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Partner, until all such Partners Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed to such Partner.
Distributions of Capital Commitment Net Income may be made at any other time at the discretion of the General Partner. At the General Partners discretion, any amounts distributed to a Partner in respect of such Partners Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes for the full period in respect of which the distribution is made.
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(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the remaining principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a Partner that is no longer an employee or officer of Holdings or its Affiliates. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
(d) [Intentionally omitted.]
(e) The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to Section 7.4(a).
(f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital Commitment Investment is being considered by the Partnership or BREP Europe VI (a Capital Commitment Disposable Investment), at the election of the General Partner each Partners Capital Commitment Interest with respect to such Capital Commitment Investment shall be vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partners Capital Commitment Class B Interest), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partners Capital Commitment Class A Interest). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B Interests, and distributions (including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class A Interests.
(g) (i) If (x) the Partnership is obligated under the Giveback Provisions to contribute a Giveback Amount to BREP Europe VI in respect of any Capital Commitment BREP Europe VI Interest that may be held by the Partnership or (y) Associates Europe VI is obligated under the Giveback Provisions to contribute to BREP Europe VI a Giveback Amount with respect to any Capital Commitment BREP Europe VI Interest that may be held by Associates Europe VI and the Partnership is obligated to contribute any such amount to Associates Europe VI in respect of the Partnerships Capital Commitment Associates Europe VI Partner Interest
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(the amount of any such obligation of the Partnership with respect to such a Giveback Amount in the case of either (x) or (y) being herein called a Capital Commitment Giveback Amount), the General Partner shall call for such amounts as are necessary to satisfy such obligation of the Partnership as determined by the General Partner, in which case, each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership with respect to the Capital Commitment BREP Europe VI Interest (the Capital Commitment Recontribution Amount) which equals such Partners pro rata share of prior distributions in connection with (a) the Capital Commitment BREP Europe VI Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause (a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment BREP Europe VI Investments other than the one giving rise to such obligation, and (c) if the Capital Commitment Giveback Amount pursuant to the applicable BREP Europe VI Agreement is unrelated to a specific Capital Commitment BREP Europe VI Investment, all Capital Commitment BREP Europe VI Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such Partners Capital Commitment Recontribution Amount. Prior to such time, the General Partner may, at the General Partners discretion (but shall be under no obligation to), provide notice that in the General Partners judgment, the potential obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate amount of such obligations).
(ii) (A) In the event any Partner (a Capital Commitment Defaulting Party) fails to recontribute all or any portion of such Capital Commitment Defaulting Partys Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Partys obligation to pay such Capital Commitment Defaulting Partys Capital Commitment Recontribution Amount (a Capital Commitment Deficiency Contribution) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect such amount in cash from such Capital Commitment Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback Amount; provided, that no Partner shall as a result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 167% of the amount of the Capital Commitment Recontribution Amount initially requested from such Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital Commitment Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting Party becoming a Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Partys Capital Commitment Recontribution Amount any amounts otherwise payable to the Capital
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Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner becoming a Capital Commitment Defaulting Party, in all accounts receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(B) Any Partners failure to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital Commitment Defaulting Party with respect to such amount.
(iii) A Partners obligation to make contributions to the Partnership under this Section 7.4(g) shall survive the commencement of winding up and subsequent dissolution of the Partnership.
Section 7.5. Valuations. Capital Commitment Investments shall be valued annually as of the end of each year (and at such other times as deemed appropriate by the General Partner) in accordance with the principles utilized by Associates Europe VI (or any other Affiliate of the Partnership that is a general partner of BREP Europe VI) in valuing investments of BREP Europe VI or, in the case of investments not held by BREP Europe VI, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any Capital Commitment Interest as of any date (the Capital Commitment Value) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be determined as of an earlier date if determined appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a Capital Commitment Interest (as compared to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital Commitment Investment. To the full extent permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment Interests held by a person who is or was at any time a direct member or partner of a General Partner of the Partnership.
Section 7.6. Disposition Election. (a) At any time prior to the date of the Partnerships execution of a definitive agreement to dispose of a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such Capital Commitment Investment (as measured by such Partners Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in
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writing prior to such date (i) not to dispose of all or any portion of such Partners pro rata share of such Capital Commitment Investment (the Retained Portion) and (ii) either to (A) distribute such Retained Portion to such Partner on the closing date of such disposition or (B) retain such Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days notice to distribute such Retained Portion to such Partner. Such Partners Capital Commitment Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnerships disposition of other Partners pro rata shares of such Capital Commitment Investment; provided, that such Partners Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of proceeds with respect to a subsequent disposition thereof by the Partnership.
(b) No distribution of such Retained Portion shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such distribution.
Section 7.7. Capital Commitment Special Distribution Election. (a) From time to time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment Investment (as measured by such Partners Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a Capital Commitment Special Distribution). Such Partners Capital Commitment Capital Account shall be adjusted upon distribution of such Capital Commitment Special Distribution.
(b) No Capital Commitment Special Distributions shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL, ADMISSION OF NEW PARTNERS
Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests. (a) Capital Commitment Interests (or a portion thereof) that were financed by Investor Notes will be treated as Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to each Capital Commitment Interest and principal payments on the related Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to such Capital Commitment Interest, the original principal amount of such Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount of the Investor Note. A Partner may prepay a portion of any outstanding principal on the Investor Notes; provided, that in the event that a Partner prepays all or any portion of the principal amount of the Investor Notes within nine months prior to the date on which such Partner is no longer an employee or officer of Holdings or its Affiliates, the Partnership (or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such prepayment; provided further, that the purchase price for such Capital Commitment Interest shall be determined in
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accordance with the determination of the purchase price of a Partners Contingent Capital Commitment Interests as set forth in paragraph (b) below. Prepayments made by a Partner shall apply pro rata against all of such Partners Investor Notes; provided, that such Partner may request that such prepayments be applied only to Investor Notes related to BE Investments that are related to one or more Blackstone Entities specified by such Partner. Except as expressly provided herein, Capital Commitment Interests that were not financed in any respect with Investor Notes shall be treated as Non-Contingent Capital Commitment Interests.
(b) (i) Upon a Partner ceasing to be an officer or employee of the Partnership or any of its Affiliates, other than as a result of such Partner dying or suffering a Total Disability, such Partner and the Partnership or any other person designated by the General Partner shall each have the right (exercisable by the Withdrawn Partner within 30 days and by the Partnership or its designee(s) within 45 days after such Partners ceasing to be such an officer or employee) or any time thereafter, upon 30 days notice, but not the obligation, to require the Partnership (subject to the prior consent of the General Partner, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn Partner) or the Withdrawn Partner to sell (in the case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partners Contingent Capital Commitment Interests.
(ii) The purchase price for each such Contingent Capital Commitment Interest shall be an amount equal to (A) the outstanding principal amount of the related Investor Note plus accrued interest thereon to the date of purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the Adjustment Amount) equal to (x) all interest paid by the Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to be repurchased, plus (y) all Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on the Contingent portion of such Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the Adjustment Amount, in the General Partners sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next Capital Commitment Net Income received by such holders on the Contingent portion of such Withdrawn Partners Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall be payable to the holders of the purchased Capital Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn Partners Capital Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner, or (B) if the Partnership or its designee(s) elect to purchase such Withdrawn Partners Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the Partnership and its Affiliates may offset any amounts otherwise owing to a Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so paid, such remaining Adjustment Amount will not itself bear interest. At the time of such purchase of the Withdrawn Partners Contingent Capital Commitment Interests, his or her related Investor Note shall be payable in full.
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(iii) Upon such Partner ceasing to be such an officer or employee, all Investor Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of the Withdrawn Partners Contingent Capital Commitment Interests).
(iv) If neither the Withdrawn Partner nor the Partnership nor its designee(s) exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the Investor Notes shall remain outstanding, shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedules and shall be prepayable at any time by the Withdrawn Partner at his or her option, and the Partnership shall apply such prepayments against outstanding Investor Notes on a pro rata basis.
(v) To the extent that another Partner purchases a portion of a Capital Commitment Interest of a Withdrawn Partner, the purchasing Partners Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased.
(c) Upon the occurrence of a Final Event with respect to any Partner, such Partner shall thereupon cease to be a Partner with respect to such Partners Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Partner shall for any purpose hereof become or be deemed to become a Partner. The sole right, as against the Partnership and the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such Partners Capital Commitment Partner Interest pursuant to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or Section 8.1(d)), to the extent, at the time, in the manner and in the amount otherwise payable to such Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in Interest to such Partner, whether by operation of law or otherwise and the Partnership shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder. Until distribution of any such Partners interest in the Partnership upon the winding up of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption without the consent of the General Partner. The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such Partners Capital Commitment Partner Interest.
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(d) If a Partner dies or suffers a Total Disability, all Contingent Capital Commitment Interests of such Partner shall be purchased by the Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Partners death or Total Disability) (and the purchase price for such Contingent Capital Commitment Interests shall be determined in accordance with Section 8.1(b) (except that any Adjustment Amount shall be payable by or to such Partners estate, personal representative or other Successor in Interest, in cash)), and any Investor Notes financing such Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Partners death or Total Disability, any Investor Note(s) financing such Contingent Capital Commitment Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Partner, if the estate, personal representative or other Successor in Interest of such Partner, so requests in writing within 180 days after the Partners death or ceasing to be an employee or member (directly or indirectly) of the Partnership or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership or its designee may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Partner as of the last day of the Partnerships then current Fiscal Year at a price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of this Agreement. In addition, the Partnership may, in the sole discretion of the General Partner, upon notice to the estate, personal representative or other Successor in Interest of such Partner, within 30 days of the first date on which the General Partner knows or has reason to know of such Partners death or Total Disability, determine either (i) to distribute Securities or other property to the estate, personal representative or other Successor in Interest, in exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.
(e) In lieu of retaining a Withdrawn Partner as a Partner with respect to any Non-Contingent Capital Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the Partnership or any of its Affiliates, or at any time thereafter, upon 30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partners Non-Contingent Capital Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her Non-Contingent Capital Commitment Interests in the Partnership or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion), the Partnership or another person designated by the General Partner (who may be itself another Partner or another Affiliate of the Partnership) to purchase all (but not less than all) of such Withdrawn Partners Non-Contingent Capital Commitment Interests for a price equal to the Capital Commitment Value thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of purchase). The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph (d) above or this paragraph (e) upon the Withdrawn Partners execution and delivery to the Partnership of an appropriate irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
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(f) The Partnership may subsequently transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital Commitment Interest or portion thereof by the General Partners designee(s), Holdings may loan all or a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is an executive officer of The Blackstone Group Inc. or any Affiliate thereof). To the extent that a Withdrawn Partners Capital Commitment Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner, (i) be allocated to each Partner already participating in the Capital Commitment Investment to which the repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already participating in such Capital Commitment Investment, and/or (iii) continue to be held by the Partnership itself as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called Unallocated Capital Commitment Interests). To the extent that a Capital Commitment Interest is allocated to Partners as provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be allocated to such Partners. All such Capital Commitment Interests allocated to Partners shall be deemed to be Contingent and shall become Non-Contingent as and to the extent that the principal amount of such related indebtedness is repaid. The Partners receiving such allocations shall be responsible for such related indebtedness only on a nonrecourse basis to the extent appropriate as provided in this Agreement, except as otherwise provided in this Section 8.1 and except as such Partners and the General Partner shall otherwise agree; provided, that such indebtedness shall become fully recourse to the extent and at the time provided in this Section 8.1. If the indebtedness financing such repurchased interests is not to be non-recourse or so limited, the Partnership may require an assumption by the Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to such Partners; provided, that a Partner shall not, except as set forth in his or her Investor Note(s), be obligated to accept any obligation that is personally recourse (except as provided in this Section 8.1), unless his or her prior consent is obtained. So long as the Partnership itself retains the Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness financing the Unallocated Capital Commitment Interests shall be an obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income (Loss) on an Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt service on such related financing will be an expense of the Partnership allocable to all Partners in such proportions.
(g) If a Partner is required to Withdraw from the Partnership with respect to such Partners Capital Commitment Partner Interest for Cause, then his or her Capital Commitment Interest shall be settled in accordance with paragraphs (a)-(f) and (j) of this Section 8.1; provided, that if such Partner was not at any time a direct partner of a General Partner of the Partnership, the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
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(i) purchase for cash all of such Withdrawn Partners Non-Contingent Capital Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of (A) the original cost of such Non-Contingent Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date of the purchase of such Non-Contingent Capital Commitment Interest);
(ii) allow the Withdrawn Partner to retain such Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to any Capital Commitment Investment shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing Capital Commitment Value thereof; or
(iii) in lieu of cash, purchase such Non-Contingent Capital Commitment Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten (10) years with interest at the Federal Funds Rate.
(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partners Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(i) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnerships day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) To the extent permitted by applicable law, each Partner hereby irrevocably appoints the General Partner as such Partners true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partners name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 8.1, including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is intended to secure an interest in property, and, in addition, the obligations of each relevant Limited Partner under this Agreement and, to the extent permitted by applicable law, shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
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Section 8.2. Transfer of Partners Capital Commitment Interest. Except as otherwise agreed by the General Partner, no Partner or former Partner shall have the right to sell, assign, mortgage, pledge, charge, grant a security interest over, or otherwise dispose of or transfer (Transfer) all or part of any such Partners Capital Commitment Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above and subject to the Partnership Act, in the case of the purchase of a Withdrawn Partners or Deceased or Totally Disabled Partners Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Partner to another Partner of Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the General Partner (which consent may be granted or withheld in its sole discretion without giving any reason therefor) and (iv) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers of up to 25% of a Limited Partners Capital Commitment Partner Interest to an Estate Planning Vehicle (it being understood that it shall not be unreasonable for the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in connection with any such Transfer, including, for example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership). Each Estate Planning Vehicle shall not have voting rights (any such Partner being called a Nonvoting Partner). Such Partner shall be jointly and severally liable for all obligations of both such Partner and such Nonvoting Partner with respect to the interest transferred (including the obligation to make additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the Partnership on the terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Partner of the Partnership, or acquire such Partners right to participate in the affairs of the Partnership, unless such person shall be admitted as a Partner pursuant to Section 6.1. A Partner shall not cease to be a Partner of the Partnership upon the collateral assignment of, or the pledging or granting of a security interest in, its entire Interest in the Partnership in accordance with the provisions of this Agreement.
Section 8.3. Compliance with Law. Notwithstanding any provision hereof to the contrary, no sale or Transfer of a Capital Commitment Interest in the Partnership may be made except in compliance with the Partnership Act, the laws of the Cayman Islands and all U.S. federal, state and other applicable laws, including U.S. federal and state securities laws.
ARTICLE IX
DISSOLUTION
Section 9.1. Dissolution. The Partnership shall commence winding up and be subsequently dissolved pursuant to this Article IX and Section 36(1) the Partnership Act:
(a) pursuant to Section 6.6;
(b) the making of an order by the courts of the Cayman Islands to commence winding up the Partnership; or
(c) upon the expiration of the term of the Partnership.
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Section 9.2. Final Distribution. Upon the commencement of winding up of the Partnership, and following the payment of creditors of the Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act:
(a) The Partners respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in Section 6.5 which provide for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the GP-Related Capital Account balances of the Partners; and
(b) With respect to each Partners Capital Commitment Partner Interest, an amount shall be paid to such Partner in cash or Securities in an amount equal to such Partners respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment; and the remaining assets of the Partnership related to the Partners Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for each Capital Commitment Investment from which such cash or Securities are derived.
(c) The General Partner shall be the liquidator. In the event that the General Partner is unable to serve as liquidator, a liquidating trustee shall be chosen by the affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special Partners).
Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests. (a) If there are any Securities or other property or other investments or securities related to the Partners Capital Commitment Partner Interests which, in the judgment of the liquidator, cannot be sold, or properly distributed in kind in the case of dissolution, without sacrificing a significant portion of the value thereof, the value of a Partners interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners participating in the related Capital Commitment Investment pursuant to Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other investments or securities so excluded shall not be paid or distributed until such time as the liquidator shall determine.
(b) If there is any pending transaction, contingent liability or claim by or against the Partnership related to the Partners Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the liquidator, be then ascertained, the value thereof or probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any such transaction or claim until its final settlement or such earlier time as the liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partners Capital Commitment Partner Interest an amount which the liquidator estimates to be sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.
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(c) Upon determination by the liquidator that circumstances no longer require the exclusion of any Securities or other property or retention of sums as provided in paragraphs (a) and (b) of this Section 9.3, the liquidator shall, at the earliest practicable time, distribute as provided in Section 9.2(b) such sums or such Securities or other property or the proceeds realized from the sale of such Securities or other property to each Partner from whom such sums or Securities or other property were withheld.
(d) When the General Partner or other liquidator has complied with and completed the winding up of the Partnership, the General Partner or such other liquidator, on behalf of all Partners, shall execute, acknowledge and cause to be filed with the Registrar a notice of dissolution in accordance with the Partnership Act.
ARTICLE X
MISCELLANEOUS
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the winding up or dissolution of the Partnership), whether arising during the existence of the Partnership or during or after the winding up or dissolution of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A., in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within 30 days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings.
(b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate, and (iii) irrevocably appoints the General Partner as such Partners agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
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(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s) designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the Delaware Arbitration Act). If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
Section 10.2. Ownership and Use of the Blackstone Name. The Partnership acknowledges that Blackstone TM L.L.C. (TM), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors, successors or assigns) has licensed the Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the permission of TM. All services rendered by the Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and its Affiliates and licensees. The Partnership understands that TM may terminate its right to use BLACKSTONE at any time in TMs sole discretion by giving the Partnership written notice of termination. Promptly following any such termination, the Partnership will take all steps necessary to change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or otherwise.
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Section 10.3. Written Consent. Subject to applicable law, any action required or permitted to be taken by a vote of Partners at a meeting may be taken without a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 10.4. Letter Agreements; Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered into separate letter agreements with individual Partners, officers or employees with respect to GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such separate letter agreement, including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners schedules which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD Agreement.
Section 10.5. Governing Law; Separability of Provisions. This Agreement shall be governed by and construed in accordance with the laws of the Cayman Islands, without regard to principles of conflicts of law. In particular, the Partnership is registered as an exempted limited partnership pursuant to the Partnership Act, and the rights, duties and liabilities of the General Partner, Limited Partners and the Special Partners shall be as provided therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement shall not be affected thereby. Unless the context otherwise requires, any reference to any law, regulation, governmental entity or agency or such survivor concepts shall be with respect to any jurisdiction, whether Cayman Islands, U.S. or otherwise.
Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a party hereto; provided, that no person claiming by, through or under a Partner (whether such Partners heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn Partner shall remain liable for the obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such Partners or Withdrawn Partners interest in the Partnership, unless waived by the General Partner. The
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Partnership shall, if the General Partner determines in its good faith judgment, based on the standards set forth in Section 5.8(d)(ii)(A) and
Section 7.4(g)(ii)(A), to pursue
such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or Capital Commitment Recontribution Amounts) from the transferee with respect to any such obligations. Nothing in this
Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal representatives, heirs, successors and permitted assigns. Notwithstanding the
foregoing, solely to the extent required by the BREP Europe VI Agreements, (x) the limited partners in BREP Europe VI shall be third-party beneficiaries of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the
definitions relating thereto), solely as they relate to any Clawback Amount or Interim Clawback Amount (for purpose of this sentence, as defined in paragraphs 4.2.9(b) or 9.2.7(b), as applicable, of the BREP Europe VI Partnership Agreement), and
(y) the amendment of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount or Interim Clawback Amount (for purpose of this sentence, as
defined in paragraphs 4.2.9(b) or 9.2.7(c), as applicable, of the BREP Europe VI Partnership Agreement), shall be effective against such limited partners only with a Combined Limited Partner Consent (as such term is defined in the BREP Europe VI
Partnership Agreement) unless such amendment does not adversely affect such limited partners rights under paragraph 9.2.7 of the BREP Europe VI Partnership Agreement.
Section 10.7. Confidentiality. (a) By executing this Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any person other than the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership that shall not be generally known to the public or the securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, that any corporate Partner may disclose any such information it is required by law, rule, regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information.
(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating, cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a Governmental Entity), including, but not limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation; provided, that in each case such communications and disclosures are consistent with applicable law. Each Partner
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understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates attorney-client privilege or attorney work product or Blackstones trade secrets without the prior written consent of Blackstone.
Section 10.8. Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing (including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the Partnerships books and records or, if given to the General Partner, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch, and (ii) if given by hand delivery, when delivered to the address of such Partner, the General Partner or the Partnership specified as aforesaid. Sections 8 and 19(3) of the Electronic Transactions Law (2003 Revision) of the Cayman Islands shall not apply to this Agreement.
Section 10.9. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute a single instrument.
Section 10.10. Power of Attorney. Each Partner hereby irrevocably appoints the General Partner as such Partners true and lawful representative and attorney-in-fact, each acting alone, in such Partners name, place and stead, to make, execute, sign and file all instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the Cayman Islands, the State of Delaware or any other state or country in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney is intended to secure a proprietary interest of the General Partner and the performance of the obligations of each relevant Limited Partner under this Agreement, shall be irrevocable and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the subsequent disability or incapacity of such Partner.
81
Section 10.11. Partners Will. Each Partner and Withdrawn Partner shall include in his or her will a provision that addresses certain matters in respect of his or her obligations relating to the Partnership that is satisfactory to the General Partner and each such Partner and Withdrawn Partner shall confirm annually to the Partnership, in writing, that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Partners or Withdrawn Partners Interest is transferred shall include a provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Partner or Withdrawn Partner fails to comply with the provisions of this Section 10.11 after the Partnership has notified such Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of such notice, the Partnership may withhold any and all distributions to such Partner until the time at which such party complies with the requirements of this Section 10.11.
Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other rights and remedies available under applicable law.
Section 10.13. Legal Fees. Except as more specifically provided herein, in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision of this Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net GP-Related Recontribution Amount or the Capital Commitment Recontribution Amount, the losing party to such dispute shall promptly reimburse the victorious party for all reasonable legal fees and expenses incurred in connection with such dispute (such determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date shall accrue interest at the Default Interest Rate.
Section 10.14. Entire Agreement; Modifications. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. Except as provided herein, this Agreement may be amended or modified at any time by the General Partner in its sole discretion, upon notification thereof to the Limited Partners.
Section 10.15. Effective Date. Notwithstanding the date of execution of this Agreement, each of the parties agrees that their respective rights, duties and obligations pursuant to this Agreement shall have effect from May 8, 2019, as between the parties, and the parties agree to account to each other accordingly.
Section 10.16. Third Party Rights.
(a) Any Covered Person not being a party to this Agreement may enforce any rights granted to it pursuant to this Agreement in its own right as if it were a party to this Agreement.
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(b) Except as expressly provided in paragraph (a) above, a person who is not a party to this Agreement shall not have any rights under the Contracts (Rights of Third Parties) Law (as amended) to enforce any term of this Agreement.
(c) Notwithstanding any term of this Agreement, the consent of or notice to any person who is not a party to this Agreement shall not be required for any termination, rescission or agreement to any variation, waiver, assignment, novation, release or settlement under this Agreement at any time.
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IN WITNESS WHEREOF, the parties have executed and unconditionally delivered this Agreement as a deed on the day and year first above written. In the event that it is impracticable to obtain the signature of any one or more of the Partners to this Agreement, this Agreement shall be binding among the other Partners executing the same.
GENERAL PARTNER: | ||
BLACKSTONE REAL ESTATE ASSOCIATES EUROPE (DELAWARE) VI L.L.C. | ||
By: Blackstone Holdings IV L.P. | ||
By: Blackstone Holdings IV GP L.P., its General Partner | ||
By: Blackstone Holdings IV GP Management L.L.C., its General Partner | ||
By: |
/s/ John G. Finley |
|
Name: | John G. Finley | |
Title: | Chief Legal Officer and Secretary |
/s/ Sita Reyes |
||
Witnessed by: | Sita Reyes |
[Signature Page to Amended and Restated Exempted Agreement of Limited Partnership Agreement of BREA Europe VI (Cayman) L.P.]
LIMITED PARTNERS AND SPECIAL PARTNERS: | ||
Limited Partners and Special Partners now and hereafter admitted pursuant to powers of attorney granted to Blackstone Real Estate Associates Europe (Delaware) VI L.L.C. pursuant to powers of attorney executed by such Limited Partners | ||
BLACKSTONE REAL ESTATE ASSOCIATES EUROPE (DELAWARE) VI L.L.C. | ||
By: Blackstone Holdings IV L.P. | ||
By: Blackstone Holdings IV GP L.P., its General Partner | ||
By: Blackstone Holdings IV GP Management L.L.C., its General Partner | ||
By: |
/s/ John G. Finley |
|
Name: | John G. Finley | |
Title: | Chief Legal Officer and Secretary |
/s/ Sita Reyes |
||
Witnessed by: | Sita Reyes |
[Signature Page to Amended and Restated Exempted Agreement of Limited Partnership Agreement of BREA Europe VI (Cayman) L.P.]
INITIAL LIMITED PARTNER: | ||
MAPCAL LIMITED | ||
As Initial Limited Partner, solely to reflect its Withdrawal from the Partnership | ||
By: |
/s/ Stef Dimitriou |
|
Name: | Stef Dimitriou | |
Title: | Authorised Signatory |
/s/ Michelle Lockwood |
||
Witnessed by: | Michelle Lockwood |
[Signature Page to Amended and Restated Exempted Agreement of Limited Partnership Agreement of BREA Europe VI (Cayman) L.P.]
Exhibit 10.106
Execution Version
HIGHLY CONFIDENTIAL & TRADE SECRET
BREA IX (DELAWARE) L.P.
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
DATED AS OF FEBRUARY 26, 2020
EFFECTIVE AS OF DECEMBER 21, 2018
THE LIMITED PARTNERSHIP INTERESTS (THE INTERESTS) OF BREA IX (DELAWARE) L.P. (THE PARTNERSHIP) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), THE SECURITIES LAWS OF ANY STATE IN THE UNITED STATES OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THE INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT. THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
Page | ||||
ARTICLE I DEFINITIONS |
1 | |||
Section 1.1. Definitions |
1 | |||
Section 1.2. Terms Generally |
17 | |||
ARTICLE II GENERAL PROVISIONS |
17 | |||
Section 2.1. General Partner, Limited Partner, Special Partner |
17 | |||
Section 2.2. Formation; Name; Foreign Jurisdictions |
18 | |||
Section 2.3. Term |
18 | |||
Section 2.4. Purposes; Powers |
18 | |||
Section 2.5. Place of Business |
21 | |||
Section 2.6. Withdrawal of Initial Limited Partner |
21 | |||
ARTICLE III MANAGEMENT |
21 | |||
Section 3.1. General Partner |
21 | |||
Section 3.2. Partner Voting, etc. |
21 | |||
Section 3.3. Management |
22 | |||
Section 3.4. Responsibilities of Partners |
24 | |||
Section 3.5. Exculpation and Indemnification |
25 | |||
Section 3.6. Representations of Partners |
27 | |||
Section 3.7. Tax Representation and Further Assurances |
27 | |||
ARTICLE IV CAPITAL OF THE PARTNERSHIP |
29 | |||
Section 4.1. Capital Contributions by Partners |
29 | |||
Section 4.2. Interest |
36 | |||
Section 4.3. Withdrawals of Capital |
36 | |||
ARTICLE V PARTICIPATION IN PROFITS AND LOSSES |
37 | |||
Section 5.1. General Accounting Matters |
37 | |||
Section 5.2. GP-Related Capital Accounts |
38 | |||
Section 5.3. GP-Related Profit Sharing Percentages |
39 | |||
Section 5.4. Allocations of GP-Related Net Income (Loss) |
40 | |||
Section 5.5. Liability of Partners |
41 | |||
Section 5.6. [Intentionally omitted.] |
41 | |||
Section 5.7. Repurchase Rights, etc. |
41 | |||
Section 5.8. Distributions |
41 | |||
Section 5.9. Business Expenses |
48 | |||
Section 5.10. Tax Capital Accounts; Tax Allocations |
49 | |||
ARTICLE VI ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS; SATISFACTION AND DISCHARGE OF PARTNERSHIP INTERESTS; TERMINATION |
50 | |||
Section 6.1. Additional Partners |
50 | |||
Section 6.2. Withdrawal of Partners |
51 | |||
Section 6.3. GP-Related Partner Interests Not Transferable |
52 |
i
TABLE OF CONTENTS
(continued)
Page | ||||
Section 6.4. Consequences upon Withdrawal of a Partner |
53 | |||
Section 6.5. Satisfaction and Discharge of a Withdrawn Partners GP-Related Partner Interests |
53 | |||
Section 6.6. Dissolution of the Partnership |
59 | |||
Section 6.7. Certain Tax Matters |
59 | |||
Section 6.8. Special Basis Adjustments |
60 | |||
ARTICLE VII CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS; ALLOCATIONS; DISTRIBUTIONS |
61 | |||
Section 7.1. Capital Commitment Interests, etc. |
61 | |||
Section 7.2. Capital Commitment Capital Accounts |
62 | |||
Section 7.3. Allocations |
62 | |||
Section 7.4. Distributions |
63 | |||
Section 7.5. Valuations |
67 | |||
Section 7.6. Disposition Election |
68 | |||
Section 7.7. Capital Commitment Special Distribution Election |
68 | |||
ARTICLE VIII WITHDRAWAL, ADMISSION OF NEW PARTNERS |
68 | |||
Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests |
68 | |||
Section 8.2. Transfer of Partners Capital Commitment Interest |
74 | |||
Section 8.3. Compliance with Law |
74 | |||
ARTICLE IX DISSOLUTION |
75 | |||
Section 9.1. Dissolution |
75 | |||
Section 9.2. Final Distribution |
75 | |||
Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests |
75 | |||
ARTICLE X MISCELLANEOUS |
76 | |||
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial |
76 | |||
Section 10.2. Ownership and Use of the Blackstone Name |
77 | |||
Section 10.3. Written Consent |
78 | |||
Section 10.4. Letter Agreements; Schedules |
78 | |||
Section 10.5. Governing Law; Separability of Provisions |
78 | |||
Section 10.6. Successors and Assigns; Third Party Beneficiaries |
78 | |||
Section 10.7. Confidentiality |
79 | |||
Section 10.8. Notices |
80 | |||
Section 10.9. Counterparts |
80 | |||
Section 10.10. Power of Attorney |
80 | |||
Section 10.11. Partners Will |
80 | |||
Section 10.12. Cumulative Remedies |
81 | |||
Section 10.13. Legal Fees |
81 | |||
Section 10.14. Entire Agreement; Modifications |
81 |
ii
BREA IX (DELAWARE) L.P.
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of BREA IX (Delaware) L.P., a Delaware limited partnership (the Partnership), dated as of February 26, 2020, and effective as of December 21, 2018, by and among BREA IX L.L.C., a Delaware limited liability company, as general partner of the Partnership (in its capacity as general partner of the Partnership (the General Partner), Patrick Kassen, as initial limited partner (the Initial Limited Partner), the limited partners listed as Limited Partners in the books and records of the Partnership), and such other persons that are admitted to the Partnership as partners after the date hereof in accordance herewith.
W I T N E S S E T H
WHEREAS, the Partnership was formed pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. § 17-101, et seq., as it may be amended from time to time (the Partnership Act), pursuant to a certificate of limited partnership filed in the office of the Secretary of State of the State of Delaware on June 26, 2018;
WHEREAS, the General Partner and the Initial Limited Partner entered into a Limited Partnership Agreement dated as of June 26, 2018 (the Original Agreement); and
WHEREAS, the parties hereto desire to enter into this Amended and Restated Limited Partnership Agreement, and hereby amend and restate the Original Agreement in its entirety and reflect the withdrawal of the Initial Limited Partner, in each case effective on December 21, 2018;
NOW, THEREFORE, in consideration of the mutual promises and agreements herein made and intending to be legally bound hereby, the parties hereto agree that the Original Agreement shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:
Adjustment Amount has the meaning set forth in Section 8.1(b)(ii).
Advancing Party has the meaning set forth in Section 7.1(c).
Affiliate when used with reference to another person means any person (other than the Partnership), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other person, which may include, for greater certainty and as the context requires, endowment funds, estate planning vehicles (including any trusts, family members, family investment vehicles, descendant, trusts and other related persons and entities), charitable programs and other similar and/or related vehicles or accounts associated with or established by Blackstone and/or its affiliates, partners and current and/or former employees and/or related persons.
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Agreement means this Amended and Restated Limited Partnership Agreement, as it may be further amended, supplemented, restated or otherwise modified from time to time.
Applicable Collateral Percentage with respect to any Firm Collateral or Special Firm Collateral, has the meaning set forth in the books and records of the Partnership with respect thereto.
Associates IX means Blackstone Real Estate Associates IX L.P., a Delaware limited partnership and the general partner of BREP IX, or any other entity that serves as the general partner, special general partner or managing member of a vehicle indicated in the definition of BREP IX.
Associates IX LP Agreement means the limited partnership agreement, dated as of the date set forth therein, of Associates IX, as it may be amended, supplemented, restated or otherwise modified from time to time.
Bankruptcy means, with respect to any person, the occurrence of any of the following events: (i) the filing of an application by such person for, or a consent to, the appointment of a trustee or custodian of his or her assets; (ii) the filing by such person of a voluntary petition in Bankruptcy or the seeking of relief under Title 11 of the United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing his or her inability to pay his or her debts as they become due; (iii) the failure of such person to pay his or her debts as such debts become due; (iv) the making by such person of a general assignment for the benefit of creditors; (v) the filing by such person of an answer admitting the material allegations of, or his or her consenting to, or defaulting in answering, a Bankruptcy petition filed against him or her in any Bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or (vi) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such person a bankrupt or insolvent or for relief in respect of such person or appointing a trustee or custodian of his or her assets and the continuance of such order, judgment or decree unstayed and in effect for a period of 60 consecutive days.
BE Agreement means the limited partnership agreement, limited liability company agreement or other governing document of any limited partnership, limited liability company or other entity referred to in the definition of Blackstone Entity, as such limited partnership agreement, limited liability company agreement or other governing document may be amended, supplemented, restated or otherwise modified to date, and as such limited partnership agreement, limited liability company agreement or other governing document may be further amended, supplemented, restated or otherwise modified from time to time.
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BE Investment means any direct or indirect investment by any Blackstone Entity.
Blackstone means, collectively, The Blackstone Group Inc., a Delaware corporation, and any successor thereto, and any Affiliate thereof (excluding any natural persons and any portfolio companies, investments or similar entities of any Blackstone-sponsored fund (or any affiliate thereof that is not otherwise an Affiliate of The Blackstone Group Inc.)).
Blackstone Capital Commitment has the meaning set forth in the BREP IX Partnership Agreement.
Blackstone Entity means any partnership, limited liability company or other entity (excluding any natural persons and any portfolio companies of any Blackstone-sponsored fund) that is an Affiliate of The Blackstone Group Inc., as designated by the General Partner in its sole discretion.
BREP IX means (i) Blackstone Real Estate Partners IX L.P., Blackstone Real Estate Partners IX.TE.1 L.P., Blackstone Real Estate Partners IX.TE.2 L.P., Blackstone Real Estate Partners IX.TE.3 L.P. and Blackstone Real Estate Partners IX.F L.P., each a Delaware limited partnership, Blackstone Real Estate Partners IX (Ontario) L.P., an Ontario limited partnership and Blackstone Real Estate Partners IX (Lux) SCSp, a Luxembourg special limited partnership (société en commandite spéciale) established under the laws of the Grand Duchy of Luxembourg, (ii) any other Alternative Vehicles, Parallel Funds or other Supplemental Capital Vehicles (each as defined in the respective partnership agreements for the partnerships referred to in clause (i) of this definition), (iii) any other investment vehicle established pursuant to Article II of the respective partnership agreements for any of the partnerships referred to in clause (i) of this definition, and (iv) any other limited partnership, limited liability company or other entity (in each case, whether now or hereafter established) of which Associates IX or the Partnership serves, directly or indirectly, as the general partner, special general partner, manager, managing member or in a similar capacity.
BREP IX Agreements is the collective reference to the BREP IX Partnership Agreement and any governing agreement of any of the partnerships or other entities referred to in clauses (ii), (iii) or (iv) of the definition of BREP IX.
BREP IX Partnership Agreement means the partnership agreements of the limited partners named in clause (i) of the definition of BREP IX, as they may be amended, supplemented, restated or otherwise modified from time to time.
Business Day means any day other than a Saturday, Sunday or other day on which banks are authorized or required by law to be closed in New York, New York.
Capital Commitment Associates IX Partner Interest means the interest of the Partnership, if any, as a limited partner of Associates IX with respect to any Capital Commitment BREP IX Interest that may be held by Associates IX.
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Capital Commitment BREP IX Commitment means the Capital Commitment (as defined in the BREP IX Partnership Agreement), if any, of the Partnership or Associates IX to BREP IX that relates solely to the Capital Commitment BREP IX Interest, if any.
Capital Commitment BREP IX Interest means the Interest (as defined in the BREP IX Partnership Agreement), if any, of the Partnership or Associates IX as a capital partner in BREP IX.
Capital Commitment BREP IX Investment means the Partnerships interest in a specific investment of BREP IX, which interest may be held by the Partnership (i) through the Partnerships direct interest in BREP IX through the Partnerships Capital Commitment BREP IX Interest, if the Partnership holds the Capital Commitment BREP IX Interest, or (ii) through the Partnerships interest in Associates IX and Associates IXs interest in BREP IX through Associates IXs Capital Commitment BREP IX Interest, if Associates IX holds the Capital Commitment BREP IX Interest.
Capital Commitment Capital Account means, with respect to each Capital Commitment Investment for each Partner, the account maintained for such Partner to which are credited such Partners contributions to the Partnership with respect to such Capital Commitment Investment and any net income allocated to such Partner pursuant to Section 7.3 with respect to such Capital Commitment Investment and from which are debited any distributions with respect to such Capital Commitment Investment to such Partner and any net losses allocated to such Partner with respect to such Capital Commitment Investment pursuant to Section 7.3. In the case of any such distribution in kind, the Capital Commitment Capital Accounts for the related Capital Commitment Investment shall be adjusted as if the asset distributed had been sold in a taxable transaction and the proceeds distributed in cash, and any resulting gain or loss on such sale shall be allocated to the Partners participating in such Capital Commitment Investment pursuant to Section 7.3.
Capital Commitment Class A Interest has the meaning set forth in Section 7.4(f).
Capital Commitment Class B Interest has the meaning set forth in Section 7.4(f).
Capital Commitment Defaulting Party has the meaning set forth in Section 7.4(g)(ii)(A).
Capital Commitment Deficiency Contribution has the meaning set forth in Section 7.4(g)(ii)(A).
Capital Commitment Disposable Investment has the meaning set forth in Section 7.4(f).
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Capital Commitment Distributions means, with respect to each Capital Commitment Investment, all amounts of distributions received by the Partnership with respect to such Capital Commitment Investment solely in respect of the Capital Commitment BREP IX Interest, if any, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of such Capital Commitment Investment as it may determine in good faith is appropriate.
Capital Commitment Giveback Amount has the meaning set forth in Section 7.4(g)(i).
Capital Commitment Interest means the interest of a Partner in a specific Capital Commitment Investment as provided herein.
Capital Commitment Investment means any Capital Commitment BREP IX Investment, but shall exclude any GP-Related Investment.
Capital Commitment Liquidating Share means, with respect to each Capital Commitment Investment, in the case of dissolution of the Partnership, the related Capital Commitment Capital Account of a Partner (less amounts reserved in accordance with Section 9.3) immediately prior to dissolution.
Capital Commitment Net Income (Loss) means, with respect to each Capital Commitment Investment, all amounts of income received by the Partnership with respect to such Capital Commitment Investment, including without limitation gain or loss in respect of the disposition, in whole or in part, of such Capital Commitment Investment, less any costs, fees and expenses of the Partnership allocated thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership anticipated to be allocated thereto.
Capital Commitment Partner Carried Interest means, with respect to any Partner, the aggregate amount of distributions or payments received by such Partner (in any capacity) from Affiliates of the Partnership in respect of or relating to carried interest. Capital Commitment Partner Carried Interest includes any amount initially received by an Affiliate of the Partnership from any fund (including BREP IX, any similar funds formed after the date hereof, and any Other Blackstone Funds (as defined in the BREP IX Partnership Agreement), whether or not in existence as of the date hereof) to which such Affiliate serves as general partner (or in another similar capacity) that exceeds such Affiliates pro rata share of distributions from such fund based upon capital contributions thereto (or the capital contributions to make the investment of such fund giving rise to such carried interest).
Capital Commitment Partner Interest means a Partners interest in the Partnership which relates (i) to any Capital Commitment BREP IX Interest held by the Partnership or (ii) through the Partnership and Associates IX, to any Capital Commitment BREP IX Interest that may be held by Associates IX.
Capital Commitment Profit Sharing Percentage means, with respect to each Capital Commitment Investment, the percentage interest of a Partner in Capital Commitment Net Income (Loss) from such Capital Commitment Investment set forth in the books and records of the Partnership.
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Capital Commitment Recontribution Amount has the meaning set forth in Section 7.4(g)(i).
Capital Commitment-Related Capital Contributions has the meaning set forth in Section 7.1(b).
Capital Commitment-Related Commitment means, with respect to any Partner, such Partners commitment to the Partnership relating to such Partners Capital Commitment Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partners Commitment Agreement or SMD Agreement, if any.
Capital Commitment Special Distribution has the meaning set forth in Section 7.7(a).
Capital Commitment Value has the meaning set forth in Section 7.5.
Carried Interest means (i) Carried Interest Distributions as defined in the BREP IX Partnership Agreement, and (ii) any other carried interest distribution to a Fund GP pursuant to any BREP IX Agreement. In the case of each of (i) and (ii) above, except as determined by the General Partner, the amount shall not be less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto (in each case which the General Partner may allocate among all or any portion of the GP-Related Investments as it determines in good faith is appropriate).
Carried Interest Give Back Percentage means, for any Partner or Withdrawn Partner, subject to Section 5.8(e), the percentage determined by dividing (A) the aggregate amount of distributions received by such Partner or Withdrawn Partner from the Partnership or any Other Fund GPs or their Affiliates in respect of Carried Interest by (B) the aggregate amount of distributions made to all Partners, Withdrawn Partners or any other person by the Partnership or any Other Fund GP or any of their Affiliates (in any capacity) in respect of Carried Interest. For purposes of determining any Carried Interest Give Back Percentage hereunder, all Trust Amounts contributed to the Trust by the Partnership or any Other Fund GPs on behalf of a Partner or Withdrawn Partner (but not the Trust Income thereon) shall be deemed to have been initially distributed or paid to the Partners and Withdrawn Partners as members, partners or other equity interest owners of the Partnership or any of the Other Fund GPs or their Affiliates.
Carried Interest Sharing Percentage means, with respect to each GP-Related Investment, the percentage interest of a Partner in Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
Cause means the occurrence or existence of any of the following with respect to any Partner, as determined fairly, reasonably, on an informed basis and in good faith by the General Partner: (i) (w) any breach by any Partner of any provision of any non-
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competition agreement, (x) any material breach of this Agreement or any rules or regulations applicable to such Partner that are established by the General Partner, (y) such Partners deliberate failure to perform his or her duties to the Partnership or any of its Affiliates, or (z) such Partners committing to or engaging in any conduct or behavior that is or may be harmful to the Partnership or any of its Affiliates in a material way as determined by the General Partner; provided, that, in the case of any of the foregoing clauses (w), (x), (y) and (z), the General Partner has given such Partner written notice (a Notice of Breach) within 15 days after the General Partner becomes aware of such action and such Partner fails to cure such breach, failure to perform or conduct or behavior within 15 days after receipt of such Notice of Breach from the General Partner (or such longer period, not to exceed an additional 15 days, as shall be reasonably required for such cure; provided, that such Partner is diligently pursuing such cure); (ii) any act of fraud, misappropriation, dishonesty, embezzlement or similar conduct against the Partnership or any of its Affiliates; or (iii) conviction (on the basis of a trial or by an accepted plea of guilty or nolo contendere) of a felony (under U.S. law or its equivalent in any jurisdiction) or crime (including any misdemeanor charge involving moral turpitude, false statements or misleading omissions, forgery, wrongful taking, embezzlement, extortion or bribery), or a determination by a court of competent jurisdiction, by a regulatory body or by a self-regulatory body having authority with respect to securities laws, rules or regulations of the applicable securities industry, that such Partner individually has violated any applicable securities laws or any rules or regulations thereunder, or any rules of any such self-regulatory body (including, without limitation, any licensing requirement), if such conviction or determination has a material adverse effect on (A) such Partners ability to function as a Partner of the Partnership, taking into account the services required of such Partner and the nature of the business of the Partnership and its Affiliates or (B) the business of the Partnership and its Affiliates or (iv) becoming subject to an event described in Rule 506(d)(1)(i)-(viii) of Regulation D under the Securities Act.
Clawback Adjustment Amount has the meaning set forth in Section 5.8(e)(ii)(C).
Clawback Amount means the Clawback Amount and the Interim Clawback Amount, each as defined in the BREP IX Partnership Agreement, and any other clawback amount payable to the limited partners of BREP IX or to BREP IX pursuant to any BREP IX Agreement, as applicable.
Clawback Provisions means paragraphs 4.2.9 and 9.2.8 of the BREP IX Partnership Agreement and any other similar provisions in any other BREP IX Agreement existing heretofore or hereafter entered into.
Code means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. Any reference herein to a particular provision of the Code means, where appropriate, the corresponding provision in any successor statute.
Commitment Agreements means the agreements between the Partnership or an Affiliate thereof and Partners, pursuant to which each Partner undertakes certain obligations, including the obligation to make capital contributions pursuant to Section 4.1 and/or Section 7.1. Each Commitment Agreement is hereby incorporated by reference as between the Partnership and the relevant Partner.
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Contingent means subject to repurchase rights and/or other requirements.
The term control when used with reference to any person means the power to direct the management and policies of such person, directly or indirectly, by or through stock or other equity interest ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one or more other persons by or through stock or other equity interest ownership, agency or otherwise; and the terms controlling and controlled shall have meanings correlative to the foregoing.
Controlled Entity when used with reference to another person means any person controlled by such other person.
Covered Person has the meaning set forth in Section 3.5(a).
Deceased Partner means any Partner or Withdrawn Partner who has died or who suffers from Incompetence. For purposes hereof, references to a Deceased Partner shall refer collectively to the Deceased Partner and the estate and heirs or legal representative of such Deceased Partner, as the case may be, that have received such Deceased Partners interest in the Partnership.
Default Interest Rate means the lower of (i) the sum of (a) the Prime Rate and (b) 5%, or (ii) the highest rate of interest permitted under applicable law.
Delaware Arbitration Act has the meaning set forth in Section 10.1(d).
Estate Planning Vehicle has the meaning set forth in Section 6.3(a).
Excess Holdback has the meaning set forth in Section 4.1(d)(v)(A).
Excess Holdback Percentage has the meaning set forth in Section 4.1(d)(v)(A).
Excess Tax-Related Amount has the meaning set forth in Section 5.8(e).
Existing Partner means any Partner who is neither a Retaining Withdrawn Partner nor a Deceased Partner.
Final Event means the death, Total Disability, Incompetence, Bankruptcy, liquidation, dissolution or Withdrawal from the Partnership of any person who is a Partner.
Firm Advances has the meaning set forth in Section 7.1(c).
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Firm Collateral means a Partners or Withdrawn Partners interest in one or more partnerships or limited liability companies, in either case affiliated with the Partnership, and certain other assets of such Partner or Withdrawn Partner, in each case that has been pledged or made available to the Trustee(s) to satisfy all or any portion of the Excess Holdback of such Partner or Withdrawn Partner as more fully described in the Partnerships books and records; provided, that for all purposes hereof (and any other agreement (e.g., the Trust Agreement) that incorporates the meaning of the term Firm Collateral by reference), references to Firm Collateral shall include Special Firm Collateral, excluding references to Firm Collateral in Section 4.1(d)(v) and Section 4.1(d)(viii).
Firm Collateral Realization has the meaning set forth in Section 4.1(d)(v)(B).
Fiscal Year means a calendar year, or any other period chosen by the General Partner.
Fund GP means the Partnership (only with respect to the GP-Related BREP IX Interest) and the Other Fund GPs.
GAAP means U.S. generally accepted accounting principles.
General Partner means BREA IX L.L.C. and any person admitted to the Partnership as an additional or substitute general partner of the Partnership in accordance with the provisions of this Agreement (until such time as such person ceases to be a general partner of the Partnership as provided herein or in the Partnership Act).
Giveback Amount(s) means the amount(s) payable by partners of BREP IX pursuant to the Giveback Provisions.
Giveback Provisions means paragraph 3.4.3 of the BREP IX Partnership Agreement and any other similar provisions in any other BREP IX Agreement existing heretofore or hereafter entered into.
Governmental Entity has the meaning set forth in Section 10.7(b).
GP-Related Associates IX Interest means the interest of the Partnership as a limited partner of Associates IX with respect to the GP-Related BREP IX Interest, but does not include any interest of the Partnership in Associates IX with respect to any Capital Commitment BREP IX Interest that may be held by Associates IX.
GP-Related BREP IX Interest means the interest of Associates IX in BREP IX as general partner of BREP IX, excluding any Capital Commitment BREP IX Interest that may be held by Associates IX.
GP-Related BREP IX Investment means the Partnerships indirect interest in Associates IXs indirect interest in an Investment (for purposes of this definition, as defined in the BREP IX Partnership Agreement) in Associates IXs capacity as general partner and/or special general partner of BREP IX, but does not include any Capital Commitment Investment.
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GP-Related Capital Account has the meaning set forth in Section 5.2(a).
GP-Related Capital Contributions has the meaning set forth in Section 4.1(a).
GP-Related Class A Interest has the meaning set forth in Section 5.8(a)(ii).
GP-Related Class B Interest has the meaning set forth in Section 5.8(a)(ii).
GP-Related Commitment, with respect to any Partner, means such Partners commitment to the Partnership relating to such Partners GP-Related Partner Interest, as set forth in the books and records of the Partnership, including, without limitation, any such commitment that may be set forth in such Partners Commitment Agreement or SMD Agreement, if any.
GP-Related Defaulting Party has the meaning set forth in Section 5.8(d)(ii)(A).
GP-Related Deficiency Contribution has the meaning set forth in Section 5.8(d)(ii)(A).
GP-Related Disposable Investment has the meaning set forth in Section 5.8(a)(ii).
GP-Related Giveback Amount has the meaning set forth in Section 5.8(d)(i)(A).
GP-Related Investment means any investment (direct or indirect) of the Partnership in respect of the GP-Related BREP IX Interest (including, without limitation, any GP-Related BREP IX Investment, but excluding any Capital Commitment Investment).
GP-Related Net Income (Loss) has the meaning set forth in Section 5.1(b).
GP-Related Partner Interest of a Partner means all interests of such Partner in the Partnership (other than such Partners Capital Commitment Partner Interest), including, without limitation, such Partners interest in the Partnership with respect to the GP-Related BREP IX Interest and with respect to all GP-Related Investments.
GP-Related Profit Sharing Percentage means the Carried Interest Sharing Percentage and Non-Carried Interest Sharing Percentage of each Partner; provided, that any references in this Agreement to GP-Related Profit Sharing Percentages made (i) in connection with voting or voting rights or (ii) GP-Related Capital Contributions with respect to GP-Related Investments (including Section 5.3(b)) means the Non-Carried Interest Sharing Percentage of each Partner; provided further, that the term GP-Related Profit Sharing Percentage shall not include any Capital Commitment Profit Sharing Percentage.
GP-Related Recontribution Amount has the meaning set forth in Section 5.8(d)(i)(A).
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GP-Related Required Amounts has the meaning set forth in Section 4.1(a).
GP-Related Unallocated Percentage has the meaning set forth in Section 5.3(b).
GP-Related Unrealized Net Income (Loss) attributable to any GP-Related BREP IX Investment as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related BREP IX Investment if BREP IXs entire portfolio of investments were sold on such date for cash in an amount equal to their aggregate value on such date (determined in accordance with Section 5.1(e)) and all distributions payable by BREP IX to the Partnership (indirectly through the general partner of BREP IX) pursuant to any BREP IX Partnership Agreement with respect to such GP-Related BREP IX Investment were made on such date. GP-Related Unrealized Net Income (Loss) attributable to any other GP-Related Investment (other than any Capital Commitment Investment) as of any date means the GP-Related Net Income (Loss) that would be realized by the Partnership with respect to such GP-Related Investment if such GP-Related Investment were sold on such date for cash in an amount equal to its value on such date (determined in accordance with Section 5.1(e)).
Holdback has the meaning set forth in Section 4.1(d)(i).
Holdback Percentage has the meaning set forth in Section 4.1(d)(i).
Holdback Vote has the meaning set forth in Section 4.1(d)(iv)(A).
Holdings means Blackstone Holdings II L.P., a Delaware limited partnership.
Incompetence means, with respect to any Partner, the determination by the General Partner in its sole discretion, after consultation with a qualified medical doctor, that such Partner is incompetent to manage his or her person or his or her property.
Initial Holdback Percentages has the meaning set forth in Section 4.1(d)(i).
Initial Limited Partner has the meaning set forth in the preamble hereto.
Interest means a partnership interest (as defined in §17-101(13) of the Partnership Act) in the Partnership, including any interest that is held by a Retaining Withdrawn Partner and including any Partners GP-Related Partner Interest and Capital Commitment Partner Interest.
Investment means any investment (direct or indirect) of the Partnership designated by the General Partner from time to time as an investment in which the Partners respective interests shall be established and accounted for on a basis separate from the Partnerships other businesses, activities and investments, including (a) GP-Related Investments, and (b) Capital Commitment Investments.
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Investor Note means a promissory note of a Partner evidencing indebtedness incurred by such Partner to purchase a Capital Commitment Interest, the terms of which were or are approved by the General Partner and which is secured by such Capital Commitment Interest, all other Capital Commitment Interests of such Partner and all other interests of such Partner in Blackstone Entities; provided, that such promissory note may also evidence indebtedness relating to other interests of such Partner in Blackstone Entities, and such indebtedness shall be prepayable with Capital Commitment Net Income (whether or not such indebtedness relates to Capital Commitment Investments) as set forth in this Agreement, the Investor Note, the other BE Agreements and any documentation relating to Other Sources; provided further, that references to Investor Notes herein refer to multiple loans made pursuant to such note, whether made with respect to Capital Commitment Investments or other BE Investments, and references to an Investor Note refer to one such loan as the context requires. In no way shall any indebtedness incurred to acquire Capital Commitment Interests or other interests in Blackstone Entities be considered part of the Investor Notes for purposes hereof if the Lender or Guarantor is not the lender or guarantor with respect thereto.
Investor Special Partner means any Special Partner so designated at the time of its admission by the General Partner as a Partner of the Partnership.
Issuer means the issuer of any Security comprising part of an Investment.
L/C has the meaning set forth in Section 4.1(d)(vi).
L/C Partner has the meaning set forth in Section 4.1(d)(vi).
Lender or Guarantor means Blackstone Holdings I L.P., in its capacity as lender or guarantor under the Investor Notes, or any other Affiliate of the Partnership that makes or guarantees loans to enable a Partner to acquire Capital Commitment Interests or other interests in Blackstone Entities.
Limited Partner means each of the parties listed as Limited Partners in the books and records of the Partnership or any person that has been admitted to the Partnership as a substituted or additional Limited Partner in accordance with the terms of this Agreement, each in its capacity as a limited partner of the Partnership. For the avoidance of doubt, the term Limited Partner does not include the General Partner or any Special Partners (notwithstanding the fact that Special Partners are limited partners of the Partnership).
Loss Amount has the meaning set forth in Section 5.8(e)(i)(A).
Loss Investment has the meaning set forth in Section 5.8(e).
Losses has the meaning set forth in Section 3.5(b)(i).
Majority in Interest of the Partners on any date (a vote date) means one or more persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date and who, as of the last day of the most recent accounting period ending on or prior to the vote date (or as of such later date on or prior to the vote date selected by the General Partner as of which the Partners capital account balances can be determined), have aggregate capital account balances representing at least a majority in amount of the total capital account balances of all the persons who are Partners (including the General Partner but excluding Nonvoting Special Partners) on the vote date.
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Moodys means Moodys Investors Service, Inc., or any successor thereto.
Net Carried Interest Distribution has the meaning set forth in Section 5.8(e)(i)(C).
Net Carried Interest Distribution Recontribution Amount has the meaning set forth in Section 5.8(e).
Net GP-Related Recontribution Amount has the meaning set forth in Section 5.8(d)(i)(A).
Non-Carried Interest means, with respect to each GP-Related Investment, all amounts of distributions, other than Carried Interest and other than Capital Commitment Distributions, received by the Partnership with respect to such GP-Related Investment, less any costs, fees and expenses of the Partnership with respect thereto and less reasonable reserves for payment of costs, fees and expenses of the Partnership that are anticipated with respect thereto, in each case which the General Partner may allocate to all or any portion of the GP-Related Investments as it may determine in good faith is appropriate.
Non-Carried Interest Sharing Percentage means, with respect to each GP-Related Investment, the percentage interest of a Partner in Non-Carried Interest from such GP-Related Investment set forth in the books and records of the Partnership.
Non-Contingent means generally not subject to repurchase rights or other requirements.
Nonvoting Partner has the meaning set forth in Section 8.2.
Nonvoting Special Partner has the meaning set forth in Section 6.1(a).
Original Agreement has the meaning set forth in the recitals.
Other Fund GPs means Associates IX and any other entity (other than the Partnership) through which any Partner, Withdrawn Partner or any other person directly receives any amounts of Carried Interest, and any successor thereto; provided, that this includes any other entity which has in its organizational documents a provision which indicates that it is a Fund GP or an Other Fund GP; provided further, that notwithstanding any of the foregoing, neither BREA IX L.L.C. nor Holdings nor any Estate Planning Vehicle established for the benefit of family members of any Partner or of any member or partner of any Other Fund GP shall be considered an Other Fund GP for purposes hereof.
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Other Sources means (i) distributions or payments of Capital Commitment Partner Carried Interest (which shall include amounts of Capital Commitment Partner Carried Interest which are not distributed or paid to a Partner but are instead contributed to a trust (or similar arrangement) to satisfy any holdback obligation with respect thereto), and (ii) distributions from Blackstone Entities (other than the Partnership) to such Partner.
Parallel Fund means any additional collective investment vehicle (or other similar arrangement) formed pursuant to paragraph 2.8 of the BREP IX Partnership Agreement.
Partner means any person who is a partner of the Partnership, including the Limited Partners, the General Partner and the Special Partners. Except as otherwise specifically provided herein, no group of Partners, including the Special Partners and any group of Partners in the same Partner Category, shall have any right to vote as a class on any matter relating to the Partnership, including, but not limited to, any merger, reorganization, dissolution or liquidation.
Partner Category means the General Partner, Existing Partners, Retaining Withdrawn Partners or Deceased Partners, each referred to as a group for purposes hereof.
Partnership has the meaning set forth in the preamble hereto.
Partnership Act has the meaning set forth in the preamble hereto.
Partnership Affiliate has the meaning set forth in Section 3.3(b).
Partnership Affiliate Governing Agreement has the meaning set forth in Section 3.3(b).
Pledgable Blackstone Interests has the meaning set forth in Section 4.1(d)(v)(A).
Prime Rate means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate.
Qualifying Fund means any fund designated by the General Partner as a Qualifying Fund.
Repurchase Period has the meaning set forth in Section 5.8(c).
Required Rating has the meaning set forth in Section 4.1(d)(vi).
Retained Portion has the meaning set forth in Section 7.6(a).
Retaining Withdrawn Partner means a Withdrawn Partner who has retained a GP-Related Partner Interest, pursuant to Section 6.5(f) or otherwise. A Retaining Withdrawn Partner shall be considered a Nonvoting Special Partner for all purposes hereof.
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Securities means any debt or equity securities of an Issuer and its subsidiaries and other Controlled Entities constituting part of an Investment, including without limitation common and preferred stock, interests in limited partnerships and interests in limited liability companies (including warrants, rights, put and call options and other options relating thereto or any combination thereof), notes, bonds, debentures, trust receipts and other obligations, instruments or evidences of indebtedness, choses in action, other property or interests commonly regarded as securities, interests in real property, whether improved or unimproved, interests in oil and gas properties and mineral properties, short-term investments commonly regarded as money-market investments, bank deposits and interests in personal property of all kinds, whether tangible or intangible.
Securities Act means the U.S. Securities Act of 1933, as amended from time to time, or any successor statute.
Settlement Date has the meaning set forth in Section 6.5(a).
SMD Agreements means the agreements between the Partnership and/or one or more of its Affiliates and certain of the Partners, pursuant to which each such Partner undertakes certain obligations with respect to the Partnership and/or its Affiliates. The SMD Agreements are hereby incorporated by reference as between the Partnership and the relevant Partner.
Special Firm Collateral means interests in a Qualifying Fund or other assets that have been pledged to the Trustee(s) to satisfy all or any portion of a Partners or Withdrawn Partners Holdback obligation (excluding any Excess Holdback) as more fully described in the Partnerships books and records.
Special Firm Collateral Realization has the meaning set forth in Section 4.1(d)(viii)(B).
Special Partner means any person shown in the books and records of the Partnership as a Special Partner of the Partnership, including any Nonvoting Special Partner and any Investor Special Partner.
S&P means Standard & Poors Ratings Group, and any successor thereto.
Subject Investment has the meaning set forth in Section 5.8(e)(i).
Subject Partner has the meaning set forth in Section 4.1(d)(iv)(A).
Successor in Interest means any (i) shareholder of; (ii) trustee, custodian, receiver or other person acting in any Bankruptcy or reorganization proceeding with respect to; (iii) assignee for the benefit of the creditors of; (iv) officer, director or partner of; (v) trustee or receiver, or former officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of; or (vi) other executor, administrator, committee, legal representative or other successor or assign of, any Partner, whether by operation of law or otherwise.
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Tax Advances has the meaning set forth in Section 6.7(d).
Tax Matters Partner has the meaning set forth in Section 6.7(b).
TM has the meaning set forth in Section 10.2.
Total Disability means the inability of a Limited Partner substantially to perform the services required of such Limited Partner (in its capacity as such or in any other capacity with respect to any Affiliate of the Partnership) for a period of six consecutive months by reason of physical or mental illness or incapacity and whether arising out of sickness, accident or otherwise.
Transfer has the meaning set forth in Section 8.2.
Trust Account has the meaning set forth in the Trust Agreement.
Trust Agreement means the Trust Agreement, dated as of the date set forth therein, as amended, supplemented, restated or otherwise modified from time to time, among the Partners, the Trustee(s) and certain other persons that may receive distributions in respect of or relating to Carried Interest from time to time.
Trust Amount has the meaning set forth in the Trust Agreement.
Trust Income has the meaning set forth in the Trust Agreement.
Trustee(s) has the meaning set forth in the Trust Agreement.
Unadjusted Carried Interest Distribution has the meaning set forth in Section 5.8(e)(i)(B).
Unallocated Capital Commitment Interests has the meaning set forth in Section 8.1(f).
U.S. means the United States of America.
Withdraw or Withdrawal means, with respect to a Partner, such Partner ceasing to be a partner of the Partnership (except as a Retaining Withdrawn Partner) for any reason (including death, disability, removal, resignation or retirement, whether such is voluntary or involuntary), unless the context shall limit the type of withdrawal to a specific reason, and Withdrawn with respect to a Partner means, as aforesaid, such Partner ceasing to be a partner of the Partnership.
Withdrawal Date means the date of the Withdrawal from the Partnership of a Withdrawn Partner.
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Withdrawn Partner means a Limited Partner whose GP-Related Partner Interest or Capital Commitment Partner Interest in the Partnership has been terminated for any reason, including the occurrence of an event specified in Section 6.2, and shall include, unless the context requires otherwise, the estate or legal representatives of any such Partner.
W-8BEN has the meaning set forth in Section 3.7.
W-8BEN-E has the meaning set forth in Section 3.7.
W-8IMY has the meaning set forth in Section 3.7.
W-9 has the meaning set forth in Section 3.7.
Section 1.2. Terms Generally. The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The term person includes individuals, partnerships (including limited liability partnerships), companies (including limited liability companies), joint ventures, corporations, trusts, governments (or agencies or political subdivisions thereof) and other associations and entities. The words include, includes and including shall be deemed to be followed by the phrase without limitation.
ARTICLE II
GENERAL PROVISIONS
Section 2.1. General Partner, Limited Partner, Special Partner. The Partners may be General Partners, Limited Partners or Special Partners. The General Partner as of the date hereof is BREA IX L.L.C. and the Limited Partners as of the date hereof are those persons shown as Limited Partners in the books and records of the Partnership and the Special Partners as of the date hereof are those persons shown as Special Partners in the books and records of the Partnership as of the date hereof. The books and records of the Partnership contain the GP-Related Profit Sharing Percentage and GP-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the GP-Related Investments of the Partnership as of the date hereof. The books and records of the Partnership contain the Capital Commitment Profit Sharing Percentage and Capital Commitment-Related Commitment of each Partner (including, without limitation, the General Partner) with respect to the Capital Commitment Investments of the Partnership as of the date hereof. The books and records of the Partnership shall be amended by the General Partner from time to time to reflect additional GP-Related Investments, additional Capital Commitment Investments, dispositions by the Partnership of GP-Related Investments, dispositions by the Partnership of Capital Commitment Investments, the GP-Related Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the Capital Commitment Profit Sharing Percentages of the Partners (including, without limitation, the General Partner), as modified from time to time, the admission of additional Partners, the Withdrawal of Partners and the transfer or assignment of interests in the Partnership pursuant to the terms of this Agreement.
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At the time of admission of each additional Partner, the General Partner shall determine in its sole discretion the GP-Related Investments and Capital Commitment Investments in which such Partner shall participate and such Partners GP-Related Commitment, Capital Commitment-Related Commitment, GP-Related Profit Sharing Percentage with respect to each such GP-Related Investment and Capital Commitment Profit Sharing Percentage with respect to each such Capital Commitment Investment. Each Partner may have a GP-Related Partner Interest and/or a Capital Commitment Partner Interest.
Section 2.2. Formation; Name; Foreign Jurisdictions. The Partnership is hereby continued as a limited partnership pursuant to the Partnership Act and shall conduct its activities on and after the date hereof under the name of BREA IX (Delaware) L.P. The certificate of limited partnership of the Partnership may be amended and/or restated from time to time by the General Partner, as an authorized person (within the meaning of the Partnership Act). The General Partner is further authorized to execute and deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business.
Section 2.3. Term. The term of the Partnership shall continue until December 31, 2069, unless earlier dissolved and its affairs wound up in accordance with this Agreement and the Partnership Act.
Section 2.4. Purposes; Powers. (a) The purposes of the Partnership shall be, directly or indirectly through subsidiaries or Affiliates:
(i) to serve as a limited partner or general partner of Associates IX and perform the functions of a limited partner, special general partner or general partner of Associates IX specified in the Associates IX LP Agreement and, if applicable, the BREP IX Agreements;
(ii) if applicable, to serve as, and hold the Capital Commitment BREP IX Interest as, a capital partner (and, if applicable, a limited partner, special general partner and/or a general partner) of BREP IX and perform the functions of a capital partner (and, if applicable, a limited partner, special general partner and/or a general partner) of BREP IX specified in the BREP IX Agreements;
(iii) to invest in Capital Commitment Investments and/or GP-Related Investments and acquire and invest in Securities or other property directly or indirectly through Associates IX and/or BREP IX or otherwise;
(iv) to make the Blackstone Capital Commitment or a portion thereof, directly or indirectly, and to invest in GP-Related Investments, Capital Commitment Investments and other Investments and acquire and invest in Securities or other property either directly or indirectly through Associates IX or another entity;
(v) to serve as a general partner or limited partner of BREP IX and/or other investment vehicles and perform the functions of a general partner or limited partner, member, shareholder or other equity interest owner specified in the respective partnership agreement, limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such partnership;
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(vi) to serve as a member, shareholder or other equity interest owner of limited liability companies, other companies, corporations or other entities and perform the functions of a member, shareholder or other equity interest owner specified in the respective limited liability company agreement, charter or other governing documents, as amended, supplemented, restated or otherwise modified from time to time, of any such limited liability company, company, corporation or other entity;
(vii) to carry on such other businesses, perform such other services and make such other investments as are deemed desirable by the General Partner and as are permitted under the Partnership Act, the Associates IX LP Agreement, the BREP IX Agreements, and any applicable partnership agreement, limited liability company agreement, charter or other governing document referred to in clause (v) or (vi) above, in each case as the same may be amended, supplemented, restated or otherwise modified from time to time;
(viii) any other lawful purpose; and
(ix) to do all things necessary, desirable, convenient or incidental thereto.
(b) In furtherance of its purposes, the Partnership shall have all powers necessary, suitable or convenient for the accomplishment of its purposes, alone or with others, as principal or agent, including the following:
(i) to be and become a general partner or limited partner of partnerships, a member of limited liability companies, a holder of common and preferred stock of corporations and/or an investor in the foregoing entities or other entities, in connection with the making of Investments or the acquisition, holding or disposition of Securities or other property or as otherwise deemed appropriate by the General Partner in the conduct of the Partnerships business, and to take any action in connection therewith;
(ii) to acquire and invest in general partner or limited partner interests, in limited liability company interests, in common and preferred stock of corporations and/or in other interests in or obligations of the foregoing entities or other entities and in Investments and Securities or other property or direct or indirect interests therein, whether such Investments and Securities or other property are readily marketable or not, and to receive, hold, sell, dispose of or otherwise transfer any such partner interests, limited liability company interests, stock, interests, obligations, Investments or Securities or other property and any dividends and distributions thereon and to purchase and sell, on margin, and be long or short, futures contracts and to purchase and sell, and be long or short, options on futures contracts;
(iii) to buy, sell and otherwise acquire investments, whether such investments are readily marketable or not;
(iv) to invest and reinvest the cash assets of the Partnership in money-market or other short-term investments;
(v) to hold, receive, mortgage, pledge, grant security interests over, lease, transfer, exchange or otherwise dispose of, grant options with respect to, and otherwise deal in and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, all property held or owned by the Partnership;
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(vi) to borrow or raise money from time to time and to issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable and non-negotiable instruments and evidences of indebtedness, to secure payment of the principal of any such indebtedness and the interest thereon by mortgage, pledge, conveyance or assignment in trust of, or the granting of a security interest in, the whole or any part of the property of the Partnership, whether at the time owned or thereafter acquired, to guarantee the obligations of others and to buy, sell, pledge or otherwise dispose of any such instrument or evidence of indebtedness;
(vii) to lend any of its property or funds, either with or without security, at any legal rate of interest or without interest;
(viii) to have and maintain one or more offices within or without the State of Delaware, and in connection therewith, to rent or acquire office space, engage personnel and compensate them and do such other acts and things as may be advisable or necessary in connection with the maintenance of such office or offices;
(ix) to open, maintain and close accounts, including margin accounts, with brokers;
(x) to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;
(xi) to engage accountants, auditors, custodians, investment advisers, attorneys and any and all other agents and assistants, both professional and nonprofessional, and to compensate any of them as may be necessary or advisable;
(xii) to form or cause to be formed and to own the stock of one or more corporations, whether foreign or domestic, to form or cause to be formed and to participate in partnerships and joint ventures, whether foreign or domestic and to form or cause to be formed and be a member or manager or both of one or more limited liability companies;
(xiii) to enter into, make and perform all contracts, agreements and other undertakings as may be necessary, convenient, advisable or incident to carrying out its purposes;
(xiv) to sue and be sued, to prosecute, settle or compromise all claims against third parties, to compromise, settle or accept judgment to claims against the Partnership, and to execute all documents and make all representations, admissions and waivers in connection therewith;
(xv) to distribute, subject to the terms of this Agreement, at any time and from time to time to the Partners cash or investments or other property of the Partnership, or any combination thereof; and
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(xvi) to take such other actions necessary, desirable, convenient or incidental thereto and to engage in such other businesses as may be permitted under Delaware and other applicable law.
Section 2.5. Place of Business. The Partnership shall maintain a registered office at c/o Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The Partnership shall maintain an office and principal place of business at such place or places as the General Partner specifies from time to time and as set forth in the books and records of the Partnership. The name and address of the Partnerships registered agent is Intertrust Corporate Services Delaware Ltd., 200 Bellevue Parkway, Suite 210, Bellevue Park Corporate Center, Wilmington, Delaware 19809. The General Partner may from time to time change the registered agent or office by an amendment to the certificate of limited partnership of the Partnership.
Section 2.6. Withdrawal of Initial Limited Partner. Upon the admission of one or more additional Limited Partners to the Partnership, the Initial Limited Partner shall (a) Withdraw as the Initial Limited Partner of the Partnership and (b) have no further right, interest or obligation of any kind whatsoever as a Partner in the Partnership; provided, that the effective date of such Withdrawal shall be deemed as between the parties hereto to be December 21, 2018.
ARTICLE III
MANAGEMENT
Section 3.1. General Partner. (a) BREA IX L.L.C. is the General Partner as of the date hereof. The General Partner shall cease to be the General Partner only if (i) it Withdraws from the Partnership for any reason, (ii) it consents in its sole discretion to resign as the General Partner, or (iii) a Final Event with respect to it occurs. The General Partner may not be removed without its consent. There may be one or more General Partners. In the event that one or more other General Partners is admitted to the Partnership as such, all references herein to the General Partner in the singular form shall be deemed to also refer to such other General Partners as may be appropriate. The relative rights and responsibilities of the General Partners will be as agreed upon from time to time between them.
(b) Upon the Withdrawal from the Partnership or voluntary resignation of the last remaining General Partner, all of the powers formerly vested therein pursuant to this Agreement and the Partnership Act shall be exercised by a Majority in Interest of the Partners.
Section 3.2. Partner Voting, etc. (a) Except as otherwise expressly provided herein and except as may be expressly required by the Partnership Act, Partners (including Special Partners), other than the General Partner, as such shall have no right to, and shall not, take part in the management or control of the Partnerships business or act for or bind the Partnership, and shall have only the rights and powers granted to Partners of the applicable class herein.
(b) To the extent a Partner is entitled to vote with respect to any matter relating to the Partnership, such Partner shall not be obligated to abstain from voting on any matter (or vote in any particular manner) because of any interest (or conflict of interest) of such Partner (or any Affiliate thereof) in such matter.
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(c) Meetings of the Partners may be called only by the General Partner.
(d) Notwithstanding any other provision of this Agreement, any Limited Partner or Withdrawn Partner that fails to respond to a notice provided by the General Partner requesting the consent, approval or vote of such Limited Partner or Withdrawn Partner within 14 days after such notice is sent to such Limited Partner or Withdrawn Partner shall be deemed to have given its affirmative consent or approval thereto.
Section 3.3. Management. (a) The management, control and operation of the Partnership and the formulation and execution of business and investment policy shall be vested in the General Partner. The General Partner shall, in its discretion, exercise all powers necessary and convenient for the purposes of the Partnership, including those enumerated in Section 2.4, on behalf and in the name of the Partnership. All decisions and determinations (howsoever described herein) to be made by the General Partner pursuant to this Agreement shall be made in its sole discretion, subject only to the express terms and conditions of this Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary, the Partnership is hereby authorized, without the need for any further act, vote or consent of any person (directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in the Partnerships capacity as a partner of Associates IX on Associates IXs own behalf or in Associates IXs capacity as general partner, special general partner, capital partner and/or limited partner of BREP IX or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnerships capacity as a capital partner of BREP IX or as general or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate (as hereinafter defined)): (i) to execute and deliver, and to perform the Partnerships obligations under the Associates IX LP Agreement, including, without limitation, serving as a limited partner or general partner of Associates IX, (ii) to execute and deliver, and to cause Associates IX to perform Associates IXs obligations under the BREP IX Agreements, including, without limitation, serving as a general partner or special general partner of BREP IX and, if applicable, a capital partner of BREP IX, (iii) if applicable, to execute and deliver, and to perform the Partnerships obligations under, the BREP IX Agreements, including, without limitation, serving as a capital partner of BREP IX, (iv) to execute and deliver, and to perform, or, if applicable, to cause Associates IX to perform, the Partnerships or Associates IXs obligations under, the governing agreement, as amended, supplemented, restated or otherwise modified (each a Partnership Affiliate Governing Agreement), of any other partnership, limited liability company, other company, corporation or other entity (each a Partnership Affiliate) of which the Partnership or Associates IX is, or is to become, a general partner or limited partner, member, shareholder or other equity interest owner, including, without limitation, serving as a general partner, special general partner, or limited partner, member, shareholder or other equity interest owner of each Partnership Affiliate, and (v) to take any action, in the applicable capacity, contemplated by or arising out of this Agreement, the Associates IX LP Agreement, the BREP IX Agreements or each Partnership Affiliate Governing Agreement (and any amendment, supplement, restatement and/or other modification of any of the foregoing).
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(c) The General Partner, and any other person designated by the General Partner, each acting individually, is hereby authorized and empowered, as an authorized person of the Partnership or the General Partner (within the meaning of the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended, or otherwise) (the General Partner hereby authorizing and ratifying any of the following actions):
(i) to execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf, or in its capacity as a limited partner or general partner of Associates IX on Associates IXs own behalf, or in Associates IXs capacity as general partner, special partner, capital partner and/or limited partner of BREP IX or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnerships capacity as a capital partner of BREP IX or as a general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate), any of the following:
(A) any agreement, certificate, instrument or other document of the Partnership, Associates IX, BREP IX or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications thereof), including, without limitation, the following: (I) the Associates IX LP Agreement, the BREP IX Agreements and each Partnership Affiliate Governing Agreement, (II) subscription agreements and documents on behalf of BREP IX or Associates IX, (III) side letters issued in connection with investments in BREP IX and (IV) such other agreements, certificates, instruments and other documents as may be necessary or desirable in furtherance of the purposes of the Partnership, Associates IX, BREP IX or any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing referred to in (I) through (IV) above) and for the avoidance of doubt, this Agreement may be amended by the General Partner in its sole discretion;
(B) the certificates of formation, certificates of limited partnership and/or other organizational documents of the Partnership, Associates IX, BREP IX and any Partnership Affiliate (and any amendments, supplements, restatements and/or other modifications of any of the foregoing); and
(C) any other certificates, notices, applications and other documents (and any amendments, supplements, restatements and/or other modifications thereof) to be filed with any government or governmental or regulatory body, including, without limitation, any such document that may be necessary for the Partnership, Associates IX, BREP IX or any Partnership Affiliate to qualify to do business in a jurisdiction in which the Partnership, Associates IX, BREP IX or such Partnership Affiliate desires to do business;
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(ii) to prepare or cause to be prepared, and to sign, execute and deliver and/or file (including any such action, directly or indirectly through one or more other entities, in the name and on behalf of the Partnership, on its own behalf or in its capacity as a limited partner or general partner of Associates IX on Associates IXs own behalf or in Associates IXs capacity as general partner, special general partner, capital partner and/or limited partner of BREP IX, or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate or, if applicable, in the Partnerships capacity as a capital partner of BREP IX or as general partner or limited partner, member, shareholder or other equity interest owner of any Partnership Affiliate): (A) any certificates, forms, notices, applications and other documents to be filed with any government or governmental or regulatory body on behalf of the Partnership, Associates IX, BREP IX and/or any Partnership Affiliate, (B) any certificates, forms, notices, applications and other documents that may be necessary or advisable in connection with any bank account of the Partnership, Associates IX, BREP IX or any Partnership Affiliate or any banking facilities or services that may be utilized by the Partnership, Associates IX, BREP IX or any Partnership Affiliate, and all checks, notes, drafts and other documents of the Partnership, Associates IX, BREP IX or any Partnership Affiliate that may be required in connection with any such bank account or banking facilities or services and (C) resolutions with respect to any of the foregoing matters (which resolutions, when executed by any person authorized as provided in this Section 3.3(c), each acting individually, shall be deemed to have been duly adopted by the General Partner, the Partnership, Associates IX, BREP IX or any Partnership Affiliate, as applicable, for all purposes).
(d) The authority granted to any person (other than the General Partner) in Section 3.3(c) may be revoked at any time by the General Partner by an instrument in writing signed by the General Partner.
Section 3.4. Responsibilities of Partners.
(a) Unless otherwise determined by the General Partner in a particular case, each Limited Partner (other than a Special Partner) shall devote substantially all of his or her time and attention to the businesses of the Partnership and its Affiliates, and each Special Partner shall not be required to devote any time or attention to the businesses of the Partnership or its Affiliates.
(b) All outside business or investment activities of the Partners (including outside directorships or trusteeships) shall be subject to such rules and regulations as are established by the General Partner from time to time.
(c) The General Partner may from time to time establish such other rules and regulations applicable to Partners or other employees as the General Partner deems appropriate, including rules governing the authority of Partners or other employees to bind the Partnership to financial commitments or other obligations.
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Section 3.5. Exculpation and Indemnification.
(a) Liability to Partners. Notwithstanding any other provision of this Agreement, whether express or implied, to the fullest extent permitted by law, no Partner nor any of such Partners representatives, agents or advisors nor any partner, member, officer, employee, representative, agent or advisor of the Partnership or any of its Affiliates (individually, a Covered Person and collectively, the Covered Persons) shall be liable to the Partnership or any other Partner for any act or omission (in relation to the Partnership, this Agreement, any related document or any transaction or investment contemplated hereby or thereby) taken or omitted by a Covered Person (other than any act or omission constituting Cause), unless there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement. Each Covered Person shall be entitled to rely in good faith on the advice of legal counsel to the Partnership, accountants and other experts or professional advisors, and no action taken by any Covered Person in reliance on such advice shall in any event subject such person to any liability to any Partner or the Partnership. To the extent that, at law or in equity, a Partner has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to another Partner, to the fullest extent permitted by law, such Partner acting under this Agreement shall not be liable to the Partnership or to any such other Partner for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they expand or restrict the duties and liabilities of a Partner otherwise existing at law or in equity, are agreed by the Partners, to the fullest extent permitted by law, to modify to that extent such other duties and liabilities of such Partner. To the fullest extent permitted by law, the parties hereto agree that the General Partner shall be held to have acted in good faith for the purposes of this Agreement and its duties under the Partnership Act if it believes that it has acted honestly and in accordance with the specific terms of this Agreement.
(b) Indemnification. (i) To the fullest extent permitted by law, the Partnership shall indemnify and hold harmless (but only to the extent of the Partnerships assets (including, without limitation, the remaining capital commitments of the Partners)) each Covered Person from and against any and all claims, damages, losses, costs, expenses and liabilities (including, without limitation, amounts paid in satisfaction of judgments, in compromises and settlements, as fines and penalties and legal or other costs and reasonable expenses of investigating or defending against any claim or alleged claim), joint and several, of any nature whatsoever, known or unknown, liquidated or unliquidated (collectively, for purposes of this Section 3.5(b), Losses), arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of such Covered Persons management of the affairs of the Partnership or which relate to or arise out of or in connection with the Partnership, its property, its business or affairs (other than claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, arising out of any act or omission of such Covered Person constituting Cause); provided, that a Covered Person shall not be entitled to indemnification under this Section 3.5(b) with respect to any claim, issue or matter if there is a final and non-appealable judicial determination and/or determination of an arbitrator that such Covered Person did not act in good faith and in what such Covered Person reasonably believed to be in, or not opposed to, the best interests of the Partnership and within the authority granted to such Covered Person by this Agreement; provided further, that if such Covered Person is a Partner or a Withdrawn Partner, such Covered Person shall bear its share of such Losses in
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accordance with such Covered Persons GP-Related Profit Sharing Percentage in the Partnership as of the time of the actions or omissions that gave
rise to such Losses. To the fullest extent permitted by law, expenses (including legal fees) incurred by a Covered Person (including, without limitation, the General Partner) in defending any claim, demand, action, suit or proceeding may, with the
approval of the General Partner, from time to time, be advanced by the Partnership prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of a written undertaking by or on behalf of the
Covered Person to repay such amount to the extent that it shall be subsequently determined that the Covered Person is not entitled to be indemnified as authorized in this Section 3.5(b), and the Partnership and its Affiliates shall have a
continuing right of offset against such Covered Persons interests/investments in the Partnership and such Affiliates and shall have the right to withhold amounts otherwise distributable to such Covered Person to satisfy such repayment
obligation. If a Partner institutes litigation against a Covered Person which gives rise to an indemnity obligation hereunder, such Partner shall be responsible, up to the amount of such Partners Interests and remaining capital commitments,
for such Partners pro rata share of the Partnerships expenses related to such indemnity obligation, as determined by the General Partner. The Partnership may purchase insurance, to the extent available at reasonable cost, to cover
losses, claims, damages or liabilities covered by the foregoing indemnification provisions. Partners will not be personally obligated with respect to indemnification pursuant to this Section 3.5(b). The General Partner shall have the authority
to enter into separate agreements with any Covered Person in order to give effect to the obligations to indemnify pursuant to this
Section 3.5(b).
(ii) (A) Notwithstanding anything to the contrary herein, for greater certainty, it is understood and/or agreed that the Partnerships obligations hereunder are not intended to render the Partnership as a primary indemnitor for purposes of the indemnification, advancement of expenses and related provisions under applicable law governing BREP IX and/or a particular portfolio entity through which an Investment is indirectly held. It is further understood and/or agreed that a Covered Person shall first seek to be so indemnified and have such expenses advanced in the following order of priority: first, out of proceeds available in respect of applicable insurance policies maintained by the applicable portfolio entity and/or BREP IX; second, by the applicable portfolio entity through which such investment is indirectly held; and third, by BREP IX and fourth by Associates IX (only to the extent the foregoing sources are exhausted).
(B) The Partnerships obligation, if any, to indemnify or advance expenses to any Covered Person shall be reduced by any amount that such Covered Person may collect as indemnification or advancement from BREP IX and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), and to the extent the Partnership (or any Affiliate thereof) pays or causes to be paid any amounts that should have been paid by Associates IX, BREP IX and/or the applicable portfolio entity (including by virtue of any applicable insurance policies maintained thereby), it is agreed among the Partners that the Partnership shall have a subrogation claim against Associates IX and/or BREP IX and/or such portfolio entity in respect of such advancement or payments. The General Partner and the Partnership shall be specifically empowered to structure any such advancement or payment as a loan or other arrangement (except for a loan to an executive officer of The Blackstone Group Inc. or any of its Affiliates, which shall not be permitted) as the General Partner may determine necessary or advisable to give effect to or otherwise implement the foregoing.
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Section 3.6. Representations of Partners. (a) Each Limited Partner and Special Partner by execution of this Agreement (or by otherwise becoming bound by the terms and conditions hereof as provided herein or in the Partnership Act) represents and warrants to every other Partner and to the Partnership, except as may be waived by the General Partner, that such Partner is acquiring each of such Partners Interests for such Partners own account for investment and not with a view to resell or distribute the same or any part hereof, and that no other person has any interest in any such Interest or in the rights of such Partner hereunder; provided, that a Partner may choose to make transfers for estate and charitable planning purposes (pursuant to Section 6.3(a) and otherwise in accordance with the terms hereof). Each Limited Partner and Special Partner represents and warrants that such Partner understands that the Interests have not been registered under the Securities Act and therefore such Interests may not be resold without registration under the Securities Act or exemption from such registration, and that accordingly such Partner must bear the economic risk of an investment in the Partnership for an indefinite period of time. Each Limited Partner and Special Partner represents that such Partner has such knowledge and experience in financial and business matters, that such Partner is capable of evaluating the merits and risks of an investment in the Partnership, and that such Partner is able to bear the economic risk of such investment. Each Limited Partner and Special Partner represents that such Partners overall commitment to the Partnership and other investments which are not readily marketable is not disproportionate to the Partners net worth and the Partner has no need for liquidity in the Partners investment in Interests. Each Limited Partner and Special Partner represents that to the full satisfaction of the Partner, the Partner has been furnished any materials that such Partner has requested relating to the Partnership, any Investment and the offering of Interests and has been afforded the opportunity to ask questions of representatives of the Partnership concerning the terms and conditions of the offering of Interests and any matters pertaining to each Investment and to obtain any other additional information relating thereto. Each Limited Partner and Special Partner represents that the Partner has consulted to the extent deemed appropriate by the Partner with the Partners own advisers as to the financial, tax, legal and related matters concerning an investment in Interests and on that basis believes that an investment in the Interests is suitable and appropriate for the Partner.
(b) Each Limited Partner and Special Partner agrees that the representations and warranties contained in paragraph (a) above shall be true and correct as of any date that such Partner (1) makes a capital contribution to the Partnership (whether as a result of Firm Advances made to such Partner or otherwise) with respect to any Investment, and such Partner hereby agrees that such capital contribution shall serve as confirmation thereof and/or (2) repays any portion of the principal amount of a Firm Advance, and such Partner hereby agrees that such repayment shall serve as confirmation thereof.
Section 3.7. Tax Representation and Further Assurances.
(a) Each Limited Partner and Special Partner, upon the request of the General Partner, agrees to perform all further acts and to execute, acknowledge and deliver any documents that may be reasonably necessary to comply with the General Partners or the Partnerships obligations under applicable law or to carry out the provisions of this Agreement.
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(b) Each Limited Partner and Special Partner certifies that (A) if the Limited Partner or Special Partner is a United States person (as defined in the Code) (x) (i) the Limited Partner or Special Partners name, social security number (or, if applicable, employer identification number) and address provided to the Partnership and its Affiliates pursuant to an IRS Form W-9, Request for Taxpayer Identification Number Certification (W-9) or otherwise are correct and (ii) the Limited Partner or Special Partner will complete and return a W-9 and (y) (i) the Limited Partner or Special Partner is a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of a change to foreign (non-United States) status or (B) if the Limited Partner or Special Partner is not a United States person (as defined in the Code) (x) (i) the information on the completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) (W-8BEN), IRS Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (W-8BEN-E), or other applicable form, including but not limited to IRS Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting (W-8IMY), or otherwise is correct and (ii) the Limited Partner or Special Partner will complete and return the applicable IRS form, including but not limited to a W-8BEN, W-8BEN-E or W-8IMY, and (y) (i) the Limited Partner or Special Partner is not a United States person (as defined in the Code) and (ii) the Limited Partner or Special Partner will notify the Partnership within 60 days of any change of such status. Each Limited Partner and Special Partner agrees to provide such cooperation and assistance, including but not limited to properly executing and providing to the Partnership in a timely manner any tax or other documentation or information that may be reasonably requested by the Partnership or the General Partner.
(c) Each Limited Partner and Special Partner acknowledges and agrees that the Partnership and the General Partner may release confidential information or other information about the Limited Partner or Special Partner or related to such Limited Partner or Special Partners investment in the Partnership if the Partnership or the General Partner, in its or their sole discretion, determines that such disclosure is required by applicable law or regulation or in order to comply for an exception from, or reduced tax rate of, tax or other tax benefit. Any such disclosure shall not be treated as a breach of any restriction upon the disclosure of information imposed on any such person by law or otherwise, and a Limited Partner or Special Partner shall have no claim against the Partnership, the General Partner or any of their Affiliates for any form of damages or liability as a result of actions taken by the foregoing in order to comply with any disclosure obligations that the foregoing reasonably believe are required by law, regulation or otherwise.
(d) Each Limited Partner and Special Partner acknowledges and agrees that if it provides information that is in anyway materially misleading, or if it fails to provide the Partnership or its agents with any information requested hereunder, in either case in order to satisfy the Partnerships obligations, the General Partner reserves the right to take any action and pursue any remedies at its disposal, including (i) requiring such Limited Partner or Special Partner to Withdraw for Cause and (ii) withholding or deducting any costs caused by such Limited Partners or Special Partners action or inaction from amounts otherwise distributable to such Limited Partner or Special Partner from the Partnership and its Affiliates.
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ARTICLE IV
CAPITAL OF THE PARTNERSHIP
Section 4.1. Capital Contributions by Partners. (a) Each Partner shall be required to make capital contributions to the Partnership (GP-Related Capital Contributions) at such times and in such amounts (the GP-Related Required Amounts) as are required to satisfy the Partnerships obligation to make capital contributions to Associates IX in respect of the GP-Related Associates IX Interest to fund Associates IXs capital contributions with respect to any GP-Related BREP IX Investment and as are otherwise determined by the General Partner from time to time or as may be set forth in such Limited Partners Commitment Agreement or SMD Agreement, if any, or otherwise; provided, that additional GP-Related Capital Contributions in excess of the GP-Related Required Amounts may be made pro rata among the Partners based upon each Partners Carried Interest Sharing Percentage. GP-Related Capital Contributions in excess of the GP-Related Required Amounts which are to be used for ongoing business operations (as distinct from financing, legal or other specific liabilities of the Partnership (including those specifically set forth in Section 4.1(d) and Section 5.8(d))) shall be determined by the General Partner. Special Partners shall not be required to make additional GP-Related Capital Contributions to the Partnership in excess of the GP-Related Required Amounts, except (i) as a condition of an increase in such Special Partners GP-Related Profit Sharing Percentage or (ii) as specifically set forth in this Agreement; provided, that the General Partner and any Special Partner may agree from time to time that such Special Partner shall make an additional GP-Related Capital Contribution to the Partnership; provided further, that each Investor Special Partner shall maintain its GP-Related Capital Accounts at an aggregate level equal to the product of (i) its GP-Related Profit Sharing Percentage from time to time and (ii) the total capital of the Partnership related to the GP-Related BREP IX Interest.
(b) Each GP-Related Capital Contribution by a Partner shall be credited to the appropriate GP-Related Capital Account of such Partner in accordance with Section 5.2, subject to Section 5.10.
(c) The General Partner may elect on a case by case basis to (i) cause the Partnership to loan any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group Inc. or any Affiliate thereof) the amount of any GP-Related Capital Contribution required to be made by such Partner or (ii) permit any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group Inc. or any Affiliate thereof) to make a required GP-Related Capital Contribution to the Partnership in installments, in each case on terms determined by the General Partner.
(d) (i) The Partners and the Withdrawn Partners have entered into the Trust Agreement, pursuant to which certain amounts of the distributions relating to Carried Interest will be paid to the Trustee(s) for deposit in the Trust Account (such amounts to be paid to the Trustee(s) for deposit in the Trust Account constituting a Holdback). The General Partner shall determine, as set forth below, the percentage of each distribution of Carried Interest that shall be withheld for any General Partner and/or Holdings and each Partner Category (such
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withheld percentage constituting the General Partners and such Partner Categorys Holdback Percentage). The applicable Holdback Percentages initially shall be 0% for any General Partner, 15% for Existing Partners (other than the General Partner), 21% for Retaining Withdrawn Partners (other than the General Partner) and 24% for Deceased Partners (the Initial Holdback Percentages). Any provision of this Agreement to the contrary notwithstanding, the Holdback Percentage for the General Partner and/or Holdings shall not be subject to change pursuant to clause (ii), (iii) or (iv) of this Section 4.1(d).
(ii) The Holdback Percentage may not be reduced for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may only reduce the Holdback Percentages among the Partner Categories on a proportionate basis. For example, if the Holdback Percentage for Existing Partners is decreased to 12.5%, the Holdback Percentage for Retaining Withdrawn Partners and Deceased Partners shall be reduced to 17.5% and 20%, respectively. Any reduction in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such reduction.
(iii) The Holdback Percentage may not be increased for any individual Partner as compared to the other Partners in his or her Partner Category (except as provided in clause (iv) below). The General Partner may not increase the Retaining Withdrawn Partners Holdback Percentage beyond 21% unless the General Partner concurrently increases the Existing Partners Holdback Percentage to 21%. The General Partner may not increase the Deceased Partners Holdback Percentage beyond 24% unless the General Partner increases the Holdback Percentage for both Existing Partners and Retaining Withdrawn Partners to 24%. The General Partner may not increase the Holdback Percentage of any Partner Category beyond 24% unless such increase applies equally to all Partner Categories. Any increase in the Holdback Percentage for any Partner shall apply only to distributions relating to Carried Interest made after the date of such increase. The foregoing shall in no way prevent the General Partner from proportionately increasing the Holdback Percentage of any Partner Category (following a reduction of the Holdback Percentages below the Initial Holdback Percentages), if the resulting Holdback Percentages are consistent with the above. For example, if the General Partner reduces the Holdback Percentages for Existing Partners, Retaining Withdrawn Partners and Deceased Partners to 12.5%, 17.5% and 20%, respectively, the General Partner shall have the right to subsequently increase the Holdback Percentages to the Initial Holdback Percentages.
(iv) (A) Notwithstanding anything contained herein to the contrary, the General Partner may increase or decrease the Holdback Percentage for any Partner in any Partner Category (in such capacity, the Subject Partner) pursuant to a majority vote of the Limited Partners (a Holdback Vote); provided, that, notwithstanding anything to the contrary contained herein, the Holdback Percentage applicable to any General Partner shall not be increased or decreased without its prior written consent; provided further, that a Subject Partners Holdback Percentage shall not be (I) increased prior to such time as such Subject Partner (x) is notified by the Partnership of the decision to increase such Subject Partners Holdback Percentage and (y) has, if requested by such Subject Partner,
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been given 30 days to gather and provide information to the Partnership for consideration before a second Holdback Vote (requested by the Subject Partner) or (II) decreased unless such decrease occurs subsequent to an increase in a Subject Partners Holdback Percentage pursuant to a Holdback Vote under this clause (iv); provided further, that such decrease shall not exceed an amount such that such Subject Partners Holdback Percentage is less than the prevailing Holdback Percentage for the Partner Category of such Subject Partner; provided further, that a Partner shall not vote to increase a Subject Partners Holdback Percentage unless such voting Partner determines, in such Partners good faith judgment, that the facts and circumstances indicate that it is reasonably likely that such Subject Partner, or any of such Subject Partners successors or assigns (including such Subject Partners estate or heirs) who at the time of such vote holds the GP-Related Partner Interest or otherwise has the right to receive distributions relating thereto, will not be capable of satisfying any GP-Related Recontribution Amounts that may become due.
(B) A Holdback Vote shall take place at a Partnership meeting. Each of the Limited Partners shall be entitled to cast one vote with respect to the Holdback Vote regardless of such Limited Partners interest in the Partnership. Such vote may be cast by any such Partner in person or by proxy.
(C) If the result of the second Holdback Vote is an increase in a Subject Partners Holdback Percentage, such Subject Partner may submit the decision to an arbitrator, the identity of which is mutually agreed upon by both the Subject Partner and the Partnership; provided, that if the Partnership and the Subject Partner cannot agree upon a mutually satisfactory arbitrator within 10 days of the second Holdback Vote, each of the Partnership and the Subject Partner shall request its candidate for arbitrator to select a third arbitrator satisfactory to such candidates; provided further, that if such candidates fail to agree upon a mutually satisfactory arbitrator within 30 days of such request, the then sitting President of the American Arbitration Association shall unilaterally select the arbitrator. Each Subject Partner that submits the decision of the Partnership pursuant to the second Holdback Vote to arbitration and the Partnership shall estimate their reasonably projected out-of-pocket expenses relating thereto, and each such party shall, to the satisfaction of the arbitrator and prior to any determination being made by the arbitrator, pay the total of such estimated expenses (i.e., both the Subject Partners and the Partnerships expenses) into an escrow account. The arbitrator shall direct the escrow agent to pay out of such escrow account all expenses associated with such arbitration (including costs leading thereto) and to return to the victorious party the entire amount of funds such party paid into such escrow account. If the amount contributed to the escrow account by the losing party is insufficient to cover the expenses of such arbitration, such losing party shall then provide any additional funds necessary to cover such costs to such victorious party. For purposes hereof, the victorious party shall be the Partnership if the Holdback Percentage ultimately determined by the arbitrator is closer to the percentage determined in the second Holdback Vote than it is to the prevailing Holdback Percentage for the Subject Partners Partner Category; otherwise, the Subject Partner shall be the victorious party. The party that is not the victorious party shall be the losing party.
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(D) In the event of a decrease in a Subject Partners Holdback Percentage (1) pursuant to a Holdback Vote under this clause (iv) or (2) pursuant to a decision of an arbitrator under paragraph (C) of this clause (iv), the Partnership shall release and distribute to such Subject Partner any Trust Amounts (and the Trust Income thereon (except as expressly provided herein with respect to using Trust Income as Firm Collateral)) which exceed the required Holdback of such Subject Partner (in accordance with such Subject Partners reduced Holdback Percentage) as though such reduced Holdback Percentage had applied since the increase of the Subject Partners Holdback Percentage pursuant to a previous Holdback Vote under this clause (iv).
(v) (A) If a Partners Holdback Percentage exceeds 15% (such percentage in excess of 15% constituting the Excess Holdback Percentage), such Partner may satisfy the portion of his or her Holdback obligation in respect of his or her Excess Holdback Percentage (such portion constituting such Partners Excess Holdback), and such Partner (or a Withdrawn Partner with respect to amounts contributed to the Trust Account while he or she was a Partner), to the extent his or her Excess Holdback obligation has previously been satisfied in cash, may obtain the release of the Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) satisfying such Partners or Withdrawn Partners Excess Holdback obligation, by pledging, granting a security interest or otherwise making available to the General Partner, on a first priority basis (except as provided below), all or any portion of his or her Firm Collateral in satisfaction of his or her Excess Holdback obligation. Any Partner seeking to satisfy all or any portion of the Excess Holdback utilizing Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Partnership to realize on (if required), such Firm Collateral; provided, that, in the case of entities listed in the Partnerships books and records in which Partners are permitted to pledge or grant a security interest over their interests therein to finance all or a portion of their capital contributions thereto (Pledgable Blackstone Interests), to the extent a first priority security interest is unavailable because of an existing lien on such Firm Collateral, the Partner or Withdrawn Partner seeking to utilize such Firm Collateral shall grant the General Partner a second priority security interest therein in the manner provided above; provided further, that (x) in the case of Pledgable Blackstone Interests, to the extent that neither a first priority nor a second priority security interest is available, or (y) if the General Partner otherwise determines in its good faith judgment that a security interest in Firm Collateral (and the corresponding documents and actions) are not necessary or appropriate, the Partner or Withdrawn Partner shall (in the case of either clause (x) or (y) above) irrevocably instruct in writing the relevant partnership, limited liability company or other entity listed in the Partnerships books and records to remit any and all net proceeds resulting from a Firm Collateral Realization on such Firm Collateral to the Trustee(s) as more fully provided in clause (B) below. The Partnership shall, at the request of any Partner or Withdrawn Partner, assist such Partner or Withdrawn Partner in taking such action as is necessary to enable such Partner or Withdrawn Partner to use Firm Collateral as provided hereunder.
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(B) If upon a sale or other realization of all or any portion of any Firm Collateral (a Firm Collateral Realization), the remaining Firm Collateral is insufficient to cover any Partners or Withdrawn Partners Excess Holdback requirement, then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Firm Collateral Realization (including distributions subject to the repayment of financing sources as in the case of Pledgable Blackstone Interests) shall be paid into the Trust Account to fully satisfy such Excess Holdback requirement (allocated to such Partner or Withdrawn Partner) and shall be deemed to be Trust Amounts for purposes hereunder. Any net proceeds from such Firm Collateral Realization in excess of the amount necessary to satisfy such Excess Holdback requirement shall be distributed to such Partner or Withdrawn Partner.
(C) Upon any valuation or revaluation of Firm Collateral that results in a decreased valuation of such Firm Collateral so that such Firm Collateral is insufficient to cover any Partners or Withdrawn Partners Excess Holdback requirement (including upon a Firm Collateral Realization, if net proceeds therefrom and the remaining Firm Collateral are insufficient to cover any Partners or Withdrawn Partners Excess Holdback requirement), the Partnership shall provide notice of the foregoing to such Partner or Withdrawn Partner and such Partner or Withdrawn Partner shall, within 30 days of receiving such notice, contribute cash (or additional Firm Collateral) to the Trust Account in an amount necessary to satisfy his or her Excess Holdback requirement. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that clause (A) of Section 5.8(d)(ii) shall be deemed inapplicable to a default under this clause (C); provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term GP-Related Defaulting Party where such term appears in such Section 5.8(d)(ii) shall be construed as defaulting party for purposes hereof and (II) the terms Net GP-Related Recontribution Amount and GP-Related Recontribution Amount where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(vi) Any Partner or Withdrawn Partner may (A) obtain the release of any Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) or Firm Collateral, in each case, held in the Trust Account for the benefit of such Partner or Withdrawn Partner or (B) require the Partnership to distribute all or any portion of amounts otherwise required to be placed in the Trust Account (whether cash or Firm Collateral), by obtaining a letter of credit (an L/C) for the benefit of the Trustee(s) in such amounts. Any Partner or Withdrawn Partner choosing to furnish an L/C to the Trustee(s) (in such capacity, an L/C Partner) shall deliver to the Trustee(s) an unconditional and irrevocable L/C from a commercial bank whose (x) short-term deposits are rated at least A-1 by S&P or P-1 by Moodys (if the L/C is for a term of 1 year or less), or (y) long-term deposits are rated at
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least A+ by S&P or A1 by Moodys (if the L/C is for a term of 1 year or more) (each a Required Rating). If the relevant rating of the commercial bank issuing such L/C drops below the relevant Required Rating, the L/C Partner shall supply to the Trustee(s), within 30 days of such occurrence, a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, in lieu of the insufficient L/C. In addition, if the L/C has a term expiring on a date earlier than the latest possible termination date of BREP IX, the Trustee(s) shall be permitted to drawdown on such L/C if the L/C Partner fails to provide a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating, at least 30 days prior to the stated expiration date of such existing L/C. The Trustee(s) shall notify an L/C Partner 10 days prior to drawing on any L/C. The Trustee(s) may (as directed by the Partnership in the case of clause (I) below) draw down on an L/C only if (I) such a drawdown is necessary to satisfy an L/C Partners obligation relating to the Partnerships obligations under the Clawback Provisions or (II) an L/C Partner has not provided a new L/C from a commercial bank whose relevant rating is at least equal to the relevant Required Rating (or the requisite amount of cash and/or Firm Collateral (to the extent permitted hereunder)), at least 30 days prior to the stated expiration of an existing L/C in accordance with this clause (vi). The Trustee(s), as directed by the Partnership, shall return to any L/C Partner his or her L/C upon (1) the termination of the Trust Account and satisfaction of the Partnerships obligations, if any, in respect of the Clawback Provisions, (2) an L/C Partner satisfying his or her entire Holdback obligation in cash and Firm Collateral (to the extent permitted hereunder), or (3) the release, by the Trustee(s), as directed by the Partnership, of all amounts in the Trust Account to the Partners or Withdrawn Partners. If an L/C Partner satisfies a portion of his or her Holdback obligation in cash and/or Firm Collateral (to the extent permitted hereunder) or if the Trustee(s), as directed by the Partnership, release a portion of the amounts in the Trust Account to the Partners or Withdrawn Partners in the Partner Category of such L/C Partner, the L/C of an L/C Partner may be reduced by an amount corresponding to such portion satisfied in cash and/or Firm Collateral (to the extent permitted hereunder) or such portion released by the Trustee(s), as directed by the Partnership; provided, that in no way shall the general release of any Trust Income cause an L/C Partner to be permitted to reduce the amount of an L/C by any amount.
(vii) (A) Any in-kind distributions by the Partnership relating to Carried Interest shall be made in accordance herewith as though such distributions consisted of cash. The Partnership may direct the Trustee(s) to dispose of any in-kind distributions held in the Trust Account at any time. The net proceeds therefrom shall be treated as though initially contributed to the Trust Account.
(B) In lieu of the foregoing, any Existing Partner may pledge or grant a security interest with respect to any in-kind distribution the Special Firm Collateral referred to in the applicable category in the Partnerships books and records; provided, that the initial contribution of such Special Firm Collateral shall initially equal 130% of the required Holdback for a period of 90 days, and thereafter shall equal at least 115% of the required Holdback. Sections 4.1(d)(viii)(C) and (D) shall apply to such Special Firm Collateral. To the extent such Special Firm Collateral exceeds the applicable minimum percentage of the required Holdback specified in the first sentence of this clause (vii)(B), the related Partner may obtain a release of such excess amount from the Trust Account.
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(viii) (A) Any Limited Partner or Withdrawn Partner may satisfy all or any portion of his or her Holdback (excluding any Excess Holdback), and such Partner or a Withdrawn Partner may, to the extent his or her Holdback (excluding any Excess Holdback) has been previously satisfied in cash or by the use of an L/C as provided herein, obtain a release of Trust Amounts (but not the Trust Income thereon which shall remain in the Trust Account and allocated to such Partner or Withdrawn Partner) that satisfy such Partners or Withdrawn Partners Holdback (excluding any Excess Holdback) by pledging or otherwise granting a security interest to the Trustee(s) on a first priority basis all of his or her Special Firm Collateral in a particular Qualifying Fund, which at all times must equal or exceed the amount of the Holdback distributed to the Partner or Withdrawn Partner (as more fully set forth below). Any Partner seeking to satisfy such Partners Holdback utilizing Special Firm Collateral shall sign such documents and otherwise take such other action as is necessary or appropriate (in the good faith judgment of the General Partner) to perfect a first priority security interest in, and otherwise assure the ability of the Trustee(s) to realize on (if required), such Special Firm Collateral.
(B) If upon a distribution, withdrawal, sale, liquidation or other realization of all or any portion of any Special Firm Collateral (a Special Firm Collateral Realization), the remaining Special Firm Collateral (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund and is being used in connection with an Excess Holdback) is insufficient to cover any Partners or Withdrawn Partners Holdback (when taken together with other means of satisfying the Holdback as provided herein (i.e., cash contributed to the Trust Account or an L/C in the Trust Account)), then up to 100% of the net proceeds otherwise distributable to such Partner or Withdrawn Partner from such Special Firm Collateral Realization (which shall not include the amount of Firm Collateral that consists of a Qualifying Fund or other asset and is being used in connection with an Excess Holdback) shall be paid into the Trust (and allocated to such Partner or Withdrawn Partner) to fully satisfy such Holdback and shall be deemed thereafter to be Trust Amounts for purposes hereunder. Any net proceeds from such Special Firm Collateral Realization in excess of the amount necessary to satisfy such Holdback (excluding any Excess Holdback) shall be distributed to such Partner or Withdrawn Partner. To the extent a Qualifying Fund distributes Securities to a Partner or Withdrawn Partner in connection with a Special Firm Collateral Realization, such Partner or Withdrawn Partner shall be required to promptly fund such Partners or Withdrawn Partners deficiency with respect to his or her Holdback in cash or an L/C.
(C) Upon any valuation or revaluation of the Special Firm Collateral and/or any adjustment in the Applicable Collateral Percentage applicable to a Qualifying Fund (as provided in the Partnerships books and records), if such Partners or Withdrawn Partners Special Firm Collateral is valued at less than such Partners Holdback (excluding any Excess Holdback) as provided in the Partnerships books and records, taking into account other
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permitted means of satisfying the Holdback hereunder, the Partnership shall provide notice of the foregoing to such Partner or Withdrawn Partner and, within 10 Business Days of receiving such notice, such Partner or Withdrawn Partner shall contribute cash or additional Special Firm Collateral to the Trust Account in an amount necessary to make up such deficiency. If any such Partner or Withdrawn Partner defaults upon his or her obligations under this clause (C), then Section 5.8(d)(ii) shall apply thereto; provided, that the first sentence of Section 5.8(d)(ii)(A) shall be deemed inapplicable to such default; provided further, that for purposes of applying Section 5.8(d)(ii) to a default under this clause (C): (I) the term GP-Related Defaulting Party where such term appears in such Section 5.8(d)(ii) shall be construed as defaulting party for purposes hereof and (II) the terms Net GP-Related Recontribution Amount and GP-Related Recontribution Amount where such terms appear in such Section 5.8(d)(ii) shall be construed as the amount due pursuant to this clause (C).
(D) Upon a Partner becoming a Withdrawn Partner, at any time thereafter the General Partner may revoke the ability of such Withdrawn Partner to use Special Firm Collateral as set forth in this Section 4.1(d)(viii), notwithstanding anything else in this Section 4.1(d)(viii). In that case the provisions of clause (C) above shall apply to the Withdrawn Partners obligation to satisfy the Holdback (except that 30 days notice of such revocation shall be given), given that the Special Firm Collateral is no longer available to satisfy any portion of the Holdback (excluding any Excess Holdback).
(E) Nothing in this Section 4.1(d)(viii) shall prevent any Partner or Withdrawn Partner from using any amount of such Partners interest in a Qualifying Fund as Firm Collateral; provided, that at all times Section 4.1(d)(v) and this Section 4.1(d)(viii) are each satisfied.
Section 4.2. Interest. Interest on the balances of the Partners capital related to the Partners GP-Related Partner Interests (excluding capital invested in GP-Related Investments and, if deemed appropriate by the General Partner, capital invested in any other investment of the Partnership) shall be credited to the Partners GP-Related Capital Accounts at the end of each accounting period pursuant to Section 5.2, or at any other time as determined by the General Partner, at rates determined by the General Partner from time to time, and shall be charged as an expense of the Partnership.
Section 4.3. Withdrawals of Capital. No Partner may withdraw capital related to such Partners GP-Related Partner Interests from the Partnership except (i) by way of distributions of cash or other property pursuant to Section 5.8, (ii) as otherwise expressly provided in this Agreement or (iii) as determined by the General Partner.
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ARTICLE V
PARTICIPATION IN PROFITS AND LOSSES
Section 5.1. General Accounting Matters. (a) GP-Related Net Income (Loss) shall be determined by the General Partner at the end of each accounting period and shall be allocated as described in Section 5.4.
(b) GP-Related Net Income (Loss) means:
(i) from any activity of the Partnership related to the GP-Related BREP IX Interest for any accounting period (other than GP-Related Net Income (Loss) from GP-Related Investments described below), (x) the gross income realized by the Partnership from such activity during such accounting period less (y) all expenses of the Partnership, and all other items that are deductible from gross income, for such accounting period that are allocable to such activity (determined as provided below);
(ii) from any GP-Related Investment for any accounting period in which such GP-Related Investment has not been sold or otherwise disposed of, (x) the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (y) all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment (determined as provided below); and
(iii) from any GP-Related Investment for the accounting period in which such GP-Related Investment is sold or otherwise disposed of, (x) the sum of the gross proceeds from the sale or other disposition of such GP-Related Investment and the gross amount of dividends, interest or other income received by the Partnership from such GP-Related Investment during such accounting period less (y) the sum of the cost or other basis to the Partnership of such GP-Related Investment and all expenses of the Partnership for such accounting period that are allocable to such GP-Related Investment.
(c) GP-Related Net Income (Loss) shall be determined in accordance with the accounting method used by the Partnership for U.S. federal income tax purposes with the following adjustments: (i) any income of the Partnership that is exempt from U.S. federal income taxation and not otherwise taken into account in computing GP-Related Net Income (Loss) shall be added to such taxable income or loss; (ii) if any asset has a value in the books of the Partnership that differs from its adjusted tax basis for U.S. federal income tax purposes, any depreciation, amortization or gain resulting from a disposition of such asset shall be calculated with reference to such value; (iii) upon an adjustment to the value of any asset in the books of the Partnership pursuant to Treasury Regulations Section 1.704-1(b)(2), the amount of the adjustment shall be included as gain or loss in computing such taxable income or loss; (iv) any expenditures of the Partnership not deductible in computing taxable income or loss, not properly capitalizable and not otherwise taken into account in computing GP-Related Net Income (Loss) pursuant to this definition shall be treated as deductible items; (v) any income from a GP-Related Investment that is payable to Partnership employees in respect of phantom interests in such GP-Related Investment awarded by the General Partner to employees shall be included as an
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expense in the calculation of GP-Related Net Income (Loss) from such GP-Related Investment, and (vi) items of income and expense (including interest income and overhead and other indirect expenses) of the Partnership, Holdings and other Affiliates of the Partnership shall be allocated among the Partnership, Holdings and such Affiliates, among various Partnership activities and GP-Related Investments and between accounting periods, in each case as determined by the General Partner. Any adjustments to GP-Related Net Income (Loss) by the General Partner, including adjustments for items of income accrued but not yet received, unrealized gains, items of expense accrued but not yet paid, unrealized losses, reserves (including reserves for taxes, bad debts, actual or threatened litigation, or any other expenses, contingencies or obligations) and other appropriate items shall be made in accordance with GAAP; provided, that the General Partner shall not be required to make any such adjustment.
(d) An accounting period shall be a Fiscal Year, except that, at the option of the General Partner, an accounting period will terminate and a new accounting period will begin on the admission date of an additional Partner or the Settlement Date of a Withdrawn Partner, if any such date is not the first day of a Fiscal Year. If any event referred to in the preceding sentence occurs and the General Partner does not elect to terminate an accounting period and begin a new accounting period, then the General Partner may make such adjustments as it deems appropriate to the Partners GP-Related Profit Sharing Percentages for the accounting period in which such event occurs (prior to any allocations of GP-Related Unallocated Percentages or adjustments to GP-Related Profit Sharing Percentages pursuant to Section 5.3) to reflect the Partners average GP-Related Profit Sharing Percentages during such accounting period; provided, that the GP-Related Profit Sharing Percentages of Partners in GP-Related Net Income (Loss) from GP-Related Investments acquired during such accounting period will be based on GP-Related Profit Sharing Percentages in effect when each such GP-Related Investment was acquired.
(e) In establishing GP-Related Profit Sharing Percentages and allocating GP-Related Unallocated Percentages pursuant to Section 5.3, the General Partner may consider such factors as it deems appropriate.
(f) All determinations, valuations and other matters of judgment required to be made for accounting purposes under this Agreement shall be made by the General Partner and approved by the Partnerships independent accountants. Such approved determinations, valuations and other accounting matters shall be conclusive and binding on all Partners, all Withdrawn Partners, their successors, heirs, estates or legal representatives and any other person, and to the fullest extent permitted by law no such person shall have the right to an accounting or an appraisal of the assets of the Partnership or any successor thereto.
Section 5.2. GP-Related Capital Accounts.
(a) There shall be established for each Partner in the books of the Partnership, to the extent and at such times as may be appropriate, one or more capital accounts as the General Partner may deem to be appropriate for purposes of accounting for such Partners interests in the capital of the Partnership related to the GP-Related BREP IX Interest and the GP-Related Net Income (Loss) of the Partnership (each a GP-Related Capital Account).
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(b) As of the end of each accounting period or, in the case of a contribution to the Partnership by one or more of the Partners with respect to such Partner or Partners GP-Related Partner Interests or a distribution by the Partnership to one or more of the Partners with respect to such Partner or Partners GP-Related Partner Interests, at the time of such contribution or distribution, (i) the appropriate GP-Related Capital Accounts of each Partner shall be credited with the following amounts: (A) the amount of cash and the value of any property contributed by such Partner to the capital of the Partnership related to such Partners GP-Related Partner Interest during such accounting period, (B) the GP-Related Net Income allocated to such Partner for such accounting period and (C) the interest credited on the balance of such Partners capital related to such Partners GP-Related Partner Interest for such accounting period pursuant to Section 4.2; and (ii) the appropriate GP-Related Capital Accounts of each Partner shall be debited with the following amounts: (x) the amount of cash, the principal amount of any subordinated promissory note of the Partnership referred to in Section 6.5 (as such amount is paid) and the value of any property distributed to such Partner during such accounting period with respect to such Partners GP-Related Partner Interest and (y) the GP-Related Net Loss allocated to such Partner for such accounting period.
Section 5.3. GP-Related Profit Sharing Percentages.
(a) Prior to the beginning of each annual accounting period, the General Partner shall establish the profit sharing percentage (the GP-Related Profit Sharing Percentage) of each Partner in each category of GP-Related Net Income (Loss) for such annual accounting period pursuant to Section 5.1(a) taking into account such factors as the General Partner deems appropriate; provided, that (i) the General Partner may elect to establish GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment acquired by the Partnership during such accounting period at the time such GP-Related Investment is acquired in accordance with paragraph (c) below and (ii) GP-Related Net Income (Loss) for such accounting period from any GP-Related Investment shall be allocated in accordance with the GP-Related Profit Sharing Percentages in such GP-Related Investment established in accordance with paragraph (c) below. The General Partner may establish different GP-Related Profit Sharing Percentages for any Partner in different categories of GP-Related Net Income (Loss). In the case of the Withdrawal of a Partner, such former Partners GP-Related Profit Sharing Percentages shall be allocated by the General Partner to one or more of the remaining Partners as the General Partner shall determine. In the case of the admission of any Partner to the Partnership as an additional Partner, the GP-Related Profit Sharing Percentages of the other Partners shall be reduced by an amount equal to the GP-Related Profit Sharing Percentage allocated to such new Partner pursuant to Section 6.1(b); such reduction of each other Partners GP-Related Profit Sharing Percentage shall be pro rata based upon such Partners GP-Related Profit Sharing Percentage as in effect immediately prior to the admission of the new Partner. Notwithstanding the foregoing, the General Partner may also adjust the GP-Related Profit Sharing Percentage of any Partner for any annual accounting period at the end of such annual accounting period in its sole discretion.
(b) The General Partner may elect to allocate to the Partners less than 100% of the GP-Related Profit Sharing Percentages of any category for any annual accounting period at the time specified in Section 5.3(a) for the annual fixing of GP-Related Profit Sharing Percentages (any remainder of such GP-Related Profit Sharing Percentages being called a GP-
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Related Unallocated Percentage); provided, that any GP-Related Unallocated Percentage in any category of GP-Related Net Income (Loss) for any annual accounting period that is not allocated by the General Partner within 90 days after the end of such accounting period shall be deemed to be allocated among all the Partners (including the General Partner) in the manner determined by the General Partner in its sole discretion.
(c) Unless otherwise determined by the General Partner in a particular case, (i) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from any GP-Related Investment shall be allocated in proportion to the Partners respective GP-Related Capital Contributions in respect of such GP-Related Investment and (ii) GP-Related Profit Sharing Percentages in GP-Related Net Income (Loss) from each GP-Related Investment shall be fixed at the time such GP-Related Investment is acquired and shall not thereafter change, subject to any repurchase rights established by the General Partner pursuant to Section 5.7.
Section 5.4. Allocations of GP-Related Net Income (Loss).
(a) Except as provided in Section 5.4(d), GP-Related Net Income of the Partnership for each GP-Related Investment shall be allocated to the GP-Related Capital Accounts related to such GP-Related Investment of all the Partners participating in such GP-Related Investment (including the General Partner): first, in proportion to and to the extent of the amount of Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest distributed to the Partners; second, to Partners that received Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest in years prior to the years such GP-Related Net Income is being allocated to the extent such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest exceeded GP-Related Net Income allocated to such Partners in such earlier years; and third, to the Partners in the same manner that such Non-Carried Interest (other than amounts representing a return of GP-Related Capital Contributions) or Carried Interest would have been distributed if cash were available to distribute with respect thereto.
(b) GP-Related Net Loss of the Partnership shall be allocated as follows: (i) GP-Related Net Loss relating to realized losses suffered by BREP IX and allocated to the Partnership with respect to its pro rata share thereof (based on capital contributions made by the Partnership to BREP IX with respect to the GP-Related BREP IX Interest) shall be allocated to the Partners in accordance with each Partners Non-Carried Interest Sharing Percentage with respect to the GP-Related Investment giving rise to such loss suffered by BREP IX and (ii) GP-Related Net Loss relating to realized losses suffered by BREP IX and allocated to the Partnership with respect to the Carried Interest shall be allocated in accordance with a Partners (including a Withdrawn Partners) Carried Interest Give Back Percentage (as of the date of such loss) (subject to adjustment pursuant to Section 5.8(e)).
(c) Notwithstanding Section 5.4(a) above, GP-Related Net Income relating to Carried Interest allocated after the allocation of a GP-Related Net Loss pursuant to clause (ii) of Section 5.4(b) shall be allocated in accordance with such Carried Interest Give Back Percentages until such time as the Partners have been allocated GP-Related Net Income relating to Carried Interest equal to the aggregate amount of GP-Related Net Loss previously allocated in accordance with clause (ii) of Section 5.4(b). Withdrawn Partners shall remain Partners for purposes of allocating such GP-Related Net Loss with respect to Carried Interest.
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(d) To the extent the Partnership has any GP-Related Net Income (Loss) for any accounting period unrelated to BREP IX, such GP-Related Net Income (Loss) will be allocated in accordance with GP-Related Profit Sharing Percentages prevailing at the beginning of such accounting period.
(e) The General Partner may authorize from time to time advances to Partners (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners who are also executive officers of The Blackstone Group Inc. or any Affiliate thereof) against their allocable shares of GP-Related Net Income (Loss).
(f) Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 5.5. Liability of Partners. Except as otherwise provided in the Partnership Act or as expressly provided in this Agreement, no Partner shall be personally obligated for any debt, obligation or liability of the Partnership or of any other Partner solely by reason of being a Partner. In no event shall any Partner or Withdrawn Partner (i) be obligated to make any capital contribution or payment to or on behalf of the Partnership or (ii) have any liability to return distributions received by such Partner from the Partnership, in each case except as specifically provided in Section 4.1(d) or Section 5.8 or otherwise in this Agreement, as such Partner shall otherwise expressly agree in writing or as may be required by applicable law.
Section 5.6. [Intentionally omitted.]
Section 5.7. Repurchase Rights, etc. The General Partner may from time to time establish such repurchase rights and/or other requirements with respect to the Partners GP-Related Partner Interests relating to GP-Related BREP IX Investments as the General Partner may determine. The General Partner shall have authority to (a) withhold any distribution otherwise payable to any Partner until any such repurchase rights have lapsed or any such requirements have been satisfied, (b) pay any distribution to any Partner that is Contingent as of the distribution date and require the refund of any portion of such distribution that is Contingent as of the Withdrawal Date of such Partner, (c) amend any previously established repurchase rights or other requirements from time to time and (d) make such exceptions thereto as it may determine on a case by case basis.
Section 5.8. Distributions.
(a) (i) The Partnership shall make distributions of available cash (subject to reserves and other adjustments as provided herein) or other property to Partners with respect to such Partners GP-Related Partner Interests at such times and in such amounts as are determined by the General Partner. The General Partner shall, if it deems it appropriate, determine the availability for distribution of, and distribute, cash or other property separately for each category of GP-Related Net Income (Loss) established pursuant to Section 5.1(a). Distributions of cash or
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other property with respect to Non-Carried Interest shall be made among the Partners in accordance with their respective Non-Carried Interest Sharing Percentages, and, subject to Section 4.1(d) and Section 5.8(e), distributions of cash or other property with respect to Carried Interest shall be made among Partners in accordance with their respective Carried Interest Sharing Percentages.
(ii) At any time that a sale, exchange, transfer or other disposition by BREP IX of a portion of a GP-Related Investment is being considered by the Partnership (a GP-Related Disposable Investment), at the election of the General Partner each Partners GP-Related Partner Interest with respect to such GP-Related Investment shall be vertically divided into two separate GP-Related Partner Interests, a GP-Related Partner Interest attributable to the GP-Related Disposable Investment (a Partners GP-Related Class B Interest), and a GP-Related Partner Interest attributable to such GP-Related Investment excluding the GP-Related Disposable Investment (a Partners GP-Related Class A Interest). Distributions (including those resulting from a sale, transfer, exchange or other disposition by BREP IX) relating to a GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class B Interests with respect to such GP-Related Investment in accordance with their GP-Related Profit Sharing Percentages relating to such GP-Related Class B Interests, and distributions (including those resulting from the sale, transfer, exchange or other disposition by BREP IX) relating to a GP-Related Investment excluding such GP-Related Disposable Investment (with respect to both Carried Interest and Non-Carried Interest) shall be made only to holders of GP-Related Class A Interests with respect to such GP-Related Investment in accordance with their respective GP-Related Profit Sharing Percentages relating to such GP-Related Class A Interests. Except as provided above, distributions of cash or other property with respect to each category of GP-Related Net Income (Loss) shall be allocated among the Partners in the same proportions as the allocations of GP-Related Net Income (Loss) of each such category.
(b) Subject to the Partnerships having sufficient available cash in the reasonable judgment of the General Partner, the Partnership shall make cash distributions to each Partner with respect to each Fiscal Year of the Partnership in an aggregate amount at least equal to the total U.S. federal, New York State and New York City income and other taxes that would be payable by such Partner with respect to all categories of GP-Related Net Income (Loss) allocated to such Partner for such Fiscal Year, the amount of which shall be calculated (i) on the assumption that each Partner is an individual subject to the then prevailing maximum rate of U.S. federal, New York State and New York City and other income taxes (including, without limitation, taxes under Sections 1401 and 1411 of the Code), (ii) taking into account (x) the limitations on the deductibility of expenses and other items for U.S. federal income tax purposes and (y) the character (e.g., long-term or short-term capital gain or ordinary or exempt) of the applicable income) and (iii) taking into account any differential in applicable rates due to the type and character of GP-Related Net Income (Loss) allocated to such Partner. Notwithstanding the provisions of the foregoing sentence, the General Partner may refrain from making any distribution if, in the reasonable judgment of the General Partner, such distribution is prohibited by applicable law.
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(c) The General Partner may provide that the GP-Related Partner Interest of any Partner or employee (including such Partners or employees right to distributions and investments of the Partnership related thereto) may be subject to repurchase by the Partnership during such period as the General Partner shall determine (a Repurchase Period). Any Contingent distributions from GP-Related Investments subject to repurchase rights will be withheld by the Partnership and will be distributed to the recipient thereof (together with interest thereon at rates determined by the General Partner from time to time) as the recipients rights to such distributions become Non-Contingent (by virtue of the expiration of the applicable Repurchase Period or otherwise). The General Partner may elect in an individual case to have the Partnership distribute any Contingent distribution to the applicable recipient thereof irrespective of whether the applicable Repurchase Period has lapsed. If a Partner Withdraws from the Partnership for any reason other than his or her death, Total Disability or Incompetence, the undistributed share of any GP-Related Investment that remains Contingent as of the applicable Withdrawal Date shall be repurchased by the Partnership at a purchase price determined at such time by the General Partner. Unless determined otherwise by the General Partner, the repurchased portion thereof will be allocated among the remaining Partners with interests in such GP-Related Investment in proportion to their respective percentage interests in such GP-Related Investment, or if no other Partner has a percentage interest in such specific GP-Related Investment, to the General Partner; provided, that the General Partner may allocate the Withdrawn Partners share of unrealized investment income from a repurchased GP-Related Investment attributable to the period after the Withdrawn Partners Withdrawal Date on any basis it may determine, including to existing or new Partners who did not previously have interests in such GP-Related Investment, except that, in any event, each Investor Special Partner shall be allocated a share of such unrealized investment income equal to its respective GP-Related Profit Sharing Percentage of such unrealized investment income.
(d) (i) (A) If Associates IX is obligated under the Clawback Provisions or Giveback Provisions to contribute to BREP IX a Clawback Amount or a Giveback Amount (other than a Capital Commitment Giveback Amount) and the Partnership is obligated to contribute any such amount to Associates IX, directly or indirectly, in respect of the Partnerships GP-Related Associates IX Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount being herein called a GP-Related Giveback Amount), the General Partner shall call for such amounts as are necessary to satisfy such obligations of the Partnership as determined by the General Partner, in which case each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership (and the Other Fund GPs) with respect to Carried Interest (and/or Non-Carried Interest in the case of a GP-Related Giveback Amount) (the GP-Related Recontribution Amount) which equals (I) the product of (a) a Partners or Withdrawn Partners Carried Interest Give Back Percentage and (b) the aggregate Clawback Amount payable by the Partnership in the case of Clawback Amounts and (II) with respect to a GP-Related Giveback Amount, such Partners pro rata share of prior distributions of Carried Interest and/or Non-Carried Interest in connection with (a) the GP-Related BREP IX Investment giving rise to the GP-Related Giveback Amount, (b) if the amounts contributed pursuant to clause (II)(a) above are insufficient to satisfy such GP-Related Giveback Amount, GP-Related BREP IX Investments other than the one giving rise to such obligation, but only those amounts received by the Partners with an interest in the GP-Related BREP IX Investment referred to in clause (II)(a) above, and (c) if the GP-Related Giveback Amount pursuant to an applicable BREP IX Agreement is unrelated to a specific GP-Related BREP IX Investment, all GP-Related BREP IX Investments. Each Partner and Withdrawn Partner shall
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promptly contribute to the Partnership, along with satisfying his or her comparable obligations to the Other Fund GPs, if any, upon such call, such Partners or Withdrawn Partners GP-Related Recontribution Amount, less the amount paid out of the Trust Account on behalf of such Partner or Withdrawn Partner by the Trustee(s) pursuant to written instructions from the Partnership, or if applicable, any of the Other Fund GPs with respect to Carried Interest (and/or Non-Carried Interest in the case of GP-Related Giveback Amounts) (the Net GP-Related Recontribution Amount), irrespective of the fact that the amounts in the Trust Account may be sufficient on an aggregate basis to satisfy the Partnerships and the Other Fund GPs obligation under the Clawback Provisions and/or Giveback Provisions; provided, that to the extent a Partners or Withdrawn Partners share of the amount paid with respect to the Clawback Amount or the GP-Related Giveback Amount exceeds his or her GP-Related Recontribution Amount, such excess shall be repaid to such Partner or Withdrawn Partner as promptly as reasonably practicable, subject to clause (ii) below; provided further, that such written instructions from the General Partner shall specify each Partners and Withdrawn Partners GP-Related Recontribution Amount. Prior to such time, the General Partner may, in its discretion (but shall be under no obligation to), provide notice that in the General Partners judgment, the potential obligations in respect of the Clawback Provisions or the Giveback Provisions will probably materialize (and an estimate of the aggregate amount of such obligations); provided further, that any amount from a Partners Trust Account used to pay any GP-Related Giveback Amount (or such lesser amount as may be required by the General Partner) shall be contributed by such Partner to such Partners Trust Account no later than 30 days after the Net GP-Related Recontribution Amount is paid with respect to such GP-Related Giveback Amount.
(B) To the extent any Partner or Withdrawn Partner has satisfied any Holdback obligation with Firm Collateral, such Partner or Withdrawn Partner shall, within 10 days of the General Partners call for GP-Related Recontribution Amounts, make a cash payment into the Trust Account in an amount equal to the amount of the Holdback obligation satisfied with such Firm Collateral, or such lesser amount such that the amount in the Trust Account allocable to such Partner or Withdrawn Partner equals the sum of (I) such Partners or Withdrawn Partners GP-Related Recontribution Amount and (II) any similar amounts payable to any of the Other Fund GPs. Immediately upon receipt of such cash, the Trustee(s) shall take such steps as are necessary to release such Firm Collateral of such Partner or Withdrawn Partner equal to the amount of such cash payment. If the amount of such cash payment is less than the amount of Firm Collateral of such Partner or Withdrawn Partner, the balance of such Firm Collateral if any, shall be retained to secure the payment of GP-Related Deficiency Contributions, if any, and shall be fully released upon the satisfaction of the Partnerships and the Other Fund GPs obligation to pay the Clawback Amount. The failure of any Partner or Withdrawn Partner to make a cash payment in accordance with this clause (B) (to the extent applicable) shall constitute a default under Section 5.8(d)(ii) as if such cash payment hereunder constitutes a Net GP-Related Recontribution Amount under Section 5.8(d)(ii). Solely to the extent required by the BREP IX Partnership Agreement, each partner of the General Partner shall have the same obligations as a Partner (which obligations shall be subject to the same limitations as the obligations of a Partner) under this Section 5.8(d)(i)(B) and under Section 5.8(d)(ii)(A) with respect to such partners pro rata share of any Clawback Amount and solely to the extent that the Partnership has insufficient funds to meet the Partnerships obligations under the BREP IX Partnership Agreement.
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(ii) (A) In the event any Partner or Withdrawn Partner (a GP-Related Defaulting Party) fails to recontribute all or any portion of such GP-Related Defaulting Partys Net GP-Related Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Carried Interest Give Back Percentages in the case of Clawback Amounts, and GP-Related Profit Sharing Percentages in the case of GP-Related Giveback Amounts (as more fully described in clause (II) of Section 5.8(d)(i)(A) above)), such amounts as are necessary to fulfill the GP-Related Defaulting Partys obligation to pay such GP-Related Defaulting Partys Net GP-Related Recontribution Amount (a GP-Related Deficiency Contribution) if the General Partner determines in its good faith judgment that the Partnership (or an Other Fund GP) will be unable to collect such amount in cash from such GP-Related Defaulting Party for payment of the Clawback Amount or GP-Related Giveback Amount, as the case may be, at least 20 Business Days prior to the latest date that the Partnership, and the Other Fund GPs, if applicable, are permitted to pay the Clawback Amount or GP-Related Giveback Amount, as the case may be; provided, that, subject to Section 5.8(e), no Partner or Withdrawn Partner shall as a result of such GP-Related Deficiency Contribution be required to contribute an amount in excess of 167% of the amount of the Net GP-Related Recontribution Amount initially requested from such Partner or Withdrawn Partner in respect of such default.
(B) Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the GP-Related Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the GP-Related Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such GP-Related Defaulting Party becoming a GP-Related Defaulting Party) to set-off as appropriate and apply against such GP-Related Defaulting Partys Net GP-Related Recontribution Amount any amounts otherwise payable to the GP-Related Defaulting Party by the Partnership or any Affiliate thereof (including amounts unrelated to Carried Interest, such as returns of capital and profit thereon). Each Partner and Withdrawn Partner hereby grants to the General Partner a security interest, effective upon such Partner or Withdrawn Partner becoming a GP-Related Defaulting Party, in all accounts receivable and other rights to receive payment from any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner and Withdrawn Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or Withdrawn Partner or in the name of the General Partner, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Net GP-Related Recontribution Amount of a GP-Related Defaulting Party from the date such Net GP-Related Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
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(C) Any Partners or Withdrawn Partners failure to make a GP-Related Deficiency Contribution shall cause such Partner or Withdrawn Partner to be a GP-Related Defaulting Party with respect to such amount. The Partnership shall first seek any remaining Trust Amounts (and Trust Income thereon) allocated to such Partner or Withdrawn Partner to satisfy such Partners or Withdrawn Partners obligation to make a GP-Related Deficiency Contribution before seeking cash contributions from such Partner or Withdrawn Partner in satisfaction of such Partners or Withdrawn Partners obligation to make a GP-Related Deficiency Contribution.
(iii) In the event any Partner or Withdrawn Partner initially fails to recontribute all or any portion of such Partner or Withdrawn Partners pro rata share of any Clawback Amount pursuant to Section 5.8(d)(i)(A), the Partnership shall use its reasonable efforts to collect the amount which such Partner or Withdrawn Partner so fails to recontribute.
(iv) A Partners or Withdrawn Partners obligation to make contributions to the Partnership under this Section 5.8(d) shall survive the termination of the Partnership.
(e) The Partners acknowledge that the General Partner will (and is hereby authorized to) take such steps as it deems appropriate, in its good faith judgment, to further the objective of providing for the fair and equitable treatment of all Partners, including by allocating Aggregate Net Losses from Writedowns (as defined in the BREP IX Agreements) and Losses (as defined in the BREP IX Agreements) on GP-Related BREP IX Investments that have been the subject of a writedown and/or Net Loss (as defined in the BREP IX Agreements) (each, a Loss Investment) to those Partners who participated in such Loss Investments based on their Carried Interest Sharing Percentage therein to the extent that such Partners receive or have received Carried Interest distributions from other GP-Related BREP IX Investments. Consequently and notwithstanding anything herein to the contrary, adjustments to Carried Interest distributions shall be made as set forth in this Section 5.8(e).
(i) At the time the Partnership is making Carried Interest distributions in connection with a GP-Related BREP IX Investment (the Subject Investment) that have been reduced under any BREP IX Agreement as a result of one or more Loss Investments, the General Partner shall calculate amounts distributable to or due from each such Partner as follows:
(A) determine each Partners share of each such Loss Investment based on his or her Carried Interest Sharing Percentage in each such Loss Investment (which may be zero) to the extent such Loss Investment has reduced the Carried Interest distributions otherwise available for distribution to all Partners (indirectly through the Partnership from BREP IX) from the Subject Investment (such reduction, the Loss Amount);
(B) determine the amount of Carried Interest distributions otherwise distributable to such Partner with respect to the Subject Investment (indirectly through the Partnership from BREP IX) before any reduction in respect of the amount determined in clause (A) above (the Unadjusted Carried Interest Distributions); and
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(C) subtract (I) the Loss Amounts relating to all Loss Investments from (II) the Unadjusted Carried Interest Distributions for such Partner, to determine the amount of Carried Interest distributions to actually be paid to such Partner (Net Carried Interest Distribution).
To the extent that the Net Carried Interest Distribution for a Partner as calculated in this clause (i) is a negative number, the General Partner shall (I) notify such Partner, at or prior to the time such Carried Interest distributions are actually made to the Partners, of his or her obligation to recontribute to the Partnership prior Carried Interest distributions (a Net Carried Interest Distribution Recontribution Amount), up to the amount of such negative Net Carried Interest Distribution, and (II) to the extent amounts recontributed pursuant to clause (I) are insufficient to satisfy such negative Net Carried Interest Distribution amount, reduce future Carried Interest distributions otherwise due such Partner, up to the amount of such remaining negative Net Carried Interest Distribution. If a Partners (x) Net Carried Interest Distribution Recontribution Amount exceeds (y) the aggregate amount of prior Carried Interest distributions less the amount of tax thereon, calculated based on the Assumed Tax Rate (as defined in the BREP IX Agreements) in effect in the Fiscal Years of such distributions (the Excess Tax-Related Amount), then such Partner may, in lieu of paying such Partners Excess Tax-Related Amount, defer such amounts as set forth below. Such deferred amount shall accrue interest at the Prime Rate. Such deferred amounts shall be reduced and repaid by the amount of Carried Interest otherwise distributable to such Partner in connection with future Carried Interest distributions until such balance is reduced to zero. Any deferred amounts shall be payable in full upon the earlier of (i) such time as the Clawback Amount is determined (as provided herein) and (ii) such time as the Partner becomes a Withdrawn Partner.
To the extent there is an amount of negative Net Carried Interest Distribution with respect to a Partner remaining after the application of this clause (i), notwithstanding clause (II) of the preceding paragraph, such remaining amount of negative Net Carried Interest Distribution shall be allocated to the other Partners pro rata based on each of their Carried Interest Sharing Percentages in the Subject Investment.
A Partner who fails to pay a Net Carried Interest Distribution Recontribution Amount promptly upon notice from the General Partner (as provided above) shall be deemed a GP-Related Defaulting Party for all purposes hereof.
A Partner may satisfy in part any Net Carried Interest Distribution Recontribution Amount from cash that is then subject to a Holdback, to the extent that the amounts that remain subject to a Holdback satisfy the Holdback requirements hereof as they relate to the reduced amount of aggregate Carried Interest distributions received by such Partner (taking into account any Net Carried Interest Distribution Recontribution Amount contributed to the Partnership by such Partner).
Any Net Carried Interest Distribution Recontribution Amount contributed by a Partner, including amounts of cash subject to a Holdback as provided above, shall increase the amount available for distribution to the other Partners as Carried Interest distributions with respect to the Subject Investment; provided, that any such amounts then subject to a Holdback may be so distributed to the other Partners to the extent a Partner receiving such distribution has satisfied the Holdback requirements with respect to such distribution (taken together with the other Carried Interest distributions received by such Partner to date).
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(ii) In the case of Clawback Amounts which are required to be contributed to the Partnership as otherwise provided herein, the obligation of the Partners with respect to any Clawback Amount shall be adjusted by the General Partner as follows:
(A) determine each Partners share of any Net Losses (as defined in the BREP IX Agreements) in any GP-Related BREP IX Investments which gave rise to the Clawback Amount (i.e., the Losses that followed the last GP-Related BREP IX Investment with respect to which Carried Interest distributions were made), based on such Partners Carried Interest Sharing Percentage in such GP-Related BREP IX Investments;
(B) determine each Partners obligation with respect to the Clawback Amount based on such Partners Carried Interest Give Back Percentage as otherwise provided herein; and
(C) subtract the amount determined in clause (B) above from the amount determined in clause (A) above with respect to each Partner to determine the amount of adjustment to each Partners share of the Clawback Amount (a Partners Clawback Adjustment Amount).
A Partners share of the Clawback Amount shall for all purposes hereof be decreased by such Partners Clawback Adjustment Amount, to the extent it is a negative number (except to the extent expressly provided below). A Partners share of the Clawback Amount shall for all purposes hereof be increased by such Partners Clawback Adjustment Amount (to the extent it is a positive number); provided, that in no way shall a Partners aggregate obligation to satisfy a Clawback Amount as a result of this clause (ii) exceed the aggregate Carried Interest distributions received by such Partner. To the extent a positive Clawback Adjustment Amount remains after the application of this clause (ii) with respect to a Partner, such remaining Clawback Adjustment Amount shall be allocated to the Partners (including any Partner whose Clawback Amount was increased pursuant to this clause (ii)) pro rata based on their Carried Interest Give Back Percentages (determined without regard to this clause (ii)).
Any distribution or contribution adjustments pursuant to this Section 5.8(e) by the General Partner shall be based on its good faith judgment, and no Partner shall have any claim against the Partnership, the General Partner or any other Partners as a result of any adjustment made as set forth above. This Section 5.8(e) applies to all Partners, including Withdrawn Partners.
It is agreed and acknowledged that this Section 5.8(e) is an agreement among the Partners and in no way modifies the obligations of each Partner regarding the Clawback Amount as provided in the BREP IX Agreements.
Section 5.9. Business Expenses. The Partnership shall reimburse the Partners for reasonable travel, entertainment and miscellaneous expenses incurred by them in the conduct of the Partnerships business in accordance with rules and regulations established by the General Partner from time to time.
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Section 5.10. Tax Capital Accounts; Tax Allocations
(a) For U.S. federal income tax purposes, there shall be established for each Partner a single capital account combining such Partners Capital Commitment Capital Account and GP-Related Capital Account, with such adjustments as the General Partner determines are appropriate so that such single capital account is maintained in compliance with the principles and requirements of Section 704(b) of the Code and the Treasury Regulations thereunder.
(b) All items of income, gain, loss, deduction and credit of the Partnership shall be allocated among the Partners for U.S. federal, state and local income tax purposes in the same manner as such items of income, gain, loss, deduction and credit shall be allocated among the Partners pursuant to this Agreement, except as may otherwise be provided herein or by the Code or other applicable law. In the event there is a net decrease in partnership minimum gain or partner nonrecourse debt minimum gain (determined in accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any taxable year of the Partnership, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to its respective share of such net decrease during such year, determined pursuant to Treasury Regulations Sections 1.704-2(g) and 1.704-2(i)(5). The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). In addition, this Agreement shall be considered to contain a qualified income offset as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Notwithstanding the foregoing, the General Partner in its sole discretion shall make allocations for tax purposes as may be needed to ensure that allocations are in accordance with the interests of the Partners within the meaning of the Code and the Treasury Regulations.
(c) For U.S. federal, state and local income tax purposes only, Partnership income, gain, loss, deduction or expense (or any item thereof) for each Fiscal Year shall be allocated to and among the Partners in a manner corresponding to the manner in which corresponding items are allocated among the Partners pursuant to the other provisions of this Section 5.10; provided, that the General Partner may in its sole discretion make such allocations for tax purposes as it determines are appropriate so that allocations have substantial economic effect or are in accordance with the interests of the Partners, within the meaning of the Code and the Treasury Regulations thereunder. To the extent there is an adjustment by a taxing authority to any item of income, gain, loss, deduction or credit of the Partnership (or an adjustment to any Partners distributive share thereof), the General Partner may reallocate the adjusted items among each Partner or former Partner (as determined by the General Partner) in accordance with the final resolution of such audit adjustment.
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ARTICLE VI
ADDITIONAL PARTNERS; WITHDRAWAL OF PARTNERS;
SATISFACTION AND DISCHARGE OF
PARTNERSHIP INTERESTS; TERMINATION
Section 6.1. Additional Partners.
(a) Effective on the first day of any month (or on such other date as shall be determined by the General Partner in its sole discretion), the General Partner shall have the right to admit one or more additional or substitute persons into the Partnership as Limited Partners or Special Partners. Each such person shall make the representations and certifications with respect to itself set forth in Section 3.6 and Section 3.7. The General Partner shall determine and negotiate with the additional Partner (which term shall include, without limitation, any substitute Partner) all terms of such additional Partners participation in the Partnership, including the additional Partners initial GP-Related Capital Contribution, Capital Commitment-Related Capital Contribution, GP-Related Profit Sharing Percentage and Capital Commitment Profit Sharing Percentage. Each additional Partner shall have such voting rights as may be determined by the General Partner from time to time unless, upon the admission to the Partnership of any Special Partner, the General Partner shall designate that such Special Partner shall not have such voting rights (any such Special Partner being called a Nonvoting Special Partner). Any additional Partner shall, as a condition to becoming a Partner, agree to become a party to, and be bound by the terms and conditions of, the Trust Agreement. If Blackstone or another or subsequent holder of an Investor Note approved by the General Partner for purposes of this Section 6.1(a) shall foreclose upon a Limited Partners Investor Note issued to finance such Limited Partners purchase of his or her Capital Commitment Interests, Blackstone or such other or subsequent holder shall succeed to such Limited Partners Capital Commitment Interests and shall be deemed to have become a Limited Partner to such extent. Any additional Partner may have a GP-Related Partner Interest or a Capital Commitment Partner Interest, without having the other such interest.
(b) The GP-Related Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners GP-Related Profit Sharing Percentages as of such date, shall be established by the General Partner pursuant to Section 5.3. The Capital Commitment Profit Sharing Percentages, if any, to be allocated to an additional Partner as of the date such Partner is admitted to the Partnership, together with the pro rata reduction in all other Partners Capital Commitment Profit Sharing Percentages as of such date, shall be established by the General Partner. Notwithstanding any provision in this Agreement to the contrary, the General Partner is authorized, without the need for any further act, vote or consent of any person, to make adjustments to the GP-Related Profit Sharing Percentages as it determines necessary in its sole discretion in connection with any additional Partners admitted to the Partnership, adjustments with respect to other Partners of the Partnership and to give effect to other matters set forth herein, as applicable.
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(c) An additional Partner shall be required to contribute to the Partnership his or her pro rata share of the Partnerships total capital, excluding capital in respect of GP-Related Investments and Capital Commitment Investments in which such Partner does not acquire any interests, at such times and in such amounts as shall be determined by the General Partner in accordance with Section 4.1 and Section 7.1.
(d) The admission of an additional Partner will be evidenced by (i) the execution of a counterpart copy of this Agreement by such additional Partner, or (ii) the execution of an amendment to this Agreement by the General Partner and the additional Partner, if determined by the General Partner, and/or (iii) the execution by such additional Partner of any other writing evidencing the intent of such person to become an additional Partner and to be bound by the terms of this Agreement and such writing being acceptable to the General Partner on behalf of the Partnership. In addition, each additional Partner shall sign a counterpart copy of the Trust Agreement or any other writing evidencing the intent of such person to become a party to the Trust Agreement that is acceptable to the General Partner on behalf of the Partnership.
Section 6.2. Withdrawal of Partners.
(a) Any Partner may Withdraw voluntarily from the Partnership subject to the prior written consent of the General Partner, including if such Withdrawal would (i) cause the Partnership to be in default under any of its contractual obligations or (ii) in the reasonable judgment of the General Partner, have a material adverse effect on the Partnership or its business. Without limiting the foregoing sentence, the General Partner generally intends to permit voluntary Withdrawals on the last day of any calendar month (or on such other date as shall be determined by the General Partner in its sole discretion), on not less than 15 days prior written notice by such Partner to the General Partner (or on such shorter notice period as may be mutually agreed upon between such Partner and the General Partner); provided, that a Partner may Withdraw from the Partnership with respect to such Partners GP-Related Partner Interest without Withdrawing from the Partnership with respect to such Partners Capital Commitment Partner Interest, and a Partner may Withdraw from the Partnership with respect to such Partners Capital Commitment Partner Interest without Withdrawing from the Partnership with respect to such Partners GP-Related Partner Interest.
(b) Upon the Withdrawal of any Partner, including by the occurrence of any withdrawal event under the Partnership Act with respect to any Partner, such Partner shall thereupon cease to be a Partner, except as expressly provided herein.
(c) Upon the Total Disability of a Limited Partner, such Partner shall thereupon cease to be a Limited Partner with respect to such persons GP-Related Partner Interest; provided, that the General Partner may elect to admit such Withdrawn Partner to the Partnership as a Nonvoting Special Partner with respect to such persons GP-Related Partner Interest, with such GP-Related Partner Interest as the General Partner may determine. The determination of whether any Partner has suffered a Total Disability shall be made by the General Partner in its sole discretion after consultation with a qualified medical doctor. In the absence of agreement between the General Partner and such Partner, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Total Disability.
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(d) If the General Partner determines that it shall be in the best interests of the Partnership for any Partner (including any Partner who has given notice of voluntary Withdrawal pursuant to paragraph (a) above) to Withdraw from the Partnership (whether or not Cause exists) with respect to such persons GP-Related Partner Interest and/or with respect to such persons Capital Commitment Partner Interest, such Partner, upon written notice by the General Partner to such Partner, shall be required to Withdraw with respect to such persons GP-Related Partner Interest and/or with respect to such persons Capital Commitment Partner Interest, as of a date specified in such notice, which date shall be on or after the date of such notice. If the General Partner requires any Partner to Withdraw for Cause with respect to such persons GP-Related Partner Interest and/or with respect to such persons Capital Commitment Partner Interest, such notice shall state that it has been given for Cause and shall describe the particulars thereof in reasonable detail.
(e) The Withdrawal from the Partnership of any Partner shall not, in and of itself, affect the obligations of the other Partners to continue the Partnership during the remainder of its term. A Withdrawn General Partner shall remain liable for all obligations of the Partnership incurred while it was a General Partner and resulting from its acts or omissions as a General Partner to the fullest extent provided by law.
Section 6.3. GP-Related Partner Interests Not Transferable.
(a) No Partner may sell, assign, pledge, grant a security interest over or otherwise transfer or encumber all or any portion of such Partners GP-Related Partner Interest other than as permitted by written agreement between such Partner and the Partnership; provided, that this Section 6.3 shall not impair transfers by operation of law, transfers by will or by other testamentary instrument occurring by virtue of the death or dissolution of a Partner, or transfers required by trust agreements; provided further, that, subject to the prior written consent of the General Partner, which shall not be unreasonably withheld, a Limited Partner may transfer, for estate planning purposes, up to 25% of his or her GP-Related Profit Sharing Percentage to any estate planning trust, limited partnership or limited liability company with respect to which a Limited Partner controls investments related to any interest in the Partnership held therein (an Estate Planning Vehicle). Each Estate Planning Vehicle will be a Nonvoting Special Partner. Such Limited Partner and the Nonvoting Special Partner shall be jointly and severally liable for all obligations of both such Limited Partner and such Nonvoting Special Partner with respect to the Partnership (including the obligation to make additional GP-Related Capital Contributions), as the case may be. The General Partner may at its sole option exercisable at any time require any Estate Planning Vehicle to Withdraw from the Partnership on the terms of this Article VI. Except as provided in the second proviso to the first sentence of this Section 6.3, no assignee, legatee, distributee, heir or transferee (by conveyance, operation of law or otherwise) of the whole or any portion of any Partners GP-Related Partner Interest shall have any right to be a Partner without the prior written consent of the General Partner (which consent may be given or withheld in its sole discretion without giving any reason therefor). Notwithstanding the granting of a security interest in the entire Interest of any Partner, such Partner shall continue to be a Partner of the Partnership.
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(b) Notwithstanding any provision hereof to the contrary, no sale or transfer of any GP-Related Partner Interest in the Partnership may be made except in compliance with all federal, state and other applicable laws, including U.S. federal and state securities laws.
Section 6.4. Consequences upon Withdrawal of a Partner. (a) Subject to the Partnership Act, the General Partner may not transfer or assign its interest as a General Partner in the Partnership or its right to manage the affairs of the Partnership, except that the General Partner may, subject to the Partnership Act, with the prior written approval of a Majority in Interest of the Partners, admit another person as an additional or substitute General Partner who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise); provided however, that the General Partner may, in its sole discretion, transfer all or part of its interest in the Partnership to a person who makes such representations with respect to itself as the General Partner deems necessary or appropriate (with regard to compliance with applicable law or otherwise) and who owns, directly or indirectly, the principal part of the business then conducted by the General Partner in connection with any liquidation, dissolution or reorganization of the General Partner, and, upon the assumption by such person of liability for all the obligations of the General Partner under this Agreement, such person shall be admitted as the General Partner. A person who is so admitted as an additional or substitute General Partner shall thereby become a General Partner and shall have the right to manage the affairs of the Partnership and to vote as a Partner to the extent of the interest in the Partnership so acquired. The General Partner shall not cease to be the general partner of the Partnership upon the collateral assignment of or the pledging or granting of a security interest in its entire Interest in the Partnership.
(b) Except as contemplated by Section 6.4(a) above, Withdrawal by a General Partner is not permitted. The Withdrawal of a Partner shall not dissolve the Partnership if at the time of such Withdrawal there are one or more remaining Partners and any one or more of such remaining Partners continue the business of the Partnership (any and all such remaining Partners being hereby authorized to continue the business of the Partnership without dissolution and hereby agreeing to do so). Notwithstanding Section 6.4(c), if upon the Withdrawal of a Partner there shall be no remaining Limited Partners, the Partnership shall be dissolved and shall be wound up unless, within 90 days after the occurrence of such Withdrawal, all remaining Special Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of the date of such Withdrawal, of one or more Limited Partners.
(c) The Partnership shall not be dissolved, in and of itself, by the Withdrawal of any Partner, but shall continue with the surviving or remaining Partners as partners thereof in accordance with and subject to the terms and provisions of this Agreement.
Section 6.5. Satisfaction and Discharge of a Withdrawn Partners GP-Related Partner Interests.
(a) The terms of this Section 6.5 shall apply to the GP-Related Partner Interest of a Withdrawn Partner, but, except as otherwise expressly provided in this Section 6.5, shall not apply to the Capital Commitment Partner Interest of a Withdrawn Partner. For purposes of this Section 6.5, the term Settlement Date means the date as of which a Withdrawn Partners GP-Related Partner Interest in the Partnership is settled as determined under paragraph (b) below.
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Notwithstanding the foregoing, any Limited Partner who Withdraws from the Partnership, and all or any portion of whose GP-Related Partner Interest is retained as a Special Partner, shall be considered a Withdrawn Partner for all purposes hereof.
(b) Except where a later date for the settlement of a Withdrawn Partners GP-Related Partner Interest in the Partnership may be agreed to by the General Partner and a Withdrawn Partner, a Withdrawn Partners Settlement Date shall be his or her Withdrawal Date; provided, that if a Withdrawn Partners Withdrawal Date is not the last day of a month, then the General Partner may elect for such Withdrawn Partners Settlement Date to be the last day of the month in which his or her Withdrawal Date occurs. During the interval, if any, between a Withdrawn Partners Withdrawal Date and Settlement Date, such Withdrawn Partner shall have the same rights and obligations with respect to GP-Related Capital Contributions, interest on capital, allocations of GP-Related Net Income (Loss) and distributions as would have applied had such Withdrawn Partner remained a Partner of the Partnership during such period.
(c) In the event of the Withdrawal of a Partner, with respect to such Withdrawn Partners GP-Related Partner Interest, the General Partner shall promptly after such Withdrawn Partners Settlement Date (i) determine and allocate to the Withdrawn Partners GP-Related Capital Accounts such Withdrawn Partners allocable share of the GP-Related Net Income (Loss) of the Partnership for the period ending on such Settlement Date in accordance with Article V and (ii) credit the Withdrawn Partners GP-Related Capital Accounts with interest in accordance with Section 5.2. In making the foregoing calculations, the General Partner shall be entitled to establish such reserves (including reserves for taxes, bad debts, unrealized losses, actual or threatened litigation or any other expenses, contingencies or obligations) as it deems appropriate. Unless otherwise determined by the General Partner in a particular case, a Withdrawn Partner shall not be entitled to receive any GP-Related Unallocated Percentage in respect of the accounting period during which such Partner Withdraws from the Partnership (whether or not previously awarded or allocated) or any GP-Related Unallocated Percentage in respect of prior accounting periods that have not been paid or allocated (whether or not previously awarded) as of such Withdrawn Partners Withdrawal Date.
(d) From and after the Settlement Date of the Withdrawn Partner, the Withdrawn Partners GP-Related Profit Sharing Percentages shall, unless otherwise allocated by the General Partner pursuant to Section 5.3(a), be deemed to be GP-Related Unallocated Percentages (except for GP-Related Profit Sharing Percentages with respect to GP-Related Investments as provided in paragraph (f) below).
(e) (i) Upon the Withdrawal from the Partnership of a Partner with respect to such Partners GP-Related Partner Interest, such Withdrawn Partner thereafter shall not, except as expressly provided in this Section 6.5, have any rights of a Partner (including voting rights) with respect to such Partners GP-Related Partner Interest, and, except as expressly provided in this Section 6.5, such Withdrawn Partner shall not have any interest in the Partnerships GP-Related Net Income (Loss), or in distributions related to such Partners GP-Related Partner Interest, GP-Related Investments or other assets related to such Partners GP-Related Partner Interest. If a Partner Withdraws from the Partnership with respect to such Partners GP-Related Partner Interest for any reason other than for Cause pursuant to Section 6.2, then the Withdrawn Partner shall be entitled to receive, at the time or times specified in Section 6.5(i) below, in
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satisfaction and discharge in full of the Withdrawn Partners GP-Related Partner Interest in the Partnership, (x) payment equal to the aggregate credit balance, if any, as of the Settlement Date of the Withdrawn Partners GP-Related Capital Accounts, (excluding any GP-Related Capital Account or portion thereof attributable to any GP-Related Investment) and (y) the Withdrawn Partners percentage interest attributable to each GP-Related Investment in which the Withdrawn Partner has an interest as of the Settlement Date as provided in paragraph (f) below (which shall be settled in accordance with paragraph (f) below), subject to all the terms and conditions of paragraphs (a)-(r) of this Section 6.5. If the amount determined pursuant to clause (x) above is an aggregate negative balance, the Withdrawn Partner shall pay the amount thereof to the Partnership upon demand by the General Partner on or after the date of the statement referred to in Section 6.5(i) below; provided, that if the Withdrawn Partner was solely a Special Partner on his or her Withdrawal Date, such payment shall be required only to the extent of any amounts payable to such Withdrawn Partner pursuant to this Section 6.5. Any aggregate negative balance in the GP-Related Capital Accounts of a Withdrawn Partner who was solely a Special Partner, upon the settlement of such Withdrawn Partners GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, shall be allocated among the other Partners GP-Related Capital Accounts in accordance with their respective GP-Related Profit Sharing Percentages in the categories of GP-Related Net Income (Loss) giving rise to such negative balance as determined by the General Partner as of such Withdrawn Partners Settlement Date. In the settlement of any Withdrawn Partners GP-Related Partner Interest in the Partnership, no value shall be ascribed to goodwill, the Partnership name or the anticipation of any value the Partnership or any successor thereto might have in the event the Partnership or any interest therein were to be sold in whole or in part.
(ii) Notwithstanding clause (i) of this Section 6.5(e), in the case of a Partner whose Withdrawal with respect to such Partners GP-Related Partner Interest resulted from such Partners death or Incompetence, such Partners estate or legal representative, as the case may be, may elect, at the time described below, to receive a Nonvoting Special Partner GP-Related Partner Interest and retain such Partners GP-Related Profit Sharing Percentage in all (but not less than all) illiquid investments of the Partnership in lieu of a cash payment (or Investor Note) in settlement of that portion of the Withdrawn Partners GP-Related Partner Interest. The election referred to above shall be made within 60 days after the Withdrawn Partners Settlement Date, based on a statement of the settlement of such Withdrawn Partners GP-Related Partner Interest in the Partnership pursuant to this Section 6.5.
(f) For purposes of clause (y) of paragraph (e)(i) above, a Withdrawn Partners percentage interest means his or her GP-Related Profit Sharing Percentage as of the Settlement Date in the relevant GP-Related Investment. The Withdrawn Partner shall retain his or her percentage interest in such GP-Related Investment and shall retain his or her GP-Related Capital Account or portion thereof attributable to such GP-Related Investment, in which case such Withdrawn Partner (a Retaining Withdrawn Partner) shall become and remain a Special Partner for such purpose (and, if the General Partner so designates, such Special Partner shall be a Nonvoting Special Partner). The GP-Related Partner Interest of a Retaining Withdrawn Partner pursuant to this paragraph (f) shall be subject to the terms and conditions applicable to GP-Related Partner Interests of any kind hereunder and such other terms and conditions as are established by the General Partner. At the option of the General Partner in its sole discretion, the
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General Partner and the Retaining Withdrawn Partner may agree to have the Partnership acquire such GP-Related Partner Interest without the approval of the other Partners; provided, that the General Partner shall reflect in the books and records of the Partnership the terms of any acquisition pursuant to this sentence.
(g) The General Partner may elect, in lieu of payment in cash of any amount payable to a Withdrawn Partner pursuant to paragraph (e) above, to (i) have the Partnership issue to the Withdrawn Partner a subordinated promissory note and/or to (ii) distribute in kind to the Withdrawn Partner such Withdrawn Partners pro rata share (as determined by the General Partner) of any securities or other investments of the Partnership in relation to such Partners GP-Related Partner Interest. If any securities or other investments are distributed in kind to a Withdrawn Partner under this paragraph (g), the amount described in clause (x) of paragraph (e)(i) shall be reduced by the value of such distribution as valued on the latest balance sheet of the Partnership in accordance with generally accepted accounting principles or, if not appearing on such balance sheet, as reasonably determined by the General Partner.
(h) [Intentionally omitted.]
(i) Within 120 days after each Settlement Date, the General Partner shall submit to the Withdrawn Partner a statement of the settlement of such Withdrawn Partners GP-Related Partner Interest in the Partnership pursuant to this Section 6.5 together with any cash payment, subordinated promissory note and in kind distributions to be made to such Partner as shall be determined by the General Partner. The General Partner shall submit to the Withdrawn Partner supplemental statements with respect to additional amounts payable to or by the Withdrawn Partner in respect of the settlement of his or her GP-Related Partner Interest in the Partnership (e.g., payments in respect of GP-Related Investments pursuant to paragraph (f) above or adjustments to reserves pursuant to paragraph (j) below) promptly after such amounts are determined by the General Partner. To the fullest extent permitted by law, such statements and the valuations on which they are based shall be accepted by the Withdrawn Partner without examination of the accounting books and records of the Partnership or other inquiry. Any amounts payable by the Partnership to a Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment or provision for payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to the applicable date of payment or distribution; provided, that such Withdrawn Partner shall otherwise rank pari passu in right of payment (x) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year before the Withdrawal Date of the Withdrawn Partner in question and (y) with all persons who become Withdrawn Partners and whose Withdrawal Date is within one year after the Withdrawal Date of the Withdrawn Partner in question.
(j) If the aggregate reserves established by the General Partner as of the Settlement Date in making the foregoing calculations should prove, in the determination of the General Partner, to be excessive or inadequate, the General Partner may elect, but shall not be obligated, to pay the Withdrawn Partner or his or her estate such excess, or to charge the Withdrawn Partner or his or her estate such deficiency, as the case may be.
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(k) Any amounts owed by the Withdrawn Partner to the Partnership at any time on or after the Settlement Date (e.g., outstanding Partnership loans or advances to such Withdrawn Partner) shall be offset against any amounts payable or distributable by the Partnership to the Withdrawn Partner at any time on or after the Settlement Date or shall be paid by the Withdrawn Partner to the Partnership, in each case as determined by the General Partner. All cash amounts payable by a Withdrawn Partner to the Partnership under this Section 6.5 shall bear interest from the due date to the date of payment at a floating rate equal to the lesser of (x) the Prime Rate or (y) the maximum rate of interest permitted by applicable law. The due date of amounts payable by a Withdrawn Partner pursuant to Section 6.5(i) above shall be 120 days after a Withdrawn Partners Settlement Date. The due date of amounts payable to or by a Withdrawn Partner in respect of GP-Related Investments for which the Withdrawn Partner has retained a percentage interest in accordance with paragraph (f) above shall be 120 days after realization with respect to such GP-Related Investment. The due date of any other amounts payable by a Withdrawn Partner shall be 60 days after the date such amounts are determined to be payable.
(l) At the time of the settlement of any Withdrawn Partners GP-Related Partner Interest in the Partnership pursuant to this Section 6.5, the General Partner may, to the fullest extent permitted by applicable law, impose any restrictions it deems appropriate on the assignment, pledge, grant of a security interest, encumbrance or other transfer by such Withdrawn Partner of any interest in any GP-Related Investment retained by such Withdrawn Partner, any securities or other investments distributed in kind to such Withdrawn Partner or such Withdrawn Partners right to any payment from the Partnership.
(m) If a Partner is required to Withdraw from the Partnership with respect to such Partners GP-Related Partner Interest for Cause pursuant to Section 6.2(d), then his or her GP-Related Partner Interest shall be settled in accordance with paragraphs (a)-(r) of this Section 6.5; provided, that the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) In settling the Withdrawn Partners interest in any GP-Related Investment in which he or she has an interest as of his or her Settlement Date, the General Partner may elect to (A) determine the GP-Related Unrealized Net Income (Loss) attributable to each such GP-Related Investment as of the Settlement Date and allocate to the appropriate GP-Related Capital Account of the Withdrawn Partner his or her allocable share of such GP-Related Unrealized Net Income (Loss) for purposes of calculating the aggregate balance of such Withdrawn Partners GP-Related Capital Account pursuant to clause (x) of paragraph (e)(i) above, (B) credit or debit, as applicable, the Withdrawn Partner with the balance of his or her GP-Related Capital Account or portion thereof attributable to each such GP-Related Investment as of his or her Settlement Date without giving effect to the GP-Related Unrealized Net Income (Loss) from such GP-Related Investment as of his or her Settlement Date, which shall be forfeited by the Withdrawn Partner or (C) apply the provisions of paragraph (f) above; provided, that the maximum amount of GP-Related Net Income (Loss) allocable to such Withdrawn Partner with respect to any GP-Related Investment shall equal such Partners percentage interest of the GP-Related Unrealized Net Income, if any, attributable to such GP-Related Investment as of the Settlement Date (the balance of such GP-Related Net Income (Loss), if any, shall be allocated as determined by the General Partner). The Withdrawn Partner shall not have any continuing interest in any GP-Related Investment to the extent an election is made pursuant to (A) or (B) above.
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(ii) Any amounts payable by the Partnership to the Withdrawn Partner pursuant to this Section 6.5 shall be subordinate in right of payment and subject to the prior payment in full of claims of all present or future creditors of the Partnership or any successor thereto arising out of matters occurring prior to or on or after the applicable date of payment or distribution.
(n) The payments to a Withdrawn Partner pursuant to this Section 6.5 may be conditioned on the compliance by such Withdrawn Partner with any lawful and reasonable (under the circumstances) restrictions against engaging or investing in a business competitive with that of the Partnership or any of its subsidiaries and Affiliates for a period not exceeding two years determined by the General Partner. Upon written notice to the General Partner, any Withdrawn Partner who is subject to noncompetition restrictions established by the General Partner pursuant to this paragraph (n) may elect to forfeit the principal amount payable in the final installment of his or her subordinated promissory note, together with interest to be accrued on such installment after the date of forfeiture, in lieu of being bound by such restrictions.
(o) In addition to the foregoing, the General Partner shall have the right to pay a Withdrawn Partner (other than the General Partner) a discretionary additional payment in an amount and based upon such circumstances and conditions as it determines to be relevant.
(p) The provisions of this Section 6.5 shall apply to any Investor Special Partner relating to a Limited Partner or Special Partner and to any transferee of any GP-Related Partner Interest of such Partner pursuant to Section 6.3 if such Partner Withdraws from the Partnership.
(q) (i) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partners GP-Related Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(ii) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnerships day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(r) Each Partner (other than the General Partner) hereby irrevocably appoints the General Partner as such Partners true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partners name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents
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and certificates which the General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 6.5, including, without limitation, the performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 6.6. Dissolution of the Partnership. The General Partner may dissolve the Partnership prior to the expiration of its term at any time on not less than 60 days notice of the dissolution date given to the other Partners. Upon the dissolution of the Partnership, the Partners respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in Section 6.5.
Section 6.7. Certain Tax Matters. (a) The General Partner shall determine all matters concerning allocations for tax purposes not expressly provided for herein in its sole discretion.
(b) The General Partner shall cause to be prepared all federal, state and local tax returns of the Partnership for each year for which such returns are required to be filed and, after approval of such returns by the General Partner, shall cause such returns to be timely filed. The General Partner shall determine the appropriate treatment of each item of income, gain, loss, deduction and credit of the Partnership and the accounting methods and conventions under the tax laws of the United States, the several States and other relevant jurisdictions as to the treatment of any such item or any other method or procedure related to the preparation of such tax returns. The General Partner may cause the Partnership to make or refrain from making any and all elections permitted by such tax laws. Each Partner agrees that he or she shall not, unless he or she provides prior notice of such action to the Partnership, (i) treat, on his or her individual income tax returns, any item of income, gain, loss, deduction or credit relating to his or her interest in the Partnership in a manner inconsistent with the treatment of such item by the Partnership as reflected on the Form K-1 or other information statement furnished by the Partnership to such Partner for use in preparing his or her income tax returns or (ii) file any claim for refund relating to any such item based on, or which would result in, such inconsistent treatment. In respect of an income tax audit of any tax return of the Partnership, the filing of any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership, or any administrative or judicial proceedings arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, (A) the Tax Matters Partner (as defined below) shall be authorized to act for, and his or her decision shall be final and binding upon, the Partnership and all Partners except to the extent a Partner shall properly elect to be excluded from such proceeding pursuant to the Code, (B) all expenses incurred by the Tax Matters Partner in connection therewith (including, without limitation, attorneys, accountants and other experts fees and disbursements) shall be expenses of the Partnership and (C) no Partner shall have the right to (1) participate in the audit of any Partnership tax return, (2) file any amended return or claim for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax return of the Partnership (unless he or she provides prior notice of such action to the Partnership as provided above), (3) participate in any administrative or judicial proceedings conducted by the
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Partnership or the Tax Matters Partner arising out of or in connection with any such audit, amended return, claim for refund or denial of such claim, or (4) appeal, challenge or otherwise protest any adverse findings in any such audit conducted by the Partnership or the Tax Matters Partner or with respect to any such amended return or claim for refund filed by the Partnership or the Tax Matters Partner or in any such administrative or judicial proceedings conducted by the Partnership or the Tax Matters Partner. The Partnership and each Partner hereby designate any Partner selected by the General Partner as the partnership representative (as defined under the Code) (the Tax Matters Partner). To the fullest extent permitted by applicable law, each Partner agrees to indemnify and hold harmless the Partnership and all other Partners from and against any and all liabilities, obligations, damages, deficiencies and expenses resulting from any breach or violation by such Partner of the provisions of this Section 6.7 and from all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including reasonable attorneys fees and disbursements, incident to any such breach or violation.
(c) Each individual Partner shall provide to the Partnership copies of each federal, state and local income tax return of such Partner (including any amendment thereof) within 30 days after filing such return.
(d) To the extent the General Partner reasonably determines that the Partnership (or any entity in which the Partnership holds an interest) is or may be required by law to withhold or to make tax payments, including interest and penalties on such amounts, on behalf of or with respect to any Partner, including pursuant to Section 6225 of the Code (Tax Advances), the General Partner may withhold or escrow such amounts or make such tax payments as so required. All Tax Advances made on behalf of a Partner shall, at the option of the General Partner, (i) be promptly paid to the Partnership by the Partner on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds upon dissolution of the Partnership otherwise payable to such Partner. Whenever the General Partner selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Agreement such Partner shall be treated as having received all distributions (whether before or upon dissolution of the Partnership) unreduced by the amount of such Tax Advance. To the fullest extent permitted by law, each Partner hereby agrees to indemnify and hold harmless the Partnership and the other Partners from and against any liability (including, without limitation, any liability for taxes, penalties, additions to tax or interest) with respect to income attributable to or distributions or other payments to such Partner. The obligations of a Partner set forth in this Section 6.7(d) shall survive the Withdrawal of any Partner from the Partnership or any Transfer of a Partners interest.
Section 6.8. Special Basis Adjustments. In connection with any assignment or transfer of a Partnership interest permitted by the terms of this Agreement, the General Partner may cause the Partnership, on behalf of the Partners and at the time and in the manner provided in Treasury Regulations Section 1.754-1(b), to make an election to adjust the basis of the Partnerships property in the manner provided in Sections 734(b) and 743(b) of the Code.
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ARTICLE VII
CAPITAL COMMITMENT INTERESTS; CAPITAL CONTRIBUTIONS;
ALLOCATIONS; DISTRIBUTIONS
Section 7.1. Capital Commitment Interests, etc.
(a) This Article VII and Article VIII hereof set forth certain terms and conditions with respect to the Capital Commitment Partner Interests and the Capital Commitment BREP IX Interest and matters related to the Capital Commitment Partner Interests and the Capital Commitment BREP IX Interest. Except as otherwise expressly provided in this Article VII or in Article VIII, the terms and provisions of this Article VII and Article VIII shall not apply to the GP-Related Partner Interests or the GP-Related BREP IX Interest.
(b) Each Partner, severally, agrees to make contributions of capital to the Partnership (Capital Commitment-Related Capital Contributions) as required to fund the Partnerships capital contributions to BREP IX or Associates IX, in respect of the Capital Commitment BREP IX Interest, if any, and the related Capital Commitment BREP IX Commitment, if any (including, without limitation, funding all or a portion of the Blackstone Capital Commitment). No Partner shall be obligated to make Capital Commitment-Related Capital Contributions to the Partnership in an amount in excess of such Partners Capital Commitment-Related Commitment. The Commitment Agreements and SMD Agreements, if any, of the Partners may include provisions with respect to the foregoing matters. It is understood that a Partner will not necessarily participate in each Capital Commitment Investment (which may include additional amounts invested in an existing Capital Commitment Investment) nor will a Partner necessarily have the same Capital Commitment Profit Sharing Percentage with respect to (i) the Partnerships portion of the Blackstone Capital Commitment or (ii) the making of each Capital Commitment Investment in which such Partner participates; provided, that this in no way limits the terms of any Commitment Agreement or SMD Agreement. In addition, nothing contained herein shall be construed to give any Partner the right to obtain financing with respect to the purchase of any Capital Commitment Interest, and nothing contained herein shall limit or dictate the terms upon which the Partnership and its Affiliates may provide such financing. The acquisition of a Capital Commitment Interest by a Partner shall be evidenced by receipt by the Partnership of funds equal to such Partners Capital Commitment-Related Commitment then due with respect to such Capital Commitment Interest and such appropriate documentation as the General Partner may submit to the Partners from time to time.
(c) The Partnership or one of its Affiliates (in such capacity, the Advancing Party) may in its sole discretion advance to any Partner (including any additional Partner admitted to the Partnership pursuant to Section 6.1 but excluding any Partners that are also executive officers of Blackstone) all or any portion of the Capital Commitment-Related Capital Contributions due to the Partnership from such Partner with respect to any Capital Commitment Investment (Firm Advances). Each such Partner shall pay interest to the Advancing Party on each Firm Advance from the date of such Firm Advance until the repayment thereof by such Partner. Each Firm Advance shall be repayable in full, including accrued interest to the date of such repayment, upon prior written notice by the Advancing Party. The making and repayment of each Firm Advance shall be recorded in the books and records of the Partnership, and such recording shall be conclusive evidence of each such Firm Advance, binding on the Partner and the Advancing Party absent manifest error. Except as provided below, the interest rate
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applicable to a Firm Advance shall equal the cost of funds of the Advancing Party at the time of the making of such Firm Advance. The Advancing Party shall inform any Partner of such rate upon such Partners request; provided, that such interest rate shall not exceed the maximum interest rate allowable by applicable law; provided further, that amounts that are otherwise payable to such Partner pursuant to Section 7.4(a) shall be used to repay such Firm Advance (including interest thereon). The Advancing Party may, in its sole discretion, change the terms of Firm Advances (including the terms contained herein) and/or discontinue the making of Firm Advances; provided, that (i) the Advancing Party shall notify the relevant Partners of any material changes to such terms and (ii) the interest rate applicable to such Firm Advances and overdue amounts thereon shall not exceed the maximum interest rate allowable by applicable law.
Section 7.2. Capital Commitment Capital Accounts
(a) There shall be established for each Partner in the books of the Partnership as of the date of formation of the Partnership, or such later date on which such Partner is admitted to the Partnership, and on each such other date as such Partner first acquires a Capital Commitment Interest in a particular Capital Commitment Investment, a Capital Commitment Capital Account for each Capital Commitment Investment in which such Partner acquires a Capital Commitment Interest on such date. Each Capital Commitment-Related Capital Contribution of a Partner shall be credited to the appropriate Capital Commitment Capital Account of such Partner on the date such Capital Commitment-Related Capital Contribution is paid to the Partnership. Capital Commitment Capital Accounts shall be adjusted to reflect any transfer of a Partners interest in the Partnership related to his or her Capital Commitment Partner Interest as provided in this Agreement.
(b) A Partner shall not have any obligation to the Partnership or to any other Partner to restore any negative balance in the Capital Commitment Capital Account of such Partner. Until distribution of any such Partners interest in the Partnership with respect to a Capital Commitment Interest as a result of the disposition by the Partnership of the related Capital Commitment Investment and in whole upon the dissolution of the Partnership, neither such Partners Capital Commitment Capital Accounts nor any part thereof shall be subject to withdrawal or redemption except with the consent of the General Partner.
Section 7.3. Allocations
(a) Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners (including the General Partner) participating in such Capital Commitment Investment in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment. Capital Commitment Net Income (Loss) on any Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion which such Partners aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; provided, that if any Partner makes the election provided for in Section 7.6, Capital Commitment Net Income (Loss) of the Partnership for each Capital Commitment Investment shall be allocated to the related Capital Commitment Capital Accounts of all the Partners participating in such Capital Commitment Investment who do not make such election in proportion to their respective Capital Commitment Profit Sharing Percentages for such Capital Commitment Investment.
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(b) Any special costs relating to distributions pursuant to Section 7.6 or Section 7.7 shall be specially allocated to the electing Partner.
(c) Notwithstanding the foregoing, the General Partner may make such allocations as it deems reasonably necessary to give economic effect to the provisions of this Agreement, taking into account facts and circumstances as the General Partner deems reasonably necessary for this purpose.
Section 7.4. Distributions.
(a) Each Partners allocable portion of Capital Commitment Net Income received from his or her Capital Commitment Investments, distributions to such Partner that constitute returns of capital, and other Capital Commitment Net Income of the Partnership (including, without limitation, Capital Commitment Net Income attributable to Unallocated Capital Commitment Interests) during a Fiscal Year of the Partnership will be credited to payment of the Investor Notes to the extent required below as of the last day of such Fiscal Year (or on such earlier date as related distributions are made in the sole discretion of the General Partner) with any cash amount distributable to such Partner pursuant to clauses (ii) and (vii) below to be distributed within 45 days after the end of each Fiscal Year of the Partnership (or in each case on such earlier date as selected by the General Partner in its sole discretion) as follows (subject to Section 7.4(c) below):
(i) First, to the payment of interest then due on all Investor Notes (relating to Capital Commitment Investments or otherwise) of such Partner (to the extent Capital Commitment Net Income and distributions or payments from Other Sources do not equal or exceed all interest payments due, the selection of those of such Partners Investor Notes upon which interest is to be paid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor);
(ii) Second, to distribution to the Partner of an amount equal to the U.S. federal, state and local income taxes on income of the Partnership allocated to such Partner for such year in respect of such Partners Capital Commitment Partner Interest (the aggregate amount of any such distribution shall be determined by the General Partner, subject to the limitation that the minimum aggregate amount of such distribution be the tax that would be payable if the taxable income of the Partnership related to all Partners Capital Commitment Partner Interests were all allocated to an individual subject to the then-prevailing maximum rate of U.S. federal, New York State and New York City taxes (including, without limitation, taxes imposed under Section 1411 of the Code), taking into account the character of such taxable income allocated by the Partnership and the limitations on deductibility of expenses and other items for U.S. federal income tax purposes); provided, that additional amounts shall be paid to the Partner pursuant to this clause (ii) to the extent that such amount reduces the amount otherwise distributable to the Partner pursuant to a comparable provision in any other BE Agreement and there are not sufficient amounts to fully satisfy such provision from the relevant partnership or other
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entity; provided further, that amounts paid pursuant to the provisions in such other BE Agreements comparable to the immediately preceding proviso shall reduce those amounts otherwise distributable to the Partner pursuant to provisions in such other BE Agreements that are comparable to this clause (ii);
(iii) Third, to the payment in full of the principal amount of the Investor Note financing (A) any Capital Commitment Investment disposed of during or prior to such Fiscal Year or (B) any BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year, to the extent not repaid from Other Sources;
(iv) Fourth, to the return to such Partner of (A) all Capital Commitment-Related Capital Contributions made in respect of the Capital Commitment Interest to which any Capital Commitment Investment disposed of during or prior to such Fiscal Year relates or (B) all capital contributions made to any Blackstone Entity (other than the Partnership) in respect of interests therein relating to BE Investments (other than Capital Commitment Investments) disposed of during or prior to such Fiscal Year (including all principal paid on the related Investor Notes), to the extent not repaid from amounts of Other Sources (other than amounts of Capital Commitment Partner Carried Interest);
(v) Fifth, to the payment of principal (including any previously deferred amounts) then owing under all other Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partners Investor Notes to be repaid and the division of payments among such Investor Notes to be determined by the Lender or Guarantor;
(vi) Sixth, up to 50% of any Capital Commitment Net Income remaining after application pursuant to clauses (i) through (v) above shall be applied pro rata to prepayment of principal of all remaining Investor Notes of such Partner (including those unrelated to the Partnership), the selection of those of such Partners Investor Notes to be repaid, the division of payments among such Investor Notes and the percentage of remaining Capital Commitment Net Income to be applied thereto to be determined by the Lender or Guarantor; and
(vii) Seventh, to such Partner to the extent of any amount of Capital Commitment Net Income remaining after making the distributions in clauses (i) through (vi) above, and such amount is not otherwise required to be applied to Investor Notes pursuant to the terms thereof.
To the extent there is a partial disposition of a Capital Commitment Investment or any other BE Investment, as applicable, the payments in clauses (iii) and (iv) above shall be based on that portion of the Capital Commitment Investment or other BE Investment, as applicable, disposed of, and the principal amount and related interest payments of such Investor Note shall be adjusted to reflect such partial payment so that there are equal payments over the remaining term of the related Investor Note. For a Partner who is no longer an employee or officer of Holdings or an Affiliate thereof, distributions shall be made pursuant to clauses (i) through (iii) above, and then, unless the Partnership or its Affiliate has exercised its rights pursuant to Section 8.1 hereof, any remaining income or other distribution in respect of such Partners Capital Commitment Partner Interest shall be applied to the prepayment of the outstanding Investor Notes of such Partner, until all such Partners Investor Notes have been repaid in full, with any such income or other distribution remaining thereafter distributed to such Partner.
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Distributions of Capital Commitment Net Income may be made at any other time at the discretion of the General Partner. At the General Partners discretion, any amounts distributed to a Partner in respect of such Partners Capital Commitment Partner Interest will be net of any interest and principal payable on his or her Investor Notes for the full period in respect of which the distribution is made.
(b) [Intentionally omitted.]
(c) To the extent that the foregoing Partnership distributions and distributions and payments from Other Sources are insufficient to satisfy any principal and/or interest due on Investor Notes, and to the extent that the General Partner in its sole discretion elects to apply this paragraph (c) to any individual payments due, such unpaid interest will be added to the remaining principal amount of such Investor Notes and shall be payable on the next scheduled principal payment date (along with any deferred principal and any principal and interest due on such date); provided, that such deferral shall not apply to a Partner that is no longer an employee or officer of Holdings or its Affiliates. All unpaid interest on such Investor Notes shall accrue interest at the interest rate then in effect for such Investor Notes.
(d) [Intentionally omitted.]
(e) The Capital Commitment Capital Account of each Partner shall be reduced by the amount of any distribution to such Partner pursuant to Section 7.4(a).
(f) At any time that a sale, exchange, transfer or other disposition of a portion of a Capital Commitment Investment is being considered by the Partnership or BREP IX (a Capital Commitment Disposable Investment), at the election of the General Partner each Partners Capital Commitment Interest with respect to such Capital Commitment Investment shall be vertically divided into two separate Capital Commitment Interests, a Capital Commitment Interest attributable to the Capital Commitment Disposable Investment (a Partners Capital Commitment Class B Interest), and a Capital Commitment Interest attributable to such Capital Commitment Investment excluding the Capital Commitment Disposable Investment (a Partners Capital Commitment Class A Interest). Distributions (including those resulting from a direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class B Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class B Interests, and distributions (including those resulting from the direct or indirect sale, transfer, exchange or other disposition by the Partnership) relating to a Capital Commitment Investment excluding such Capital Commitment Disposable Investment shall be made only to holders of Capital Commitment Class A Interests with respect to such Capital Commitment Investment in accordance with their respective Capital Commitment Profit Sharing Percentages relating to such Capital Commitment Class A Interests.
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(g) (i) If (x) the Partnership is obligated under the Giveback Provisions to contribute a Giveback Amount to BREP IX in respect of any Capital Commitment BREP IX Interest that may be held by the Partnership or (y) Associates IX is obligated under the Giveback Provisions to contribute to BREP IX a Giveback Amount with respect to any Capital Commitment BREP IX Interest that may be held by Associates IX and the Partnership is obligated to contribute any such amount to Associates IX in respect of the Partnerships Capital Commitment Associates IX Partner Interest (the amount of any such obligation of the Partnership with respect to such a Giveback Amount in the case of either (x) or (y) being herein called a Capital Commitment Giveback Amount), the General Partner shall call for such amounts as are necessary to satisfy such obligation of the Partnership as determined by the General Partner, in which case, each Partner and Withdrawn Partner shall contribute to the Partnership, in cash, when and as called by the General Partner, such an amount of prior distributions by the Partnership with respect to the Capital Commitment BREP IX Interest (the Capital Commitment Recontribution Amount) which equals such Partners pro rata share of prior distributions in connection with (a) the Capital Commitment BREP IX Investment giving rise to the Capital Commitment Giveback Amount, (b) if the amounts contributed pursuant to clause (a) above are insufficient to satisfy such Capital Commitment Giveback Amount, Capital Commitment BREP IX Investments other than the one giving rise to such obligation, and (c) if the Capital Commitment Giveback Amount pursuant to the applicable BREP IX Agreement is unrelated to a specific Capital Commitment BREP IX Investment, all Capital Commitment BREP IX Investments. Each Partner shall promptly contribute to the Partnership upon notice thereof such Partners Capital Commitment Recontribution Amount. Prior to such time, the General Partner may, at the General Partners discretion (but shall be under no obligation to), provide notice that in the General Partners judgment, the potential obligations in respect of the Capital Commitment Giveback Amount will probably materialize (and an estimate of the aggregate amount of such obligations).
(ii) (A) In the event any Partner (a Capital Commitment Defaulting Party) fails to recontribute all or any portion of such Capital Commitment Defaulting Partys Capital Commitment Recontribution Amount for any reason, the General Partner shall require all other Partners and Withdrawn Partners to contribute, on a pro rata basis (based on each of their respective Capital Commitment Profit Sharing Percentages), such amounts as are necessary to fulfill the Capital Commitment Defaulting Partys obligation to pay such Capital Commitment Defaulting Partys Capital Commitment Recontribution Amount (a Capital Commitment Deficiency Contribution) if the General Partner determines in its good faith judgment that the Partnership will be unable to collect such amount in cash from such Capital Commitment Defaulting Party for payment of the Capital Commitment Giveback Amount at least 20 Business Days prior to the latest date that the Partnership is permitted to pay the Capital Commitment Giveback Amount; provided, that no Partner shall as a result of such Capital Commitment Deficiency Contribution be required to contribute an amount in excess of 167% of the amount of the Capital Commitment Recontribution Amount initially requested from such Partner in respect of such default. Thereafter, the General Partner shall determine in its good faith judgment that the Partnership should either (1) not attempt to collect such amount in light of the costs associated therewith, the likelihood of recovery and any other factors considered relevant in the good faith judgment of the General Partner or (2) pursue any and all remedies (at law or equity) available to the Partnership against the Capital
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Commitment Defaulting Party, the cost of which shall be a Partnership expense to the extent not ultimately reimbursed by the Capital Commitment Defaulting Party. It is agreed that the Partnership shall have the right (effective upon such Capital Commitment Defaulting Party becoming a Capital Commitment Defaulting Party) to set-off as appropriate and apply against such Capital Commitment Defaulting Partys Capital Commitment Recontribution Amount any amounts otherwise payable to the Capital Commitment Defaulting Party by the Partnership or any Affiliate thereof. Each Partner hereby grants to the General Partner a security interest, effective upon such Partner becoming a Capital Commitment Defaulting Party, in all accounts receivable and other rights to receive payment from the Partnership or any Affiliate of the Partnership and agrees that, upon the effectiveness of such security interest, the General Partner may sell, collect or otherwise realize upon such collateral. In furtherance of the foregoing, each Partner hereby appoints the General Partner as its true and lawful attorney-in-fact with full irrevocable power and authority, in the name of such Partner or in the name of the Partnership, to take any actions which may be necessary to accomplish the intent of the immediately preceding sentence. The General Partner shall be entitled to collect interest on the Capital Commitment Recontribution Amount of a Capital Commitment Defaulting Party from the date such Capital Commitment Recontribution Amount was required to be contributed to the Partnership at a rate equal to the Default Interest Rate.
(B) Any Partners failure to make a Capital Commitment Deficiency Contribution shall cause such Partner to be a Capital Commitment Defaulting Party with respect to such amount.
(iii) A Partners obligation to make contributions to the Partnership under this Section 7.4(g) shall survive the termination of the Partnership.
Section 7.5. Valuations. Capital Commitment Investments shall be valued annually as of the end of each year (and at such other times as deemed appropriate by the General Partner) in accordance with the principles utilized by Associates IX (or any other Affiliate of the Partnership that is a general partner of BREP IX) in valuing investments of BREP IX or, in the case of investments not held by BREP IX, in the good faith judgment of the General Partner, subject in each case to the second proviso of the immediately succeeding sentence. The value of any Capital Commitment Interest as of any date (the Capital Commitment Value) shall be based on the value of the underlying Capital Commitment Investment as set forth above; provided, that the Capital Commitment Value may be determined as of an earlier date if determined appropriate by the General Partner in good faith; provided further, that such value may be adjusted by the General Partner to take into account factors relating solely to the value of a Capital Commitment Interest (as compared to the value of the underlying Capital Commitment Investment), such as restrictions on transferability, the lack of a market for such Capital Commitment Interest and lack of control of the underlying Capital Commitment Investment. To the full extent permitted by applicable law such valuations shall be final and binding on all Partners; provided further, that the immediately preceding proviso shall not apply to any Capital Commitment Interests held by a person who is or was at any time a direct member or partner of a General Partner of the Partnership.
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Section 7.6. Disposition Election
(a) At any time prior to the date of the Partnerships execution of a definitive agreement to dispose of a Capital Commitment Investment, the General Partner may in its sole discretion permit a Partner to retain all or any portion of its pro rata share of such Capital Commitment Investment (as measured by such Partners Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment). If the General Partner so permits, such Partner shall instruct the General Partner in writing prior to such date (i) not to dispose of all or any portion of such Partners pro rata share of such Capital Commitment Investment (the Retained Portion) and (ii) either to (A) distribute such Retained Portion to such Partner on the closing date of such disposition or (B) retain such Retained Portion in the Partnership on behalf of such Partner until such time as such Partner shall instruct the General Partner upon 5 days notice to distribute such Retained Portion to such Partner. Such Partners Capital Commitment Capital Account shall not be adjusted in any way to reflect the retention in the Partnership of such Retained Portion or the Partnerships disposition of other Partners pro rata shares of such Capital Commitment Investment; provided, that such Partners Capital Commitment Capital Account shall be adjusted upon distribution of such Retained Portion to such Partner or upon distribution of proceeds with respect to a subsequent disposition thereof by the Partnership.
(b) No distribution of such Retained Portion shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such distribution.
Section 7.7. Capital Commitment Special Distribution Election
(a) From time to time during the term of this Agreement, the General Partner may in its sole discretion, upon receipt of a written request from a Partner, distribute to such Partner any portion of its pro rata share of a Capital Commitment Investment (as measured by such Partners Capital Commitment Profit Sharing Percentage in such Capital Commitment Investment) (a Capital Commitment Special Distribution). Such Partners Capital Commitment Capital Account shall be adjusted upon distribution of such Capital Commitment Special Distribution.
(b) No Capital Commitment Special Distributions shall occur unless any Investor Notes relating thereto shall have been paid in full prior to or simultaneously with such Capital Commitment Special Distribution.
ARTICLE VIII
WITHDRAWAL, ADMISSION OF NEW PARTNERS
Section 8.1. Partner Withdrawal; Repurchase of Capital Commitment Interests.
(a) Capital Commitment Interests (or a portion thereof) that were financed by Investor Notes will be treated as Non-Contingent for purposes hereof based upon the proportion of (a) the sum of Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to each Capital Commitment Interest and principal payments on the related
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Investor Note to (b) the sum of the Capital Commitment-Related Capital Contributions not financed by an Investor Note with respect to such Capital Commitment Interest, the original principal amount of such Investor Note and all deferred amounts of interest which from time to time comprise part of the principal amount of the Investor Note. A Partner may prepay a portion of any outstanding principal on the Investor Notes; provided, that in the event that a Partner prepays all or any portion of the principal amount of the Investor Notes within nine months prior to the date on which such Partner is no longer an employee or officer of Holdings or its Affiliates, the Partnership (or its designee) shall have the right, in its sole discretion, to purchase the Capital Commitment Interest that became Non-Contingent as a result of such prepayment; provided further, that the purchase price for such Capital Commitment Interest shall be determined in accordance with the determination of the purchase price of a Partners Contingent Capital Commitment Interests as set forth in paragraph (b) below. Prepayments made by a Partner shall apply pro rata against all of such Partners Investor Notes; provided, that such Partner may request that such prepayments be applied only to Investor Notes related to BE Investments that are related to one or more Blackstone Entities specified by such Partner. Except as expressly provided herein, Capital Commitment Interests that were not financed in any respect with Investor Notes shall be treated as Non-Contingent Capital Commitment Interests.
(b) (i) Upon a Partner ceasing to be an officer or employee of the Partnership or any of its Affiliates, other than as a result of such Partner dying or suffering a Total Disability, such Partner and the Partnership or any other person designated by the General Partner shall each have the right (exercisable by the Withdrawn Partner within 30 days and by the Partnership or its designee(s) within 45 days after such Partners ceasing to be such an officer or employee) or any time thereafter, upon 30 days notice, but not the obligation, to require the Partnership (subject to the prior consent of the General Partner, such consent not to be unreasonably withheld or delayed), subject to the Partnership Act, to buy (in the case of exercise of such right by such Withdrawn Partner) or the Withdrawn Partner to sell (in the case of exercise of such right by the Partnership or its designee(s)) all (but not less than all) such Withdrawn Partners Contingent Capital Commitment Interests.
(ii)The purchase price for each such Contingent Capital Commitment Interest shall be an amount equal to (A) the outstanding principal amount of the related Investor Note plus accrued interest thereon to the date of purchase (such portion of the purchase price to be paid in cash) and (B) an additional amount (the Adjustment Amount) equal to (x) all interest paid by the Partner on the portion of the principal amount of such Investor Note(s) relating to the portion of the related Capital Commitment Interest remaining Contingent and to be repurchased, plus (y) all Capital Commitment Net Losses allocated to the Withdrawn Partner on such Contingent portion of such Capital Commitment Interest, minus (z) all Capital Commitment Net Income allocated to the Withdrawn Partner on the Contingent portion of such Capital Commitment Interest; provided, that, if the Withdrawn Partner was terminated from employment or his or her position as an officer for Cause, all amounts referred to in clause (x) or (y) of the Adjustment Amount, in the General Partners sole discretion, may be deemed to equal zero. The Adjustment Amount shall, if positive, be payable by the holders of the purchased Capital Commitment Interests to the Withdrawn Partner from the next Capital Commitment Net Income received by such holders on the Contingent portion of such Withdrawn Partners Capital Commitment Interests at the time such Capital Commitment Net Income is received. If the Adjustment Amount is negative, it shall be payable to the holders of the purchased Capital
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Commitment Interest by the Withdrawn Partner (A) from the next Capital Commitment Net Income on the Non-Contingent portion of the Withdrawn Partners Capital Commitment Interests at the time such Capital Commitment Net Income is received by the Withdrawn Partner, or (B) if the Partnership or its designee(s) elect to purchase such Withdrawn Partners Non-Contingent Capital Commitment Interests, in cash by the Withdrawn Partner at the time of such purchase; provided, that the Partnership and its Affiliates may offset any amounts otherwise owing to a Withdrawn Partner against any Adjustment Amount owed by such Withdrawn Partner. Until so paid, such remaining Adjustment Amount will not itself bear interest. At the time of such purchase of the Withdrawn Partners Contingent Capital Commitment Interests, his or her related Investor Note shall be payable in full.
(iii) Upon such Partner ceasing to be such an officer or employee, all Investor Notes shall become fully recourse to the Withdrawn Partner in his or her individual capacity (whether or not the Withdrawn Partner or the Partnership or its designee(s) exercises the right to require repurchase of the Withdrawn Partners Contingent Capital Commitment Interests).
(iv)If neither the Withdrawn Partner nor the Partnership nor its designee(s) exercises the right to require repurchase of such Contingent Capital Commitment Interests, then the Withdrawn Partner shall retain the Contingent portion of his or her Capital Commitment Interests and the Investor Notes shall remain outstanding, shall become fully recourse to the Withdrawn Partner in his or her individual capacity, shall be payable in accordance with their remaining original maturity schedules and shall be prepayable at any time by the Withdrawn Partner at his or her option, and the Partnership shall apply such prepayments against outstanding Investor Notes on a pro rata basis.
(v)To the extent that another Partner purchases a portion of a Capital Commitment Interest of a Withdrawn Partner, the purchasing Partners Capital Commitment Capital Account and Capital Commitment Profit Sharing Percentage for such Capital Commitment Investment shall be correspondingly increased.
(c) Upon the occurrence of a Final Event with respect to any Partner, such Partner shall thereupon cease to be a Partner with respect to such Partners Capital Commitment Partner Interest. If such a Final Event shall occur, no Successor in Interest to any such Partner shall for any purpose hereof become or be deemed to become a Partner. The sole right, as against the Partnership and the remaining Partners, acquired hereunder by, or resulting hereunder to, a Successor in Interest to any Partner shall be to receive any distributions and allocations with respect to such Partners Capital Commitment Partner Interest pursuant to Article VII and this Article VIII (subject to the right of the Partnership to purchase the Capital Commitment Interests of such former Partner pursuant to Section 8.1(b) or Section 8.1(d)), to the extent, at the time, in the manner and in the amount otherwise payable to such Partner had such a Final Event not occurred, and no other right shall be acquired hereunder by, or shall result hereunder to, a Successor in Interest to such Partner, whether by operation of law or otherwise and the Partnership shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder. Until distribution of any such Partners interest in the Partnership upon the dissolution of the Partnership as provided in Section 9.2, neither his or her Capital Commitment Capital Accounts nor any part thereof shall
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be subject to withdrawal or redemption without the consent of the General Partner. The General Partner shall be entitled to treat any Successor in Interest to such Partner as the only person entitled to receive distributions and allocations hereunder with respect to such Partners Capital Commitment Partner Interest.
(d) If a Partner dies or suffers a Total Disability, all Contingent Capital Commitment Interests of such Partner shall be purchased by the Partnership or its designee (within 30 days of the first date on which the Partnership knows or has reason to know of such Partners death or Total Disability) (and the purchase price for such Contingent Capital Commitment Interests shall be determined in accordance with Section 8.1(b) (except that any Adjustment Amount shall be payable by or to such Partners estate, personal representative or other Successor in Interest, in cash)), and any Investor Notes financing such Contingent Capital Commitment Interests shall thereupon be prepaid as provided in Section 8.1(b). Upon such Partners death or Total Disability, any Investor Note(s) financing such Contingent Capital Commitment Interests shall become fully recourse. In addition, in the case of the death or Total Disability of a Partner, if the estate, personal representative or other Successor in Interest of such Partner, so requests in writing within 180 days after the Partners death or ceasing to be an employee or member (directly or indirectly) of the Partnership or any of its Affiliates by reason of Total Disability (such requests shall not exceed one per calendar year), the Partnership or its designee may but is not obligated to purchase for cash all (but not less than all) Non-Contingent Capital Commitment Interests of such Partner as of the last day of the Partnerships then current Fiscal Year at a price equal to the Capital Commitment Value thereof as of the most recent valuation prior to the date of purchase. Each Partner shall be required to include appropriate provisions in his or her will to reflect such provisions of this Agreement. In addition, the Partnership may, in the sole discretion of the General Partner, upon notice to the estate, personal representative or other Successor in Interest of such Partner, within 30 days of the first date on which the General Partner knows or has reason to know of such Partners death or Total Disability, determine either (i) to distribute Securities or other property to the estate, personal representative or other Successor in Interest, in exchange for such Non-Contingent Capital Commitment Interests as provided in Section 8.1(e) or (ii) to require sale of such Non-Contingent Capital Commitment Interests to the Partnership or its designee as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion) for an amount in cash equal to the Capital Commitment Value thereof.
(e) In lieu of retaining a Withdrawn Partner as a Partner with respect to any Non-Contingent Capital Commitment Interests, the General Partner may, in its sole discretion, by notice to such Withdrawn Partner within 45 days of his or her ceasing to be an employee or officer of the Partnership or any of its Affiliates, or at any time thereafter, upon 30 days written notice, determine (1) to distribute to such Withdrawn Partner the pro rata portion of the Securities or other property underlying such Withdrawn Partners Non-Contingent Capital Commitment Interests, subject to any restrictions on distributions associated with the Securities or other property, in satisfaction of his or her Non-Contingent Capital Commitment Interests in the Partnership or (2) to cause, as of the last day of any Fiscal Year of the Partnership (or earlier period, as determined by the General Partner in its sole discretion), the Partnership or another person designated by the General Partner (who may be itself another Partner or another Affiliate of the Partnership) to purchase all (but not less than all) of such Withdrawn Partners Non-Contingent Capital Commitment Interests for a price equal to the Capital Commitment Value
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thereof (determined in good faith by the General Partner as of the most recent valuation prior to the date of purchase). The General Partner shall condition any distribution or purchase of voting Securities pursuant to paragraph (d) above or this paragraph (e) upon the Withdrawn Partners execution and delivery to the Partnership of an appropriate irrevocable proxy, in favor of the General Partner or its nominee, relating to such Securities.
(f) The Partnership may subsequently transfer any Unallocated Capital Commitment Interest or portion thereof which is purchased by it as described above to any other person approved by the General Partner. In connection with such purchase or transfer or the purchase of a Capital Commitment Interest or portion thereof by the General Partners designee(s), Holdings may loan all or a portion of the purchase price of the transferred or purchased Capital Commitment Interest to the Partnership, the transferee or the designee-purchaser(s), as applicable (excluding any of the foregoing who is an executive officer of The Blackstone Group Inc. or any Affiliate thereof). To the extent that a Withdrawn Partners Capital Commitment Interests (or portions thereof) are repurchased by the Partnership and not transferred to or purchased by another person, all or any portion of such repurchased Capital Commitment Interests may, in the sole discretion of the General Partner, (i) be allocated to each Partner already participating in the Capital Commitment Investment to which the repurchased Capital Commitment Interest relates, (ii) be allocated to each Partner in the Partnership, whether or not already participating in such Capital Commitment Investment, and/or (iii) continue to be held by the Partnership itself as an unallocated Capital Commitment Investment (such Capital Commitment Interests being herein called Unallocated Capital Commitment Interests). To the extent that a Capital Commitment Interest is allocated to Partners as provided in clause (i) and/or (ii) above, any indebtedness incurred by the Partnership to finance such repurchase shall also be allocated to such Partners. All such Capital Commitment Interests allocated to Partners shall be deemed to be Contingent and shall become Non-Contingent as and to the extent that the principal amount of such related indebtedness is repaid. The Partners receiving such allocations shall be responsible for such related indebtedness only on a nonrecourse basis to the extent appropriate as provided in this Agreement, except as otherwise provided in this Section 8.1 and except as such Partners and the General Partner shall otherwise agree; provided, that such indebtedness shall become fully recourse to the extent and at the time provided in this Section 8.1. If the indebtedness financing such repurchased interests is not to be non-recourse or so limited, the Partnership may require an assumption by the Partners of such indebtedness on the terms thereof as a precondition to allocation of the related Capital Commitment Interests to such Partners; provided, that a Partner shall not, except as set forth in his or her Investor Note(s), be obligated to accept any obligation that is personally recourse (except as provided in this Section 8.1), unless his or her prior consent is obtained. So long as the Partnership itself retains the Unallocated Capital Commitment Interests pursuant to clause (iii) above, such Unallocated Capital Commitment Interests shall belong to the Partnership and any indebtedness financing the Unallocated Capital Commitment Interests shall be an obligation of the Partnership to which all income of the Partnership is subject except as otherwise agreed by the lender of such indebtedness. Any Capital Commitment Net Income (Loss) on an Unallocated Capital Commitment Interest shall be allocated to each Partner in the proportion his or her aggregate Capital Commitment Capital Accounts bear to the aggregate Capital Commitment Capital Accounts of all Partners; debt service on such related financing will be an expense of the Partnership allocable to all Partners in such proportions.
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(g) If a Partner is required to Withdraw from the Partnership with respect to such Partners Capital Commitment Partner Interest for Cause, then his or her Capital Commitment Interest shall be settled in accordance with paragraphs (a)-(f) and (j) of this Section 8.1; provided, that if such Partner was not at any time a direct partner of a General Partner of the Partnership, the General Partner may elect (but shall not be required) to apply any or all the following terms and conditions to such settlement:
(i) purchase for cash all of such Withdrawn Partners Non-Contingent Capital Commitment Interests. The purchase price for each such Non-Contingent Capital Commitment Interest shall be the lower of (A) the original cost of such Non-Contingent Capital Commitment Interest or (B) an amount equal to the Capital Commitment Value thereof (determined as of the most recent valuation prior to the date of the purchase of such Non-Contingent Capital Commitment Interest);
(ii) allow the Withdrawn Partner to retain such Non-Contingent Capital Commitment Interests; provided, that the maximum amount of Capital Commitment Net Income allocable to such Withdrawn Partner with respect to any Capital Commitment Investment shall equal the amount of Capital Commitment Net Income that would have been allocated to such Withdrawn Partner if such Capital Commitment Investment had been sold as of the Settlement Date at the then prevailing Capital Commitment Value thereof; or
(iii) in lieu of cash, purchase such Non-Contingent Capital Commitment Interests by providing the Withdrawn Partner with a promissory note in the amount determined in (i) above. Such promissory note shall have a maximum term of ten (10) years with interest at the Federal Funds Rate.
(h) The Partnership will assist a Withdrawn Partner or his or her estate or guardian, as the case may be, in the settlement of the Withdrawn Partners Capital Commitment Partner Interest in the Partnership. Third party costs incurred by the Partnership in providing this assistance will be borne by the Withdrawn Partner or his or her estate.
(i) The General Partner may reasonably determine in good faith to retain outside professionals to provide the assistance to Withdrawn Partners or their estates or guardians, as referred to above. In such instances, the General Partner will obtain the prior approval of a Withdrawn Partner or his or her estate or guardian, as the case may be, prior to engaging such professionals. If the Withdrawn Partner (or his or her estate or guardian) declines to incur such costs, the General Partner will provide such reasonable assistance as and when it can so as not to interfere with the Partnerships day-to-day operating, financial, tax and other related responsibilities to the Partnership and the Partners.
(j) Each Partner hereby irrevocably appoints the General Partner as such Partners true and lawful agent, representative and attorney-in-fact, each acting alone, in such Partners name, place and stead, to make, execute, sign and file, on behalf of such Partner, any and all agreements, instruments, consents, ratifications, documents and certificates which such General Partner deems necessary or advisable in connection with any transaction or matter contemplated by or provided for in this Section 8.1, including, without limitation, the
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performance of any obligation of such Partner or the Partnership or the exercise of any right of such Partner or the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the death, disability or incapacity of such Partner.
Section 8.2. Transfer of Partners Capital Commitment Interest. Except as otherwise agreed by the General Partner, no Partner or former Partner shall have the right to sell, assign, mortgage, pledge, grant a security interest over, or otherwise dispose of or transfer (Transfer) all or part of any such Partners Capital Commitment Partner Interest in the Partnership; provided, that this Section 8.2 shall in no way impair (i) Transfers as permitted in Section 8.1 above, in the case of the purchase of a Withdrawn Partners or Deceased or Totally Disabled Partners Capital Commitment Interests, (ii) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers by a Partner to another Partner of Non-Contingent Capital Commitment Interests, (iii) Transfers with the prior written consent of the General Partner (which consent may be granted or withheld in its sole discretion without giving any reason therefor) and (iv) with the prior written consent of the General Partner, which shall not be unreasonably withheld, Transfers of up to 25% of a Limited Partners Capital Commitment Partner Interest to an Estate Planning Vehicle (it being understood that it shall not be unreasonable for the General Partner to condition any Transfer of an Interest pursuant to this clause (iv) on the satisfaction of certain conditions and/or requirements imposed by the General Partner in connection with any such Transfer, including, for example, a requirement that any transferee of an Interest hold such Interest as a passive, non-voting interest in the Partnership). Each Estate Planning Vehicle shall not have voting rights (any such Partner being called a Nonvoting Partner). Such Partner shall be jointly and severally liable for all obligations of both such Partner and such Nonvoting Partner with respect to the interest transferred (including the obligation to make additional Capital Commitment-Related Capital Contributions). The General Partner may at its sole option exercisable at any time require such Estate Planning Vehicle to Withdraw from the Partnership on the terms of Section 8.1 and Article VI. No person acquiring an interest in the Partnership pursuant to this Section 8.2 shall become a Partner of the Partnership, or acquire such Partners right to participate in the affairs of the Partnership, unless such person shall be admitted as a Partner pursuant to Section 6.1. A Partner shall not cease to be a Partner of the Partnership upon the collateral assignment of, or the pledging or granting of a security interest in, its entire Interest in the Partnership in accordance with the provisions of this Agreement.
Section 8.3. Compliance with Law. Notwithstanding any provision hereof to the contrary, no sale or Transfer of a Capital Commitment Interest in the Partnership may be made except in compliance with all U.S. federal, state and other applicable laws, including U.S. federal and state securities laws.
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ARTICLE IX
DISSOLUTION
Section 9.1. Dissolution. The Partnership shall be dissolved and subsequently terminated:
(a) pursuant to Section 6.6; or
(b) upon the expiration of the term of the Partnership.
Section 9.2. Final Distribution. Upon the dissolution of the Partnership, and following the payment of creditors of the Partnership and the making of provisions for the payment of any contingent, conditional or unmatured claims known to the Partnership as required under the Partnership Act:
(a) The Partners respective interests in the Partnership shall be valued and settled in accordance with the procedures set forth in Section 6.5 which provide for allocations to the GP-Related Capital Accounts of the Partners and distributions in accordance with the GP-Related Capital Account balances of the Partners; and
(b) With respect to each Partners Capital Commitment Partner Interest, an amount shall be paid to such Partner in cash or Securities in an amount equal to such Partners respective Capital Commitment Liquidating Share for each Capital Commitment Investment; provided, that if the remaining assets relating to any Capital Commitment Investment shall not be equal to or exceed the aggregate Capital Commitment Liquidating Shares for such Capital Commitment Investment, to each Partner in proportion to its Capital Commitment Liquidating Share for such Capital Commitment Investment; and the remaining assets of the Partnership related to the Partners Capital Commitment Partner Interests shall be paid to the Partners in cash or Securities in proportion to their respective Capital Commitment Profit Sharing Percentages for each Capital Commitment Investment from which such cash or Securities are derived.
(c) The General Partner shall be the liquidator. In the event that the General Partner is unable to serve as liquidator, a liquidating trustee shall be chosen by the affirmative vote of a Majority in Interest of the Partners voting at a meeting of Partners (excluding Nonvoting Special Partners).
Section 9.3. Amounts Reserved Related to Capital Commitment Partner Interests. (a) If there are any Securities or other property or other investments or securities related to the Partners Capital Commitment Partner Interests which, in the judgment of the liquidator, cannot be sold, or properly distributed in kind in the case of dissolution, without sacrificing a significant portion of the value thereof, the value of a Partners interest in each such Security or other investment or security may be excluded from the amount distributed to the Partners participating in the related Capital Commitment Investment pursuant to Section 9.2(b). Any interest of a Partner, including his or her pro rata interest in any gains, losses or distributions, in Securities or other property or other investments or securities so excluded shall not be paid or distributed until such time as the liquidator shall determine.
(b) If there is any pending transaction, contingent liability or claim by or against the Partnership related to the Partners Capital Commitment Partner Interests as to which the interest or obligation of any Partner therein cannot, in the judgment of the liquidator, be then ascertained, the value thereof or probable loss therefrom may be deducted from the amount distributable to such Partner pursuant to Section 9.2(b). No amount shall be paid or charged to any such Partner on account of any such transaction or claim until its final settlement or such
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earlier time as the liquidator shall determine. The Partnership may meanwhile retain from other sums due such Partner in respect of such Partners Capital Commitment Partner Interest an amount which the liquidator estimates to be sufficient to cover the share of such Partner in any probable loss or liability on account of such transaction or claim.
(c) Upon determination by the liquidator that circumstances no longer require the exclusion of any Securities or other property or retention of sums as provided in paragraphs (a) and (b) of this Section 9.3, the liquidator shall, at the earliest practicable time, distribute as provided in Section 9.2(b) such sums or such Securities or other property or the proceeds realized from the sale of such Securities or other property to each Partner from whom such sums or Securities or other property were withheld.
ARTICLE X
MISCELLANEOUS
Section 10.1. Submission to Jurisdiction; Waiver of Jury Trial. (a) Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision as well as any and all disputes arising out of, relating to or in connection with the termination, liquidation or winding up of the Partnership), whether arising during the existence of the Partnership or at or after its termination or during or after the liquidation or winding up of the Partnership, shall be finally settled by arbitration conducted by a single arbitrator in New York, New York U.S.A., in accordance with the then-existing Rules of Arbitration of the International Chamber of Commerce. If the parties to the dispute fail to agree on the selection of an arbitrator within 30 days of the receipt of the request for arbitration, the International Chamber of Commerce shall make the appointment. The arbitrator shall be a lawyer and shall conduct the proceedings in the English language. Performance under this Agreement shall continue if reasonably possible during any arbitration proceedings. (b) Notwithstanding the provisions of paragraph (a), the General Partner may bring, or may cause the Partnership to bring, on behalf of the General Partner or the Partnership or on behalf of one or more Partners, an action or special proceeding in any court of competent jurisdiction for the purpose of compelling a party to arbitrate, seeking temporary or preliminary relief in aid of an arbitration hereunder, and/or enforcing an arbitration award and, for the purposes of this paragraph (b), each Partner (i) expressly consents to the application of paragraph (c) of this Section 10.1 to any such action or proceeding, (ii) agrees that proof shall not be required that monetary damages for breach of the provisions of this Agreement would be difficult to calculate and that remedies at law would be inadequate, and (iii) irrevocably appoints the General Partner as such Partners agent for service of process in connection with any such action or proceeding and agrees that service of process upon any such agent, who shall promptly advise such Partner of any such service of process, shall be deemed in every respect effective service of process upon the Partner in any such action or proceeding.
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(c) (i) EACH PARTNER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 10.1, OR ANY JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings include any suit, action or proceeding to compel arbitration, to obtain temporary or preliminary judicial relief in aid of arbitration, or to confirm an arbitration award. The parties acknowledge that the forum(s) designated by this paragraph (c) have a reasonable relation to this Agreement, and to the parties relationship with one another.
(ii) The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such ancillary suit, action or proceeding brought in any court referred to in paragraph (c)(i) of this Section 10.1 and such parties agree not to plead or claim the same.
(d) Notwithstanding any provision of this Agreement to the contrary, this Section 10.1 shall be construed to the maximum extent possible to comply with the laws of the State of Delaware, including the Delaware Uniform Arbitration Act (10 Del. C. § 5701 et seq.) (the Delaware Arbitration Act). If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of this Section 10.1, including any rules of the International Chamber of Commerce, shall be invalid or unenforceable under the Delaware Arbitration Act, or other applicable law, such invalidity shall not invalidate all of this Section 10.1. In that case, this Section 10.1 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the Delaware Arbitration Act or other applicable law, and, in the event such term or provision cannot be so limited, this Section 10.1 shall be construed to omit such invalid or unenforceable provision.
Section 10.2. Ownership and Use of the Blackstone Name. The Partnership acknowledges that Blackstone TM L.L.C. (TM), a Delaware limited liability company with a principal place of business at 345 Park Avenue, New York, New York 10154 U.S.A., (or its successors or assigns) is the sole and exclusive owner of the mark and name BLACKSTONE and that the ownership of, and the right to use, sell or otherwise dispose of, the firm name or any abbreviation or modification thereof which consists of or includes BLACKSTONE, shall belong exclusively to TM, which company (or its predecessors, successors or assigns) has licensed the Partnership to use BLACKSTONE in its name. The Partnership acknowledges that TM owns the service mark BLACKSTONE for various services and that the Partnership is using the BLACKSTONE mark and name on a non-exclusive, non-sublicensable and non-assignable basis in connection with its business and authorized activities with the permission of TM. All services rendered by the Partnership under the BLACKSTONE mark and name will be rendered in a manner and with quality levels that are consistent with the high reputation heretofore developed for the BLACKSTONE mark by TM and its Affiliates and licensees. The Partnership understands that TM may terminate its right to use BLACKSTONE at any time in TMs sole discretion by giving the Partnership written notice of termination. Promptly following any such termination, the Partnership will take all steps necessary to change its partnership name to one which does not include BLACKSTONE or any confusingly similar term and cease all use of BLACKSTONE or any term confusingly similar thereto as a service mark or otherwise.
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Section 10.3. Written Consent. Any action required or permitted to be taken by a vote of Partners at a meeting may be taken without a meeting if a Majority in Interest of the Partners consent thereto in writing.
Section 10.4. Letter Agreements; Schedules. The General Partner may, or may cause the Partnership to, enter or has previously entered, into separate letter agreements with individual Partners, officers or employees with respect to GP-Related Profit Sharing Percentages, Capital Commitment Profit Sharing Percentages, benefits or any other matter, which letter agreements have the effect of establishing rights under, or altering or supplementing, the terms of this Agreement with respect to any such Partner and such matters. The parties hereto agree that any rights established, or any terms of this Agreement altered or supplemented, in any such separate letter agreement, including any Commitment Agreement or SMD Agreement, shall govern solely with respect to such Partner notwithstanding any other provision of this Agreement. The General Partner may from time to time execute and deliver to the Partners schedules which set forth the then current capital balances, GP-Related Profit Sharing Percentages and Capital Commitment Profit Sharing Percentages of the Partners and any other matters deemed appropriate by the General Partner. Such schedules shall be for information purposes only and shall not be deemed to be part of this Agreement for any purpose whatsoever; provided, that this in no way limits the effectiveness of any Commitment Agreement or SMD Agreement.
Section 10.5. Governing Law; Separability of Provisions. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law. In particular, the Partnership has been formed pursuant to the Partnership Act, and the rights and liabilities of the Partners shall be as provided therein, except as herein otherwise expressly provided. If any provision of this Agreement shall be held to be invalid, such provision shall be given its meaning to the maximum extent permitted by law and the remainder of this Agreement shall not be affected thereby.
Section 10.6. Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and shall, subject to the penultimate sentence of Section 6.3(a), inure to the benefit of the parties hereto, their respective heirs and personal representatives, and any successor to a trustee of a trust which is or becomes a party hereto; provided, that no person claiming by, through or under a Partner (whether such Partners heir, personal representative or otherwise), as distinct from such Partner itself, shall have any rights as, or in respect to, a Partner (including the right to approve or vote on any matter or to notice thereof) except the right to receive only those distributions expressly payable to such person pursuant to Article VI and Article VIII. Any Partner or Withdrawn Partner shall remain liable for the obligations under this Agreement (including any Net GP-Related Recontribution Amounts and any Capital Commitment Recontribution Amounts) of any transferee of all or any portion of such Partners or Withdrawn Partners interest in the Partnership, unless waived by the General Partner. The Partnership shall, if the General Partner determines in its good faith judgment, based on the standards set forth in Section 5.8(d)(ii)(A) and Section 7.4(g)(ii)(A), to pursue such transferee, pursue payment (including any Net GP-Related Recontribution Amounts and/or Capital Commitment Recontribution Amounts) from the transferee with respect to any such obligations. Nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, on any person other than the Partners and their respective legal
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representatives, heirs, successors and permitted assigns. Notwithstanding the foregoing, solely to the extent required by the BREP IX Agreements, (x) the limited partners in BREP IX shall be third-party beneficiaries of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount or Interim Clawback Amount (for purpose of this sentence, as defined in paragraphs 4.2.9(b) or 9.2.8(b), as applicable, of the BREP IX Partnership Agreement), and (y) the amendment of the provisions of Section 5.8(d)(i)(A) and Section 5.8(d)(ii)(A) (and the definitions relating thereto), solely as they relate to any Clawback Amount or Interim Clawback Amount (for purpose of this sentence, as defined in paragraphs 4.2.9(b) or 9.2.8(b), as applicable, of the BREP IX Partnership Agreement), shall be effective against such limited partners only with a Combined Limited Partner Consent (as such term is defined in the BREP IX Partnership Agreement) unless such amendment does not adversely affect such limited partners rights under paragraph 9.2.8 of the BREP IX Partnership Agreement.
Section 10.7. Confidentiality. (a) By executing this Agreement, each Partner expressly agrees, at all times during the term of the Partnership and thereafter and whether or not at the time a Partner of the Partnership, to maintain the confidentiality of, and not to disclose to any person other than the Partnership, another Partner or a person designated by the Partnership, any information relating to the business, financial structure, financial position or financial results, clients or affairs of the Partnership that shall not be generally known to the public or the securities industry, except as otherwise required by law or by any regulatory or self-regulatory organization having jurisdiction; provided, that any corporate Partner may disclose any such information it is required by law, rule, regulation or custom to disclose. Notwithstanding anything in this Agreement to the contrary, to comply with Treasury Regulations Section 1.6011-4(b)(3)(i), each Partner (and any employee, representative or other agent of such Partner) may disclose to any and all persons, without limitation of any kind, the U.S. federal income tax treatment and tax structure of the Partnership, it being understood and agreed, for this purpose, (1) the name of, or any other identifying information regarding (a) the Partners or any existing or future investor (or any Affiliate thereof) in any of the Partners, or (b) any investment or transaction entered into by the Partners; (2) any performance information relating to any of the Partners or their investments; and (3) any performance or other information relating to previous funds or investments sponsored by any of the Partners, does not constitute such tax treatment or tax structure information.
(b) Nothing in this Agreement shall prohibit or impede any Partner from communicating, cooperating or filing a complaint on possible violations of U.S. federal, state or local law or regulation to or with any governmental agency or regulatory authority (collectively, a Governmental Entity), including, but not limited to, the SEC, FINRA, EEOC or NLRB, or from making other disclosures to any Governmental Entity that are protected under the whistleblower provisions of U.S. federal, state or local law or regulation; provided, that in each case such communications and disclosures are consistent with applicable law. Each Partner understands and acknowledges that (a) an individual shall not be held criminally or civilly liable under any U.S. federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a U.S. federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal, and (b) an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation
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of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Moreover, a Partner shall not be required to give prior notice to (or get prior authorization from) Blackstone regarding any such communication or disclosure. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is any Partner authorized to disclose any information covered by Blackstone or its affiliates attorney-client privilege or attorney work product or Blackstones trade secrets without the prior written consent of Blackstone.
Section 10.8. Notices. Whenever notice is required or permitted by this Agreement to be given, such notice shall be in writing (including telecopy or similar writing) and shall be given by hand delivery (including any courier service) or telecopy to any Partner at its address or telecopy number shown in the Partnerships books and records or, if given to the General Partner, at the address or telecopy number of the Partnership in New York City. Each such notice shall be effective (i) if given by telecopy, upon dispatch and (ii) if given by hand delivery, when delivered to the address of such Partner, the General Partner or the Partnership specified as aforesaid.
Section 10.9. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute a single instrument.
Section 10.10. Power of Attorney. Each Partner hereby irrevocably appoints the General Partner as such Partners true and lawful representative and attorney-in-fact, each acting alone, in such Partners name, place and stead, to make, execute, sign and file all instruments, documents and certificates which, from time to time, may be required to set forth any amendment to this Agreement or may be required by this Agreement or by the laws of the United States of America, the State of Delaware or any other state in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to execute, implement and continue the valid and subsisting existence of the Partnership. Such power of attorney is coupled with an interest and shall survive and continue in full force and effect notwithstanding the subsequent Withdrawal from the Partnership of any Partner for any reason and shall not be affected by the subsequent disability or incapacity of such Partner.
Section 10.11. Partners Will. Each Partner and Withdrawn Partner shall include in his or her will a provision that addresses certain matters in respect of his or her obligations relating to the Partnership that is satisfactory to the General Partner and each such Partner and Withdrawn Partner shall confirm annually to the Partnership, in writing, that such provision remains in his or her current will. Where applicable, any estate planning trust of such Partner or Withdrawn Partner to which a portion of such Partners or Withdrawn Partners Interest is transferred shall include a provision substantially similar to such provision and the trustee of such trust shall confirm annually to the Partnership, in writing, that such provision or its substantial equivalent remains in such trust. In the event any Partner or Withdrawn Partner fails to comply with the provisions of this Section 10.11 after the Partnership has notified such Partner or Withdrawn Partner of his or her failure to so comply and such failure to so comply is not cured within 30 days of such notice, the Partnership may withhold any and all distributions to such Partner until the time at which such party complies with the requirements of this Section 10.11.
80
Section 10.12. Cumulative Remedies. Rights and remedies under this Agreement are cumulative and do not preclude use of other rights and remedies available under applicable law.
Section 10.13. Legal Fees. Except as more specifically provided herein, in the event of a legal dispute (including litigation, arbitration or mediation) between any Partner or Withdrawn Partner and the Partnership, arising in connection with any party seeking to enforce Section 4.1(d) or any other provision of this Agreement relating to the Holdback, the Clawback Amount, the GP-Related Giveback Amount, the Capital Commitment Giveback Amount, the Net GP-Related Recontribution Amount or the Capital Commitment Recontribution Amount, the losing party to such dispute shall promptly reimburse the victorious party for all reasonable legal fees and expenses incurred in connection with such dispute (such determination to be made by the relevant adjudicator). Any amounts due under this Section 10.13 shall be paid within 30 days of the date upon which such amounts are due to be paid and such amounts remaining unpaid after such date shall accrue interest at the Default Interest Rate.
Section 10.14. Entire Agreement; Modifications(a) . This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. Subject to Section 10.4, this Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. Except as provided herein, this Agreement may be amended or modified at any time by the General Partner in its sole discretion, upon notification thereof to the Limited Partners.
81
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year first above written. In the event that it is impracticable to obtain the signature of any one or more of the Partners to this Agreement, this Agreement shall be binding among the other Partners executing the same.
GENERAL PARTNER: | ||||
BREA IX L.L.C. | ||||
By: Blackstone Holdings II L.P., its Managing Member | ||||
By: Blackstone Holdings I/II GP L.L.C., its General Partner | ||||
By: The Blackstone Group Inc., its Sole Member | ||||
By: |
/s/ John G. Finley |
|||
Name: | John G. Finley | |||
Title: | Chief Legal Officer and Secretary | |||
LIMITED PARTNERS AND SPECIAL PARTNERS: | ||||
Limited Partners and Special Partners now admitted pursuant to powers of attorney now and hereafter granted to BREA IX L.L.C. | ||||
BREA IX L.L.C. | ||||
By: Blackstone Holdings II L.P., its Managing Member | ||||
By: Blackstone Holdings I/II GP L.L.C., its General Partner | ||||
By: The Blackstone Group Inc., its Sole Member | ||||
By: |
/s/ John G. Finley |
|||
Name: | John G. Finley | |||
Title: | Chief Legal Officer and Secretary |
[BREA IX (Delaware) L.P. A&R LPA Signature Page]
INITIAL LIMITED PARTNER: |
/s/ Patrick Kassen |
Patrick Kassen, as Initial Limited Partner, to reflect his withdrawal from the Partnership |
[BREA IX (Delaware) L.P. A&R LPA Signature Page]
Exhibit 21.1
List of Subsidiaries
The following are subsidiaries of The Blackstone Group Inc. as of December 31, 2019 and the jurisdictions in which they are organized.
Name |
Jurisdiction of Incorporation or Organization |
|
601 Shared Services L.L.C. | Delaware | |
BCEP GP L.L.C. | Delaware | |
BCEP LR Associates (Cayman) Ltd. | Cayman Islands | |
BCEP LR Associates (Cayman) NQ Ltd. | Cayman Islands | |
BCEP NQ GP L.L.C. | Delaware | |
BCEP Side-by-Side GP L.L.C. | Delaware | |
BCEP Side-by-Side GP NQ L.L.C. | Delaware | |
BCLA L.L.C. | Delaware | |
BCLO Advisors L.L.C. | Delaware | |
BCOM Side-by-Side GP L.L.C. | Delaware | |
BCP Asia Athena ESC (Cayman) Ltd. | Cayman Islands | |
BCP Asia Side-by-Side GP L.L.C. | Delaware | |
BCP Asia Side-by-Side GP NQ L.L.C. | Delaware | |
BCP CC Holdings GP L.L.C. | Delaware | |
BCP IV GP L.L.C. | Delaware | |
BCP IV Side-by-Side GP L.L.C. | Delaware | |
BCP SGP IV GP L.L.C. | Delaware | |
BCP V GP L.L.C. | Delaware | |
BCP V Side-by-Side GP L.L.C. | Delaware | |
BCP V USS Side-by-Side GP L.L.C. | Delaware | |
BCP VI GP L.L.C. | Delaware | |
BCP VI SBS ESC Holdco L.P. | Delaware | |
BCP VI Side-by-Side GP L.L.C. | Delaware | |
BCP VII ESC Mime (Cayman) Ltd. | Cayman Islands | |
BCP VII GP L.L.C. | Delaware | |
BCP VII NQ GP L.L.C. | Delaware | |
BCP VII Side-by-Side GP L.L.C. | Delaware | |
BCP VII Side-by-Side GP NQ L.L.C. | Delaware | |
BCP VI-NQ Side-by-Side GP L.L.C. | Delaware | |
BCP V-NQ (Cayman II) GP L.L.C. | Delaware | |
BCP V-NQ GP L.L.C. | Delaware | |
BCRED Holdings (Cayman) - S L.L.C. | Delaware | |
BCVA L.L.C. | Delaware | |
BCVP Side-by-Side GP L.L.C. | Delaware | |
BEP GP L.L.C. | Delaware | |
BEP II ESC Mime (Cayman) Ltd. | Cayman Islands | |
BEP II GP L.L.C. | Delaware | |
BEP II Side-by-Side GP L.L.C. | Delaware | |
BEP II Side-by-Side GP NQ L.L.C. | Delaware | |
BEP NQ Side-by-Side GP L.L.C. | Delaware | |
BEP Side-by-Side GP L.L.C. | Delaware | |
BFIP (Cayman) Salt VI Ltd. | Cayman Islands |
1
Name |
Jurisdiction of Incorporation or Organization |
|
BFIP (Cayman) Salt VI-ESC Ltd. | Cayman Islands | |
BG(HK)L Holdings L.L.C. | Delaware | |
BIA (Cayman) GP L.L.C. | Delaware | |
BIA (Cayman) GP L.P. | Cayman Islands | |
BIA (Cayman) GP NQ L.L.C. | Delaware | |
BIA (Cayman) GP NQ L.P. | Cayman Islands | |
BIA GP L.L.C. | Delaware | |
BIA GP L.P. | Delaware | |
BIA GP NQ L.L.C. | Delaware | |
BIA GP NQ L.P. | Delaware | |
BISA Co-Invest Associates L.L.C. | Delaware | |
Bison RC Option Associates LLC |
Delaware |
|
Blackstone (China) Equity Investment Management Company Limited |
China |
|
Blackstone (FM) Real Estate LLP |
United Kingdom |
|
Blackstone (FM) Real Estate Supervisory GP LLP |
United Kingdom |
|
Blackstone (Shanghai) Equity Investment Management Company Limited |
China |
|
Blackstone / GSO CLO Management LLC |
Delaware |
|
Blackstone / GSO Debt Funds Europe Limited |
Jersey |
|
Blackstone / GSO Debt Funds Management Europe II Limited |
Ireland |
|
Blackstone / GSO Debt Funds Management Europe Limited |
Ireland |
|
Blackstone / GSO Global Dynamic Credit Feeder Fund (Cayman) LP |
Cayman Islands |
|
Blackstone / GSO Global Dynamic Credit Funding Designated Activity Company |
Ireland |
|
Blackstone / GSO Global Dynamic Credit Master Fund |
Ireland |
|
Blackstone / GSO Global Dynamic Credit USD Feeder Fund (Ireland) |
Ireland |
|
Blackstone / GSO US Corporate Funding, Ltd. |
Cayman Islands |
|
Blackstone Administrative Services Canada ULC |
Canada |
|
Blackstone Administrative Services Partnership L.P. |
Delaware |
|
Blackstone Advisors India Private Limited |
India |
|
Blackstone Advisory Partners L.P. |
Delaware |
|
Blackstone Advisory Services L.L.C. |
Delaware |
|
Blackstone AG Associates L.P. |
Cayman Islands |
|
Blackstone AG L.L.C. |
Delaware |
|
Blackstone AG Ltd. |
Cayman Islands |
|
Blackstone Alternative Asset Management Associates LLC |
Delaware |
|
Blackstone Alternative Asset Management L.P. |
Delaware |
|
Blackstone Alternative Investment Advisors LLC |
Delaware |
|
Blackstone Alternative Solutions L.L.C. |
Delaware |
|
Blackstone Asia Family Investment Partnership - ESC (Cayman) - NQ L.P. |
Cayman Islands |
|
Blackstone Asia Family Investment Partnership - ESC (Cayman) L.P. |
Cayman Islands |
|
Blackstone Assessoria em Investimentos Ltda |
Brazil |
|
Blackstone BCLP Associates (Cayman) Ltd. |
Cayman Islands |
|
Blackstone BGSL Holdings LLC |
Delaware |
|
Blackstone Capital Partners Holdings Director L.L.C. |
Delaware |
|
Blackstone Catalyst Holdco L.L.C. |
Delaware |
|
Blackstone CEMA II GP L.P. |
Delaware |
|
Blackstone CEMA L.L.C. |
Delaware |
|
Blackstone CEMA NQ L.L.C. |
Delaware |
|
Blackstone Clarus DE L.L.C. |
Delaware |
|
Blackstone Clarus GP L.L.C. |
Delaware |
2
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Clarus GP L.P. |
Delaware |
|
Blackstone Clarus I L.L.C. |
Delaware |
|
Blackstone Clarus II L.L.C. |
Delaware |
|
Blackstone Clarus III L.L.C. |
Delaware |
|
Blackstone Clean Technology Advisors L.L.C. |
Delaware |
|
Blackstone Clean Technology Associates L.L.C |
Delaware |
|
Blackstone COE India Private Limited |
India |
|
Blackstone Commercial Real Estate Debt Associates L.L.C. |
Delaware |
|
Blackstone Commercial Real Estate Debt Associates-NQ L.L.C. |
Delaware |
|
Blackstone Communications Advisors I L.L.C. |
Delaware |
|
Blackstone Communications GP L.L.C. |
Delaware |
|
Blackstone Communications Management Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone Communications Management Associates I L.L.C. |
Delaware |
|
Blackstone Core Equity Advisors L.L.C. |
Delaware |
|
Blackstone Core Equity Management Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone Core Equity Management Associates (Cayman) NQ L.P. |
Cayman Islands |
|
Blackstone Core Equity Management Associates II (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Core Equity Management Associates II L.P. |
Delaware |
|
Blackstone Core Equity Management Associates L.L.C. |
Delaware |
|
Blackstone Core Equity Management Associates NQ L.L.C. |
Delaware |
|
Blackstone CQP Common Holdco GP LLC |
Delaware |
|
Blackstone Credit Liquidity Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone Credit Liquidity Associates L.L.C. |
Delaware |
|
Blackstone Credit Liquidity GP L.P. |
Delaware |
|
Blackstone Credit Liquidity Partners GP L.L.C. |
Delaware |
|
Blackstone Dawn Holdings ESC (Cayman) Ltd |
Cayman Islands |
|
Blackstone DD Advisors L.L.C. |
Delaware |
|
Blackstone DD Associates L.L.C. |
Delaware |
|
Blackstone DL Mezzanine Associates L.P. |
Delaware |
|
Blackstone DL Mezzanine Management Associates L.L.C. |
Delaware |
|
Blackstone EMA II L.L.C. |
Delaware |
|
Blackstone EMA II NQ L.L.C. |
Delaware |
|
Blackstone EMA III (Lux) L.L.C. |
Delaware |
|
Blackstone EMA III GP L.P. |
Delaware |
|
Blackstone EMA III L.L.C. |
Delaware |
|
Blackstone EMA III Ltd. |
Cayman Islands |
|
Blackstone EMA L.L.C. |
Delaware |
|
Blackstone EMA NQ L.L.C. |
Delaware |
|
Blackstone Energy Family Investment Partnership (Cayman) ESC L.P. |
Cayman Islands |
|
Blackstone Energy Family Investment Partnership (Cayman) II - ESC L.P. |
Cayman Islands |
|
Blackstone Energy Family Investment Partnership (Cayman) L.P. |
Cayman Islands |
|
Blackstone Energy Family Investment Partnership ESC L.P. |
Delaware |
|
Blackstone Energy Family Investment Partnership II - ESC L.P. |
Delaware |
|
Blackstone Energy Family Investment Partnership II - ESC NQ L.P. |
Delaware |
|
Blackstone Energy Family Investment Partnership L.P. |
Delaware |
|
Blackstone Energy Family Investment Partnership NQ ESC L.P. |
Delaware |
|
Blackstone Energy LR Associates (Cayman) II Ltd. |
Cayman Islands |
|
Blackstone Energy LR Associates (Cayman) Ltd. |
Cayman Islands |
|
Blackstone Energy Management Associates (Cayman) II L.P. |
Cayman Islands |
3
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Energy Management Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone Energy Management Associates II L.L.C. |
Delaware |
|
Blackstone Energy Management Associates II NQ L.L.C. |
Delaware |
|
Blackstone Energy Management Associates III (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Energy Management Associates III L.P. |
Delaware |
|
Blackstone Energy Management Associates L.L.C. |
Delaware |
|
Blackstone Energy Management Associates NQ L.L.C. |
Delaware |
|
Blackstone Europe Fund Management S.à r.l. |
Luxembourg |
|
Blackstone Family Cleantech Investment Partnership L.P. |
Delaware |
|
Blackstone Family Communications Partnership (Cayman) L.P. |
Cayman Islands |
|
Blackstone Family Communications Partnership I L.P. |
Delaware |
|
Blackstone Family Core Equity Partnership - ESC L.P. |
Delaware |
|
Blackstone Family Core Equity Partnership - ESC NQ L.P. |
Delaware |
|
Blackstone Family Core Equity Partnership (Cayman) - ESC L.P. |
Cayman Islands |
|
Blackstone Family Core Equity Partnership (Cayman) - ESC NQ L.P. |
Cayman Islands |
|
Blackstone Family Investment Partnership (Cayman) IV-A L.P. |
Cayman Islands |
|
Blackstone Family Investment Partnership (Cayman) V L.P. |
Cayman Islands |
|
Blackstone Family Investment Partnership (Cayman) VI - ESC L.P. |
Cayman Islands |
|
Blackstone Family Investment Partnership (Cayman) VI L.P. |
Cayman Islands |
|
Blackstone Family Investment Partnership (Cayman) VII - ESC L.P. |
Cayman Islands |
|
Blackstone Family Investment Partnership (Cayman) VII - ESC NQ L.P. |
Cayman Islands |
|
Blackstone Family Investment Partnership (Delaware) V-NQ L.P. |
Delaware |
|
Blackstone Family Investment Partnership IV - A L.P. |
Delaware |
|
Blackstone Family Investment Partnership V L.P. |
Delaware |
|
Blackstone Family Investment Partnership V Prime L.P. |
Delaware |
|
Blackstone Family Investment Partnership V USS L.P. |
Delaware |
|
Blackstone Family Investment Partnership VI - ESC L.P. |
Delaware |
|
Blackstone Family Investment Partnership VI L.P. |
Delaware |
|
Blackstone Family Investment Partnership VII - ESC L.P. |
Delaware |
|
Blackstone Family Investment Partnership VII-ESC NQ L.P. |
Delaware |
|
Blackstone Family Investment Partnership VI-NQ ESC L.P. |
Delaware |
|
Blackstone Family Investment Partnership VI-NQ L.P. |
Delaware |
|
Blackstone Family Real Estate Debt Strategies II - ESC L.P. |
Delaware |
|
Blackstone Family Real Estate Debt Strategies II - Side-by-Side GP L.L.C. |
Delaware |
|
Blackstone Family Real Estate Debt Strategies III - ESC L.P. |
Delaware |
|
Blackstone Family Real Estate Debt Strategies III Side-by-Side GP L.L.C. |
Delaware |
|
Blackstone Family Real Estate Partnership III L.P. |
Delaware |
|
Blackstone Family Strategic Capital Holdings Investment Partnership II ESC L.P. |
Delaware |
|
Blackstone Family Tactical Opportunities FCC Investment Partnership - NQ - ESC L.P. |
Delaware |
|
Blackstone Family Tactical Opportunities FCC Investment Partnership-NQ L.P. |
Delaware |
|
Blackstone Family Tactical Opportunities Investment Partnership - NQ - ESC L.P. |
Delaware |
|
Blackstone Family Tactical Opportunities Investment Partnership - NQ L.P. |
Delaware |
|
Blackstone Family Tactical Opportunities Investment Partnership (Cayman) - NQ - ESC L.P. |
Cayman Islands |
|
Blackstone Family Tactical Opportunities Investment Partnership (Cayman) - NQ L.P. |
Cayman Islands |
|
Blackstone Family Tactical Opportunities Investment Partnership (Cayman) ESC L.P. |
Cayman Islands |
|
Blackstone Family Tactical Opportunities Investment Partnership ESC L.P. |
Delaware |
|
Blackstone Family Tactical Opportunities Investment Partnership III - NQ - ESC L.P. |
Delaware |
|
Blackstone Family Tactical Opportunities Investment Partnership III (Cayman) - NQ - ESC L.P. |
Cayman Islands |
|
Blackstone Family Tactical Opportunities Investment Partnership III (Cayman) ESC L.P. |
Cayman Islands |
4
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Family Tactical Opportunities Investment Partnership III (Cayman) NQ L.P. |
Cayman Islands |
|
Blackstone Family Tactical Opportunities Investment Partnership III ESC L.P. |
Delaware |
|
Blackstone FI Mezzanine (Cayman) Ltd. |
Cayman Islands |
|
Blackstone FI Mezzanine Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone GPV Tactical Partners (Mauritius) - N Ltd. |
Mauritius |
|
Blackstone Group Holdings L.L.C. |
Delaware |
|
Blackstone Group Holdings L.P. |
Delaware |
|
Blackstone Group International Holdings L.L.C. |
Delaware |
|
Blackstone Growth Advisors L.L.C. |
Delaware |
|
Blackstone Growth Associates (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Growth Associates L.P. |
Delaware |
|
Blackstone Harrington Associates L.L.C. |
Delaware |
|
Blackstone Harrington Employee Associates L.L.C. |
Delaware |
|
Blackstone Harrington Holdings Ltd. |
Cayman Islands |
|
Blackstone Holdings AI L.P. |
Delaware |
|
Blackstone Holdings Finance Co. L.L.C. |
Delaware |
|
Blackstone Holdings I - Sub (BAAM) GP L.L.C. |
Delaware |
|
Blackstone Holdings I L.P. |
Delaware |
|
Blackstone Holdings I/II GP L.L.C. |
Delaware |
|
Blackstone Holdings II L.P. |
Delaware |
|
Blackstone Holdings III GP L.P. |
Delaware |
|
Blackstone Holdings III GP Limited Partner L.L.C. |
Delaware |
|
Blackstone Holdings III GP Management L.L.C. |
Delaware |
|
Blackstone Holdings III GP Sub L.L.C. |
Delaware |
|
Blackstone Holdings III L.P. |
Canada |
|
Blackstone Holdings IV GP L.P. |
Canada |
|
Blackstone Holdings IV GP Limited Partner L.L.C. |
Delaware |
|
Blackstone Holdings IV GP Management (Delaware) L.P. |
Delaware |
|
Blackstone Holdings IV GP Management L.L.C. |
Delaware |
|
Blackstone Holdings IV L.P. |
Canada |
|
Blackstone Infrastructure Advisors L.L.C. |
Delaware |
|
Blackstone Infrastructure Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone Infrastructure Associates (Cayman) NQ L.P. |
Cayman Islands |
|
Blackstone Infrastructure Associates (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Infrastructure Associates L.P. |
Delaware |
|
Blackstone Infrastructure Associates Ltd. |
Cayman Islands |
|
Blackstone Infrastructure Associates Non-ECI L.P. |
Delaware |
|
Blackstone Infrastructure Associates NQ L.P. |
Delaware |
|
Blackstone Infrastructure Associates NQ Ltd. |
Cayman Islands |
|
Blackstone Infrastructure Partners Holdings Director L.L.C. |
Delaware |
|
Blackstone Innovations (Cayman) III L.P. |
Cayman Islands |
|
Blackstone Innovations III L.L.C. |
Delaware |
|
Blackstone Innovations L.L.C. |
Delaware |
|
Blackstone Insurance Solutions Europe LLP |
United Kingdom |
|
Blackstone Intermediary Holdco L.L.C. |
Delaware |
|
Blackstone ISF Advisors LP |
Delaware |
|
Blackstone ISG-I Advisors L.L.C. |
Delaware |
|
Blackstone ISG-II Advisors L.L.C. |
Delaware |
|
Blackstone Korea Advisors L.L.C. |
Delaware |
5
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Korea Advisors Ltd. |
South Korea |
|
Blackstone Liberty Place Associates L.P. |
Delaware |
|
Blackstone Liberty Place L.L.C. |
Delaware |
|
Blackstone Life Sciences Advisors L.L.C. |
Delaware |
|
Blackstone Life Sciences Associates V (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Life Sciences Associates V L.P. |
Delaware |
|
Blackstone LR Associates (Cayman) IV Ltd. |
Cayman Islands |
|
Blackstone LR Associates (Cayman) V Ltd. |
Cayman Islands |
|
Blackstone LR Associates (Cayman) VI Ltd. |
Cayman Islands |
|
Blackstone LR Associates (Cayman) VII Ltd. |
Cayman Islands |
|
Blackstone LR Associates (Cayman) VII NQ Ltd. |
Cayman Islands |
|
Blackstone LR Associates (Cayman) VIII Ltd. |
Cayman Islands |
|
Blackstone LR Associates (Cayman) V-NQ Ltd. |
Cayman Islands |
|
Blackstone Management Associates (Cayman II) V-NQ L.P. |
Cayman Islands |
|
Blackstone Management Associates (Cayman) IV L.P. |
Cayman Islands |
|
Blackstone Management Associates (Cayman) V L.P. |
Cayman Islands |
|
Blackstone Management Associates (Cayman) VI L.P. |
Cayman Islands |
|
Blackstone Management Associates (Cayman) VII L.P. |
Cayman Islands |
|
Blackstone Management Associates (Cayman) VII NQ L.P. |
Cayman Islands |
|
Blackstone Management Associates (Delaware) V-NQ L.P. |
Delaware |
|
Blackstone Management Associates Asia (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Management Associates Asia L.P. |
Cayman Islands |
|
Blackstone Management Associates Asia NQ L.P. |
Cayman Islands |
|
Blackstone Management Associates IV L.L.C. |
Delaware |
|
Blackstone Management Associates V L.L.C. |
Delaware |
|
Blackstone Management Associates V USS L.L.C. |
Delaware |
|
Blackstone Management Associates VI L.L.C. |
Delaware |
|
Blackstone Management Associates VII L.L.C. |
Delaware |
|
Blackstone Management Associates VII NQ L.L.C. |
Delaware |
|
Blackstone Management Associates VIII (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Management Associates VIII L.P. |
Delaware |
|
Blackstone Management Associates VI-NQ L.L.C. |
Delaware |
|
Blackstone Management Partners (India) L.L.C. |
Delaware |
|
Blackstone Management Partners III L.L.C. |
Delaware |
|
Blackstone Management Partners IV L.L.C. |
Delaware |
|
Blackstone Management Partners L.L.C. |
Delaware |
|
Blackstone Mezzanine Advisors L.P. |
Delaware |
|
Blackstone Mezzanine Associates II L.P. |
Delaware |
|
Blackstone Mezzanine Associates II USS L.P. |
Delaware |
|
Blackstone Mezzanine Associates L.P. |
Delaware |
|
Blackstone Mezzanine GP L.L.C. |
Delaware |
|
Blackstone Mezzanine Holdings II L.P. |
Delaware |
|
Blackstone Mezzanine Holdings II USS L.P. |
Delaware |
|
Blackstone Mezzanine Management Associates II Apt. L.L.C. |
Delaware |
|
Blackstone Mezzanine Management Associates II L.L.C. |
Delaware |
|
Blackstone Mezzanine Management Associates II USS L.L.C. |
Delaware |
|
Blackstone Mezzanine Management Associates L.L.C. |
Delaware |
|
Blackstone Multi-Asset (Cayman) - NQ GP L.P. |
Cayman Islands |
|
Blackstone Multi-Asset Advisors L.L.C. |
Delaware |
6
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Multi-Asset GP II - NQ L.P. |
Delaware |
|
Blackstone Multi-Asset GP L.P. |
Delaware |
|
Blackstone Multi-Asset Private Associates L.L.C. |
Delaware |
|
Blackstone OBS Associates L.P. |
Cayman Islands |
|
Blackstone OBS L.L.C. |
Delaware |
|
Blackstone OBS Ltd. |
Cayman Islands |
|
Blackstone Participation Partnership (Cayman) IV L.P. |
Cayman Islands |
|
Blackstone Participation Partnership (Cayman) V L.P. |
Cayman Islands |
|
Blackstone Participation Partnership (Delaware) V-NQ L.P. |
Delaware |
|
Blackstone Participation Partnership IV L.P. |
Delaware |
|
Blackstone Participation Partnership V L.P. |
Delaware |
|
Blackstone Participation Partnership V Prime L.P. |
Delaware |
|
Blackstone Participation Partnership V USS L.P. |
Delaware |
|
Blackstone PAT Holdings IV, L.L.C. |
Delaware |
|
Blackstone PB I L.L.C. |
Delaware |
|
Blackstone PB II L.L.C. |
Delaware |
|
Blackstone PBPEF V L.P. |
Cayman Islands |
|
Blackstone PBPIF III L.P. |
Cayman Islands |
|
Blackstone PBREF III L.P. |
Cayman Islands |
|
Blackstone Pearl Luxembourg S.à r.l. |
Luxembourg |
|
Blackstone PFF I L.P. |
Cayman Islands |
|
Blackstone PIF IV L.P. |
Cayman Islands |
|
Blackstone PM (Germany) GmbH |
Germany |
|
Blackstone Power & Natural Resources Holdco G.P. LLC |
Delaware |
|
Blackstone PPEF VI L.P. |
Cayman Islands |
|
Blackstone Property Advisors L.P. |
Delaware |
|
Blackstone Property Associates Asia (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Property Associates Asia L.P. |
Cayman Islands |
|
Blackstone Property Associates Asia Ltd |
Cayman Islands |
|
Blackstone Property Associates Europe (Delaware) L.L.C. |
Delaware |
|
Blackstone Property Associates Europe (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Property Associates Europe L.P. |
Cayman Islands |
|
Blackstone Property Associates Europe Ltd. |
Cayman Islands |
|
Blackstone Property Associates International L.P. |
Cayman Islands |
|
Blackstone Property Associates International-NQ L.P. |
Cayman Islands |
|
Blackstone Property Associates L.L.C. |
Delaware |
|
Blackstone Property Associates L.P. |
Delaware |
|
Blackstone Property Holdings Director L.L.C. |
Delaware |
|
Blackstone Property International L.L.C. |
Delaware |
|
Blackstone Property International Ltd. |
Cayman Islands |
|
Blackstone Property International-NQ L.L.C. |
Delaware |
|
Blackstone Property Management L.L.C. |
Delaware |
|
Blackstone Property Management Limited |
United Kingdom |
|
Blackstone Property Management SARL |
France |
|
Blackstone PTI Associates L.P. |
Delaware |
|
Blackstone Real Estate (Cayman) IV Ltd. |
Cayman Islands |
|
Blackstone Real Estate (Cayman) V Ltd. |
Cayman Islands |
|
Blackstone Real Estate (Cayman) VI Ltd. |
Cayman Islands |
|
Blackstone Real Estate (Cayman) VII Ltd. |
Cayman Islands |
7
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Real Estate (Cayman) VIII Ltd. |
Cayman Islands |
|
Blackstone Real Estate (Cayman) VIII-NQ Ltd. |
Cayman Islands |
|
Blackstone Real Estate (Cayman) VII-NQ Ltd. |
Cayman Islands |
|
Blackstone Real Estate (Cayman) VI-Q Ltd. |
Cayman Islands |
|
Blackstone Real Estate (Chiswick) Holdings, L.P. |
Cayman Islands |
|
Blackstone Real Estate Advisors Europe L.P. |
Delaware |
|
Blackstone Real Estate Advisors III L.P. |
Delaware |
|
Blackstone Real Estate Advisors International L.L.C. |
Delaware |
|
Blackstone Real Estate Advisors IV L.L.C. |
Delaware |
|
Blackstone Real Estate Advisors L.P. |
Delaware |
|
Blackstone Real Estate Advisors V L.P. |
Delaware |
|
Blackstone Real Estate Associates (Alberta) IV L.P. |
Canada |
|
Blackstone Real Estate Associates (Offshore) IX L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates (Offshore) V L.P. |
Canada |
|
Blackstone Real Estate Associates (Offshore) VI L.P. |
Canada |
|
Blackstone Real Estate Associates (Offshore) VII L.P. |
Canada |
|
Blackstone Real Estate Associates (Offshore) VIII L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates (Offshore) VIII-NQ L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates (Offshore) VII-NQ L.P. |
Canada |
|
Blackstone Real Estate Associates (Offshore) VI-Q L.P. |
Canada |
|
Blackstone Real Estate Associates Asia II (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Real Estate Associates Asia II L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates Asia L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates Asia-NQ L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates Europe (Delaware) III L.L.C. |
Delaware |
|
Blackstone Real Estate Associates Europe (Delaware) III-NQ L.L.C. |
Delaware |
|
Blackstone Real Estate Associates Europe (Delaware) IV L.L.C. |
Delaware |
|
Blackstone Real Estate Associates Europe (Delaware) IV-NQ L.L.C. |
Delaware |
|
Blackstone Real Estate Associates Europe (Delaware) V L.L.C. |
Delaware |
|
Blackstone Real Estate Associates Europe (Delaware) VI L.L.C. |
Delaware |
|
Blackstone Real Estate Associates Europe (Delaware) VI-Q L.L.C. |
Delaware |
|
Blackstone Real Estate Associates Europe (Delaware) V-NQ L.L.C. |
Delaware |
|
Blackstone Real Estate Associates Europe III L.P. |
Delaware |
|
Blackstone Real Estate Associates Europe III-NQ L.P. |
Delaware |
|
Blackstone Real Estate Associates Europe IV L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates Europe IV-NQ L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates Europe V L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates Europe VI (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Real Estate Associates Europe VI L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates Europe V-NQ L.P. |
Cayman Islands |
|
Blackstone Real Estate Associates International (Delaware) II L.L.C. |
Delaware |
|
Blackstone Real Estate Associates International (Delaware) L.L.C. |
Delaware |
|
Blackstone Real Estate Associates International II L.P. |
Delaware |
|
Blackstone Real Estate Associates International L.P. |
Delaware |
|
Blackstone Real Estate Associates IV L.P. |
Delaware |
|
Blackstone Real Estate Associates IX (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Real Estate Associates IX L.P. |
Delaware |
|
Blackstone Real Estate Associates V L.P. |
Delaware |
|
Blackstone Real Estate Associates VI - NQ L.P. |
Delaware |
8
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Real Estate Associates VI (GGP) L.L.C. |
Delaware |
|
Blackstone Real Estate Associates VI L.L.C. |
Delaware |
|
Blackstone Real Estate Associates VI L.P. |
Delaware |
|
Blackstone Real Estate Associates VI-ESH L.P. |
Delaware |
|
Blackstone Real Estate Associates VII L.P. |
Delaware |
|
Blackstone Real Estate Associates VIII L.P. |
Delaware |
|
Blackstone Real Estate Associates VIII-NQ L.P. |
Delaware |
|
Blackstone Real Estate Associates VII-NQ L.P. |
Delaware |
|
Blackstone Real Estate Australia Pty Limited |
Australia |
|
Blackstone Real Estate Capital GP Asia LLP |
United Kingdom |
|
Blackstone Real Estate Capital GP VII L.L.P. |
United Kingdom |
|
Blackstone Real Estate Capital GP VIII LLP |
United Kingdom |
|
Blackstone Real Estate Capital UK Asia II NQ Limited |
United Kingdom |
|
Blackstone Real Estate Capital UK Asia II Q Limited |
United Kingdom |
|
Blackstone Real Estate Capital UK Asia Limited |
United Kingdom |
|
Blackstone Real Estate Capital UK VII Limited |
United Kingdom |
|
Blackstone Real Estate Capital UK VIII Limited |
United Kingdom |
|
Blackstone Real Estate CMBS Associates - G L.L.C. |
Delaware |
|
Blackstone Real Estate CMBS Associates Non-IG L.L.C. |
Delaware |
|
Blackstone Real Estate Debt Strategies Associates High-Grade L.P. |
Delaware |
|
Blackstone Real Estate Debt Strategies Associates II L.P. |
Delaware |
|
Blackstone Real Estate Debt Strategies Associates III L.P. |
Delaware |
|
Blackstone Real Estate Debt Strategies Associates IV (AIV) L.P. |
Delaware |
|
Blackstone Real Estate Debt Strategies Associates IV (Cayman) Ltd. |
Cayman Islands |
|
Blackstone Real Estate Debt Strategies Associates IV (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Real Estate Debt Strategies Associates IV L.P. |
Delaware |
|
Blackstone Real Estate Europe (Cayman) III Ltd. |
Cayman Islands |
|
Blackstone Real Estate Europe (Cayman) III-NQ Ltd. |
Cayman Islands |
|
Blackstone Real Estate Europe (Cayman) IV Ltd. |
Cayman Islands |
|
Blackstone Real Estate Europe (Cayman) IV-NQ Ltd. |
Cayman Islands |
|
Blackstone Real Estate Europe (Cayman) V Ltd. |
Cayman Islands |
|
Blackstone Real Estate Europe (Cayman) VI Ltd. |
Cayman Islands |
|
Blackstone Real Estate Europe (Cayman) V-NQ Ltd. |
Cayman Islands |
|
Blackstone Real Estate Holdings (Alberta) IV L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) IX-ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings (Offshore) V L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) VI L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) VI-ESC L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) VII L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) VII-ESC L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) VIII-ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings (Offshore) VIII-NQ-ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings (Offshore) VII-NQ L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) VII-NQ-ESC L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) VI-Q ESC L.P. |
Canada |
|
Blackstone Real Estate Holdings (Offshore) VI-Q L.P. |
Canada |
|
Blackstone Real Estate Holdings Asia - ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings Asia II - ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings Asia-NQ-ESC L.P. |
Cayman Islands |
9
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Real Estate Holdings Director L.L.C. |
Delaware |
|
Blackstone Real Estate Holdings Europe III L.P. |
Canada |
|
Blackstone Real Estate Holdings Europe III-ESC L.P. |
Canada |
|
Blackstone Real Estate Holdings Europe III-NQ ESC L.P. |
Canada |
|
Blackstone Real Estate Holdings Europe III-NQ L.P. |
Canada |
|
Blackstone Real Estate Holdings Europe IV ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings Europe IV-NQ ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings Europe V ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings Europe VI ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings Europe V-NQ ESC L.P. |
Cayman Islands |
|
Blackstone Real Estate Holdings III L.P. |
Delaware |
|
Blackstone Real Estate Holdings International - A L.P. |
Canada |
|
Blackstone Real Estate Holdings International II - Q L.P. |
Canada |
|
Blackstone Real Estate Holdings International II L.P. |
Canada |
|
Blackstone Real Estate Holdings IV L.P. |
Delaware |
|
Blackstone Real Estate Holdings IX-ESC L.P. |
Delaware |
|
Blackstone Real Estate Holdings V L.P. |
Delaware |
|
Blackstone Real Estate Holdings VI - ESC L.P. |
Delaware |
|
Blackstone Real Estate Holdings VI - NQ ESC L.P. |
Delaware |
|
Blackstone Real Estate Holdings VI - NQ L.P. |
Delaware |
|
Blackstone Real Estate Holdings VI L.P. |
Delaware |
|
Blackstone Real Estate Holdings VII - ESC L.P. |
Delaware |
|
Blackstone Real Estate Holdings VII L.P. |
Delaware |
|
Blackstone Real Estate Holdings VIII-ESC L.P. |
Delaware |
|
Blackstone Real Estate Holdings VIII-NQ-ESC L.P. |
Delaware |
|
Blackstone Real Estate Holdings VII-NQ L.P. |
Delaware |
|
Blackstone Real Estate Holdings VII-NQ-ESC L.P. |
Delaware |
|
Blackstone Real Estate Income Advisors L.L.C. |
Delaware |
|
Blackstone Real Estate International (Cayman) II Ltd |
Cayman Islands |
|
Blackstone Real Estate International (Cayman) Ltd. |
Cayman Islands |
|
Blackstone Real Estate Korea Ltd. |
South Korea |
|
Blackstone Real Estate Management Associates Europe III L.P. |
Canada |
|
Blackstone Real Estate Management Associates Europe III-NQ L.P. |
Canada |
|
Blackstone Real Estate Management Associates International II L.P. |
Canada |
|
Blackstone Real Estate Management Associates International L.P. |
Canada |
|
Blackstone Real Estate Partners Capital GP Asia II NQ LLP |
United Kingdom |
|
Blackstone Real Estate Partners Capital GP Asia II Q LLP |
United Kingdom |
|
Blackstone Real Estate Partners Holdings Limited |
United Kingdom |
|
Blackstone Real Estate Partners Limited |
United Kingdom |
|
Blackstone Real Estate Partners Supervisory GP Asia II NQ LLP |
United Kingdom |
|
Blackstone Real Estate Partners Supervisory GP Asia II Q LLP |
United Kingdom |
|
Blackstone Real Estate Partners VII L.L.C. |
Delaware |
|
Blackstone Real Estate Partners VI-VD L.L.C. |
Delaware |
|
Blackstone Real Estate Services L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations (Alberta) II GP L.P. |
Delaware |
|
Blackstone Real Estate Special Situations Advisors (Isobel) L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations Advisors L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations Associates Europe (Delaware) L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations Associates Europe L.P. |
Delaware |
10
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Real Estate Special Situations Associates Europe- NQ L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations Associates II L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations Associates II-NQ L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations Associates L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations Europe (Cayman) Ltd. |
Cayman Islands |
|
Blackstone Real Estate Special Situations Europe GP L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations Europe GP L.P. |
Delaware |
|
Blackstone Real Estate Special Situations Holdings Europe - ESC L.P. |
Canada |
|
Blackstone Real Estate Special Situations Holdings Europe L.P. |
Canada |
|
Blackstone Real Estate Special Situations Holdings II - ESC L.P. |
Delaware |
|
Blackstone Real Estate Special Situations Holdings II L.P. |
Delaware |
|
Blackstone Real Estate Special Situations Holdings II-NQ L.P. |
Delaware |
|
Blackstone Real Estate Special Situations Holdings L.P. |
Cayman Islands |
|
Blackstone Real Estate Special Situations Management Associates Europe L.P. |
Canada |
|
Blackstone Real Estate Special Situations Side-by-Side GP L.L.C. |
Delaware |
|
Blackstone Real Estate Special Situations-NQ Side-by-Side GP L.L.C. |
Delaware |
|
Blackstone Real Estate Supervisory UK Asia II NQ Limited |
United Kingdom |
|
Blackstone Real Estate Supervisory UK Asia II Q Limited |
United Kingdom |
|
Blackstone Real Estate Supervisory UK Asia Limited |
United Kingdom |
|
Blackstone Real Estate Supervisory UK Limited |
United Kingdom |
|
Blackstone Real Estate Supervisory UK VII Limited |
United Kingdom |
|
Blackstone Real Estate Supervisory UK VIII Limited |
United Kingdom |
|
Blackstone Real Estate UK Limited |
United Kingdom |
|
Blackstone Residential GP L.L.C. |
Delaware |
|
Blackstone Residential L.L.C. |
Delaware |
|
Blackstone Residential Opportunities Associates L.L.C. |
Delaware |
|
Blackstone Residential Opportunities L.L.C. |
Delaware |
|
Blackstone Senfina Advisors L.L.C. |
Delaware |
|
Blackstone Senfina Associates L.L.C. |
Delaware |
|
Blackstone Services Mauritius II Ltd |
Mauritius |
|
Blackstone Services Mauritius Ltd |
Mauritius |
|
Blackstone SGP Associates (Cayman) IV Ltd. |
Cayman Islands |
|
Blackstone SGP Family Investment Partnership (Cayman) IV-A L.P. |
Cayman Islands |
|
Blackstone SGP Management Associates (Cayman) IV L.P. |
Cayman Islands |
|
Blackstone SGP Participation Partnership (Cayman) IV L.P. |
Cayman Islands |
|
Blackstone Singapore Pte. Ltd. |
Singapore |
|
Blackstone Strategic Alliance Advisors L.L.C. |
Delaware |
|
Blackstone Strategic Alliance Associates II L.L.C. |
Delaware |
|
Blackstone Strategic Alliance Associates III L.L.C. |
Delaware |
|
Blackstone Strategic Alliance Associates L.L.C. |
Delaware |
|
Blackstone Strategic Alliance Fund L.P. |
Delaware |
|
Blackstone Strategic Capital Advisors L.L.C. |
Delaware |
|
Blackstone Strategic Capital Associates (Cayman) II Ltd. |
Cayman Islands |
|
Blackstone Strategic Capital Associates B L.L.C. |
Delaware |
|
Blackstone Strategic Capital Associates II (Lux) S.à r.l. |
Luxembourg |
|
Blackstone Strategic Capital Associates II B L.P. |
Delaware |
|
Blackstone Strategic Capital Associates II L.P. |
Delaware |
|
Blackstone Strategic Capital Associates L.L.C. |
Delaware |
|
Blackstone Strategic Capital Holdings Director L.L.C. |
Delaware |
11
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone Strategic Opportunity Associates L.L.C. |
Delaware |
|
Blackstone Tactical Opportunities AD Associates (Cayman) - NQ Ltd. |
Cayman Islands |
|
Blackstone Tactical Opportunities AD Associates (Cayman) Ltd. |
Cayman Islands |
|
Blackstone Tactical Opportunities Advisors L.L.C. |
Delaware |
|
Blackstone Tactical Opportunities Associates - NQ L.L.C. |
Delaware |
|
Blackstone Tactical Opportunities Associates (Lux) GP S.à r.l. |
Luxembourg |
|
Blackstone Tactical Opportunities Associates II L.L.C. |
Delaware |
|
Blackstone Tactical Opportunities Associates III - NQ L.P. |
Delaware |
|
Blackstone Tactical Opportunities Associates III L.P. |
Delaware |
|
Blackstone Tactical Opportunities Associates L.L.C. |
Delaware |
|
Blackstone Tactical Opportunities LR Associates (Cayman) - NQ Ltd. |
Cayman Islands |
|
Blackstone Tactical Opportunities LR Associates (Cayman) Ltd. |
Cayman Islands |
|
Blackstone Tactical Opportunities LR Associates-B (Cayman) Ltd. |
Cayman Islands |
|
Blackstone Tactical Opportunities Management Associates (Cayman) - NQ L.P. |
Cayman Islands |
|
Blackstone Tactical Opportunities Management Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone Tactical Opportunities Management Associates III (Cayman) - NQ L.P. |
Cayman Islands |
|
Blackstone Tactical Opportunities Management Associates III (Cayman) L.P. |
Cayman Islands |
|
Blackstone Tactical Opportunities RL Associates L.P. |
Cayman Islands |
|
Blackstone Tactical Opportunities SG SBS (Cayman) L.P. |
Cayman Islands |
|
Blackstone Tactical Opportunities Stable Income Associates - NQ L.L.C. |
Delaware |
|
Blackstone Tactical Opportunities Stable Income Management Associates (Cayman) - NQ L.P. |
Cayman Islands |
|
Blackstone Tactical Opportunities Stable Income Management Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone Tenex L.P. |
Delaware |
|
Blackstone TM L.L.C. |
Delaware |
|
Blackstone TORO Reit Manager, L.L.C. |
Delaware |
|
Blackstone Total Alternatives Solution Associates 2015 I L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates 2016 L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates IV L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates V L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates VI L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates-NQ 2015 I L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates-NQ 2016 L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates-NQ IV L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates-NQ L.P. |
Delaware |
|
Blackstone Total Alternatives Solution Associates-NQ V L.P. |
Delaware |
|
Blackstone Treasury Asia Pte. Limited |
Singapore |
|
Blackstone Treasury Holdings II L.L.C. |
Delaware |
|
Blackstone Treasury Holdings III L.L.C. |
Delaware |
|
Blackstone Treasury International Holdings L.L.C. |
Delaware |
|
Blackstone Treasury Solutions Advisors L.L.C. |
Delaware |
|
Blackstone Treasury Solutions Associates L.L.C. |
Delaware |
|
Blackstone UK Mortgage Opportunities LR Associates (Cayman) Ltd. |
Cayman Islands |
|
Blackstone UK Mortgage Opportunities Management Associates (Cayman) L.P. |
Cayman Islands |
|
Blackstone UK Real Estate Supervisory Asia LLP |
United Kingdom |
|
Blackstone UK Real Estate Supervisory VII LLP |
United Kingdom |
|
Blackstone UK Real Estate Supervisory VIII LLP |
United Kingdom |
|
Blackstone/GSO Capital Solutions Associates LLC |
Delaware |
|
Blackstone/GSO Capital Solutions Overseas Associates LLC |
Delaware |
12
Name |
Jurisdiction of Incorporation or Organization |
|
Blackstone/GSO Debt Funds Europe (Luxembourg) S.à r.l. |
Luxembourg |
|
BMA Asia L.L.C. |
Delaware |
|
BMA Asia Ltd. |
Cayman Islands |
|
BMA Asia NQ L.L.C. |
Delaware |
|
BMA Asia NQ Ltd. |
Cayman Islands |
|
BMA V L.L.C. |
Delaware |
|
BMA V USS L.L.C. |
Delaware |
|
BMA VI L.L.C. |
Delaware |
|
BMA VII L.L.C. |
Delaware |
|
BMA VII NQ L.L.C. |
Delaware |
|
BMA VIII GP L.P. |
Delaware |
|
BMA VIII L.L.C. |
Delaware |
|
BMA VI-NQ L.L.C. |
Delaware |
|
BMEZ Advisors L.L.C. |
Delaware |
|
BMP II Side-by-Side GP L.L.C. |
Delaware |
|
BMP II USS Side-by-Side GP L.L.C. |
Delaware |
|
BPP Advisors L.L.C. |
Delaware |
|
BPP Core Asia Associates L.P. |
Cayman Islands |
|
BPP Core Asia Associates-NQ L.P. |
Cayman Islands |
|
BPP Core Asia L.L.C. |
Delaware |
|
BPP Core Asia Ltd. |
Cayman Islands |
|
BPP Core Asia-NQ L.L.C. |
Delaware |
|
BPP Core Asia-NQ Ltd. |
Cayman Islands |
|
BPP Pristine Co-Invest GP ULC |
Canada |
|
BPP Pristine Co-Invest Special LP ULC |
Canada |
|
BPP Pristine Holdings GP Limited |
Cayman Islands |
|
BRE Advisors Europe L.L.C. |
Delaware |
|
BRE Advisors III L.L.C. |
Delaware |
|
BRE Advisors International L.L.C. |
Delaware |
|
BRE Advisors IV L.L.C. |
Delaware |
|
BRE Advisors V L.L.C. |
Delaware |
|
BRE Advisors VI L.L.C. |
Delaware |
|
BRE Associates International (Cayman) II Ltd. |
Cayman Islands |
|
BRE/SW Green Associates L.P. |
Cayman Islands |
|
BREA Edens L.L.C. |
Delaware |
|
BREA Europe VI (Cayman) L.P. |
Cayman Islands |
|
BREA International (Cayman) II Ltd. |
Cayman Islands |
|
BREA International (Cayman) Ltd. |
Cayman Islands |
|
BREA IV L.L.C. |
Delaware |
|
BREA IX (Delaware) L.P. |
Delaware |
|
BREA IX (Offshore) (Cayman) L.P. |
Cayman Islands |
|
BREA IX L.L.C. |
Delaware |
|
BREA IX Ltd. |
Cayman Islands |
|
BREA OMP GP L.L.C. |
Delaware |
|
BREA V L.L.C. |
Delaware |
|
BREA VI L.L.C. |
Delaware |
|
BREA VI-ESH L.L.C. |
Delaware |
|
BREA VII L.L.C. |
Delaware |
|
BREA VIII L.L.C. |
Delaware |
13
Name |
Jurisdiction of Incorporation or Organization |
|
BREA VIII-NQ L.L.C. |
Delaware |
|
BREA VII-NQ L.L.C. |
Delaware |
|
BREA VI-NQ L.L.C. |
Delaware |
|
BREAI (Delaware) II L.L.C. |
Delaware |
|
BREAI II L.P. |
Delaware |
|
BRECA L.L.C. |
Delaware |
|
BREDS Associates HG Loan NQ L.P. |
Delaware |
|
BREDS Associates II Loan NQ L.P. |
Delaware |
|
BREDS Associates II NQ L.P. |
Delaware |
|
BREDS Associates III Loan NQ L.P. |
Delaware |
|
BREDS Associates III NQ PE L.P. |
Delaware |
|
BREDS Capital GP LLP |
United Kingdom |
|
BREDS Capital UK Limited |
United Kingdom |
|
BREDS Europe HG Holdings NQ GP Ltd. |
Cayman Islands |
|
BREDS HG GP NQ - AIV L.L.C. |
Delaware |
|
BREDS High-Grade GP L.L.C. |
Delaware |
|
BREDS II Feeder Fund GP L.P. |
Cayman Islands |
|
BREDS II Feeder GP LTD. |
Cayman Islands |
|
BREDS II GP - AC L.L.C. |
Delaware |
|
BREDS II GP - AC NQ L.L.C. |
Delaware |
|
BREDS II GP - Gaussian L.L.C. |
Delaware |
|
BREDS II GP - Gaussian NQ L.L.C. |
Delaware |
|
BREDS II GP L.L.C. |
Delaware |
|
BREDS II GP NQ - AIV L.L.C. |
Delaware |
|
BREDS II GP NQ L.L.C. |
Delaware |
|
BREDS II LR Associates (Cayman) - NQ Ltd. |
Cayman Islands |
|
BREDS III (Cayman) NQ Ltd. |
Cayman Islands |
|
BREDS III Associates (Cayman) NQ L.P. |
Cayman Islands |
|
BREDS III Capital GP LLP |
United Kingdom |
|
BREDS III Capital UK Limited |
United Kingdom |
|
BREDS III Feeder Fund GP L.P. |
Cayman Islands |
|
BREDS III GP L.L.C. |
Delaware |
|
BREDS III GP NQ - AIV L.L.C. |
Delaware |
|
BREDS III GP NQ L.L.C. |
Delaware |
|
BREDS III GP NQ PE L.L.C. |
Delaware |
|
BREDS III Supervisory UK LLP |
United Kingdom |
|
BREDS III UK L.L.C. |
Delaware |
|
BREDS III UK Supervisory Limited |
United Kingdom |
|
BREDS IV (AIV) GP L.L.C. |
Delaware |
|
BREDS IV Feeder Fund GP L.P. |
Cayman Islands |
|
BREDS IV GP L.L.C. |
Delaware |
|
BREDS IV L.P. |
Delaware |
|
BREDS IV-A L.P. |
Delaware |
|
BREDS Supervisory UK LLP |
United Kingdom |
|
BREDS UK L.L.C. |
Delaware |
|
BREDS UK Supervisory Limited |
United Kingdom |
|
BREIT Special Limited Partner L.P. |
Delaware |
|
BREMAI II L.P. |
Canada |
|
BREP Asia - NQ L.L.C. |
Delaware |
14
Name |
Jurisdiction of Incorporation or Organization |
|
BREP Asia - NQ Side-by-Side GP L.L.C. |
Delaware |
|
BREP Asia II - Q Ltd. |
Cayman Islands |
|
BREP Asia II L.L.C. |
Delaware |
|
BREP Asia II Ltd. |
Cayman Islands |
|
BREP Asia L.L.C. |
Delaware |
|
BREP Asia Ltd. |
Cayman Islands |
|
BREP Asia Side-by-Side GP L.L.C. |
Delaware |
|
BREP Asia UK L.L.C. |
Delaware |
|
BREP Chiswick GP L.L.C. |
Delaware |
|
BREP Co-Invest GP L.L.C. |
Delaware |
|
BREP Co-Invest GP L.P. |
Delaware |
|
BREP Edens Associates L.P. |
Delaware |
|
BREP Europe III GP L.L.C. |
Delaware |
|
BREP Europe III GP L.P. |
Delaware |
|
BREP Europe III-NQ GP L.L.C. |
Delaware |
|
BREP Europe III-NQ GP L.P. |
Delaware |
|
BREP International GP L.L.C. |
Delaware |
|
BREP International GP L.P. |
Delaware |
|
BREP International II - Q GP L.P. |
Delaware |
|
BREP International II GP L.L.C. |
Delaware |
|
BREP International II GP L.P. |
Delaware |
|
BREP International II-Q GP L.L.C. |
Delaware |
|
BREP IV (Offshore) GP L.L.C. |
Delaware |
|
BREP IV (Offshore) GP L.P. |
Delaware |
|
BREP IV Side-by-Side GP L.L.C. |
Delaware |
|
BREP IX (Offshore) GP L.L.C. |
Delaware |
|
BREP IX (Offshore) GP L.P. |
Delaware |
|
BREP IX-NQ (Offshore) GP L.P. |
Delaware |
|
BREP OMP Associates L.P. |
Delaware |
|
BREP V (Offshore) GP L.L.C. |
Delaware |
|
BREP V (Offshore) GP L.P. |
Delaware |
|
BREP V Side-by-Side GP L.L.C. |
Delaware |
|
BREP VI - NQ Side-by-Side GP L.L.C. |
Delaware |
|
BREP VI - Q (Offshore) GP L.L.C. |
Delaware |
|
BREP VI (Offshore) GP L.L.C. |
Delaware |
|
BREP VI (Offshore) GP L.P. |
Delaware |
|
BREP VI Side-by-Side GP L.L.C. |
Delaware |
|
BREP VII (Offshore) GP L.L.C. |
Delaware |
|
BREP VII (Offshore) GP L.P. |
Delaware |
|
BREP VII Side-by-Side GP L.L.C. |
Delaware |
|
BREP VIII (Offshore) GP L.L.C. |
Delaware |
|
BREP VIII (Offshore) GP L.P. |
Delaware |
|
BREP VIII Side-by-Side GP L.L.C. |
Delaware |
|
BREP VIII UK L.L.C. |
Delaware |
|
BREP VIII-NQ (Offshore) GP L.L.C. |
Delaware |
|
BREP VIII-NQ (Offshore) GP L.P. |
Delaware |
|
BREP VIII-NQ Side-by-Side GP L.L.C. |
Delaware |
|
BREP VII-NQ (Offshore) GP L.L.C. |
Delaware |
|
BREP VII-NQ (Offshore) GP L.P. |
Delaware |
15
Name |
Jurisdiction of Incorporation or Organization |
|
BREP VII-NQ Side-by-Side GP L.L.C. |
Delaware |
|
BREP VI-Q (Offshore) GP L.P. |
Delaware |
|
BRESE L.L.C. |
Delaware |
|
BSAF III GP LLC |
Delaware |
|
BSCA Advisors L.L.C. |
Delaware |
|
BSCA Associates L.L.C. |
Delaware |
|
BSCA II B GP L.P. |
Delaware |
|
BSCA II B L.L.C. |
Delaware |
|
BSCA II GP L.P. |
Delaware |
|
BSCA II L.L.C. |
Delaware |
|
BSCH Side-By-Side GP L.L.C. |
Delaware |
|
BSSF Holdings Intermediary (Cayman) Ltd. |
Cayman Islands |
|
BSSF Holdings-S L.L.C. |
Delaware |
|
BSSF I AIV GP L.L.C. |
Delaware |
|
BTAS Associates L.L.C. |
Delaware |
|
BTAS Associates-NQ L.L.C. |
Delaware |
|
BTD CP Holdings LP |
Delaware |
|
BTO - FCC NQ Side-by-Side GP L.L.C. |
Delaware |
|
BTO - NQ Side-by-Side GP L.L.C. |
Delaware |
|
BTO AD (Cayman) - NQ GP L.P. |
Cayman Islands |
|
BTO AD GP L.L.C. |
Delaware |
|
BTO Ascenty ESC (Cayman), L.P. |
Cayman Islands |
|
BTO Asia SBS Holding I Ltd. |
Cayman Islands |
|
BTO BA Fiber ESC (Cayman) L.P. |
Cayman Islands |
|
BTO BTIG ESC Holdings L.P. |
Delaware |
|
BTO Caesars Manager L.L.C. |
Delaware |
|
BTO Commodities Manager L.L.C. |
Delaware |
|
BTO CR Fund Associates (Cayman) L.P. |
Cayman Islands |
|
BTO DE GP - NQ L.L.C. |
Delaware |
|
BTO Eletson Manager L.L.C. |
Delaware |
|
BTO ESC Park Holdings L.P. |
Delaware |
|
BTO ESC Precision Holdings L.P. |
Delaware |
|
BTO ESC PTI International Holdings L.P. |
Cayman Islands |
|
BTO ESC PTI US Holdings L.P. |
Delaware |
|
BTO ESC RGB Holdings L.P. |
Delaware |
|
BTO European Diversified Property Manager LLC |
Delaware |
|
BTO FCC Associates - NQ L.L.C. |
Delaware |
|
BTO Feather Holdings ESC (Mauritius) Ltd |
Mauritius |
|
BTO Flames Manager Inc. |
Canada |
|
BTO Gamma Manager L.L.C. |
Delaware |
|
BTO George Manager L.L.C. |
Delaware |
|
BTO GP - NQ L.L.C. |
Delaware |
|
BTO GP Finance LLC |
Delaware |
|
BTO GP L.L.C. |
Delaware |
|
BTO Hafnia Manager L.L.C. |
Delaware |
|
BTO Hercules Manager L.L.C. |
Delaware |
|
BTO HFZ Manager L.L.C. |
Delaware |
|
BTO Holdco Manager L.L.C. |
Delaware |
|
BTO Holdings (Cayman) - NQ Manager L.L.C. |
Delaware |
16
Name |
Jurisdiction of Incorporation or Organization |
|
BTO Holdings Cayman Manager L.L.C. |
Delaware |
|
BTO Holdings Manager - NQ L.L.C. |
Delaware |
|
BTO Holdings Manager L.L.C. |
Delaware |
|
BTO IH3 Manager L.L.C. |
Delaware |
|
BTO Italian Manager L.L.C. |
Delaware |
|
BTO Koala Manager L.L.C. |
Delaware |
|
BTO Life Settlement Manager L.L.C. |
Delaware |
|
BTO LT Holdings ESC Pte. Ltd. |
Singapore |
|
BTO NCR Holdings - ESC L.P. |
Delaware |
|
BTO Night Manager L.L.C. |
Delaware |
|
BTO Omaha Manager L.L.C. |
Delaware |
|
BTO One Market Plaza Manager L.L.C. |
Delaware |
|
BTO Peachtree Fund ESC L.P. |
Delaware |
|
BTO Peachtree Holdings Manager L.L.C. |
Delaware |
|
BTO Pluto Manager L.L.C. |
Delaware |
|
BTO Resolution Manager L.L.C. |
Delaware |
|
BTO Rothesay Manager L.L.C. |
Delaware |
|
BTO RPL Manager L.L.C. |
Delaware |
|
BTO Side-by-Side GP L.L.C. |
Delaware |
|
BTOA - NQ L.L.C. |
Delaware |
|
BTOA AD L.P. |
Delaware |
|
BTOA II L.L.C. |
Delaware |
|
BTOA III - NQ L.P. |
Delaware |
|
BTOA III (Cayman) - GP L.P. |
Cayman Islands |
|
BTOA III (Cayman) NQ GP L.P. |
Cayman Islands |
|
BTOA III L.P. |
Delaware |
|
BTOA III Lux L.L.C. |
Delaware |
|
BTOA L.L.C. |
Delaware |
|
BTOSI Holdings Manager - NQ L.L.C. |
Delaware |
|
BTOSIA - NQ L.L.C. |
Delaware |
|
BTOSIA L.L.C. |
Delaware |
|
BTOSIAO - NQ L.L.C. |
Delaware |
|
BUMO GP L.L.C. |
Delaware |
|
BX CQP Common Holdco Parent GP LLC |
Delaware |
|
BX CQP SuperHoldCo GP LLC |
Delaware |
|
BX CQP SuperHoldCo Parent GP LLC |
Delaware |
|
BX Mexico Advisors, S.A. de C.V. |
Mexico |
|
BX RE Ventures L.L.C. |
Delaware |
|
BX REIT Advisors L.L.C. |
Delaware |
|
BXGA GP L.P. |
Delaware |
|
BXGA L.L.C. |
Delaware |
|
BXLS LR Associates (Cayman) V Ltd. |
Cayman Islands |
|
BXLS V GP L.P. |
Delaware |
|
BXLS V L.L.C. |
Delaware |
|
BXMT Advisors L.L.C. |
Delaware |
|
BZDIF Associates GP (DEL) L.L.C. |
Delaware |
|
BZDIF Associates GP Ltd. |
Cayman Islands |
|
BZDIF Associates L.P. |
Cayman Islands |
|
BZDIF Associates Ltd. |
Cayman Islands |
17
Name |
Jurisdiction of Incorporation or Organization |
|
Catalyst Fund Holdco L.P. |
Delaware |
|
Catskill Park CLO, Ltd. |
Cayman Islands |
|
CFS Holdings (Cayman) ESC, L.P. |
Cayman Islands |
|
CHK Mid-Con Co-Invest Associates LLC |
Delaware |
|
Clarus IV GP, L.P. |
Delaware |
|
Clarus IV GP, LLC |
Delaware |
|
Clarus Ventures, LLC |
Delaware |
|
Cleveland Tonkawa CIM, LLC |
Delaware |
|
Cook Park CLO, Ltd. |
Cayman Islands |
|
CT High Grade Partners II Co-Invest, LLC |
Delaware |
|
CT Investment Management Co., LLC |
Delaware |
|
Dewolf Park CLO, Ltd. |
Cayman Islands |
|
Equity Healthcare L.L.C. |
Delaware |
|
FourFive SBS Holding Ltd |
Cayman Islands |
|
G QCM GP S.à r.l. |
Luxembourg |
|
G QCM SLP LLC |
Delaware |
|
Gilbert Park CLO, Ltd |
Cayman Islands |
|
Grannus Holdings Manager - NQ LLC |
Delaware |
|
Graphite Holdings LLC |
Delaware |
|
Greenwood Park CLO, Ltd. |
Cayman Islands |
|
Grippen Park CLO, Ltd. |
Cayman Islands |
|
GSO / Blackstone Debt Funds Management LLC |
Delaware |
|
GSO 3 Bear Energy Holdings Associates LLC |
Delaware |
|
GSO Advisor Holdings L.L.C. |
Delaware |
|
GSO Aiguille des Grands Montets Associates LLC |
Delaware |
|
GSO Aiguille Des Grands Montets GP LTD |
Cayman Islands |
|
GSO Altus Holdings Associates LLC |
Delaware |
|
GSO AMD Holdings Associates LLC |
Delaware |
|
GSO Asset Management LLC |
Delaware |
|
GSO Associates LLC |
Delaware |
|
GSO Bakken Associates I LLC |
Delaware |
|
GSO Bandera Strategic Credit Associates I LLC |
Delaware |
|
GSO Beacon Co-Invest Associates LLC |
Delaware |
|
GSO BISA Blazer Associates LLC |
Delaware |
|
GSO Blazer Holdings Associates LLC |
Delaware |
|
GSO BSOF SLP LLC |
Delaware |
|
GSO Cactus Credit Opportunities Associates LLC |
Delaware |
|
GSO CalPeak Energy Associates LLC |
Delaware |
|
GSO Capital Advisors II LLC |
Delaware |
|
GSO Capital Advisors LLC |
Delaware |
|
GSO Capital Opportunities Associates II (Cayman) Ltd. |
Cayman Islands |
|
GSO Capital Opportunities Associates II (Delaware) LLC |
Delaware |
|
GSO Capital Opportunities Associates II (Facility) LLC |
Delaware |
|
GSO Capital Opportunities Associates II LP |
Cayman Islands |
|
GSO Capital Opportunities Associates III LLC |
Delaware |
|
GSO Capital Opportunities Associates IV (EEA) GP S.à r.l. |
Luxembourg |
|
GSO Capital Opportunities Associates IV LP |
Cayman Islands |
|
GSO Capital Opportunities Associates LLC |
Delaware |
|
GSO Capital Opportunities Overseas Associates LLC |
Delaware |
18
Name |
Jurisdiction of Incorporation or Organization |
|
GSO Capital Partners (California) LLC |
Delaware |
|
GSO Capital Partners (Texas) GP LLC |
Texas |
|
GSO Capital Partners (Texas) LP |
Texas |
|
GSO Capital Partners (UK) Limited |
United Kingdom |
|
GSO Capital Partners GP L.L.C. |
Delaware |
|
GSO Capital Partners LP |
Delaware |
|
GSO Capital Solutions Associates II (Cayman) Ltd. |
Cayman Islands |
|
GSO Capital Solutions Associates II (Delaware) LLC |
Delaware |
|
GSO Capital Solutions Associates II LP |
Cayman Islands |
|
GSO Capital Solutions Associates III (Cayman) Ltd. |
Cayman Islands |
|
GSO Capital Solutions Associates III (Delaware) LLC |
Delaware |
|
GSO Capital Solutions Associates III (EEA) GP S.à r.l. |
Luxembourg |
|
GSO Capital Solutions Associates III LP |
Cayman Islands |
|
GSO Churchill Associates II LLC |
Delaware |
|
GSO Churchill Associates LLC |
Delaware |
|
GSO CLO Opportunity Associates LLC |
Delaware |
|
GSO Coastline Credit Associates LLC |
Delaware |
|
GSO COF III Co-Investment Associates LLC |
Delaware |
|
GSO Co-Investment Fund-D Associates LLC |
Delaware |
|
GSO Co-Investor WPX-C Associates LLC |
Delaware |
|
GSO Community Development Capital Group Associates LP |
Delaware |
|
GSO Community Development Capital Group IV Associates LP |
Delaware |
|
GSO Convoy Holdings Associates LLC |
Delaware |
|
GSO Credit Alpha Annex Associates LLC |
Delaware |
|
GSO Credit Alpha Associates II (Cayman) Ltd. |
Cayman Islands |
|
GSO Credit Alpha Associates II (Delaware) LLC |
Delaware |
|
GSO Credit Alpha Associates II LP |
Cayman Islands |
|
GSO Credit Alpha Associates LLC |
Delaware |
|
GSO Credit Alpha Diversified Alternatives Associates LLC |
Delaware |
|
GSO Credit-A Associates LLC |
Delaware |
|
GSO CSF III Co-Investment Associates (Cayman) Ltd. |
Cayman Islands |
|
GSO CSF III Co-Investment Associates (Delaware) LLC |
Delaware |
|
GSO CSF III Co-Investment Associates LP |
Cayman Islands |
|
GSO Delaware Holdings Associates LLC |
Delaware |
|
GSO Diamond Portfolio Associates LLC |
Delaware |
|
GSO Direct Lending Fund-D Associates LLC |
Delaware |
|
GSO DL Co-Invest CI Associates LLC |
Delaware |
|
GSO DL Co-Invest EIS Associates LLC |
Delaware |
|
GSO DP Associates LLC |
Delaware |
|
GSO DrillCo Holdings Associates II LLC |
Delaware |
|
GSO DrillCo Holdings Associates LLC |
Delaware |
|
GSO EM Holdings Associates LLC |
Delaware |
|
GSO Energy E&P Holdings 4 Co-Invest Associates LLC |
Delaware |
|
GSO Energy Lending Fund-A Onshore Associates LLC |
Delaware |
|
GSO Energy Lending Fund-A Overseas Associates LLC |
Delaware |
|
GSO Energy Liquid Opportunities Associates LLC |
Delaware |
|
GSO Energy Market Opportunities Associates LLC |
Delaware |
|
GSO Energy Partners-A Associates LLC |
Delaware |
|
GSO Energy Partners-B Associates LLC |
Delaware |
19
Name |
Jurisdiction of Incorporation or Organization |
|
GSO Energy Partners-C Associates II LLC |
Delaware |
|
GSO Energy Partners-C Associates LLC |
Delaware |
|
GSO Energy Partners-D Associates LLC |
Delaware |
|
GSO Energy Partners-E Associates LLC |
Delaware |
|
GSO Energy Select Opportunities Associates II (Cayman) Ltd. |
Cayman Islands |
|
GSO Energy Select Opportunities Associates II (Delaware) LLC |
Delaware |
|
GSO Energy Select Opportunities Associates II (EEA) GP S.à r.l.(Luxembourg) |
Luxembourg |
|
GSO Energy Select Opportunities Associates II LP |
Cayman Islands |
|
GSO Energy Select Opportunities Associates LLC |
Delaware |
|
GSO Equitable Holdings Associates LLC |
Delaware |
|
GSO European Senior Debt Associates II (Cayman) Ltd. |
Cayman Islands |
|
GSO European Senior Debt Associates II (Delaware) LLC |
Delaware |
|
GSO European Senior Debt Associates II (EEA) GP S.à r.l. |
Luxembourg |
|
GSO European Senior Debt Associates II LP |
Cayman Islands |
|
GSO European Senior Debt Associates LLC |
Delaware |
|
GSO FPP Associates LLC |
Delaware |
|
GSO FSGCOF Holdings LLC |
Delaware |
|
GSO FSIC Holdings LLC |
Delaware |
|
GSO FSIC III Holdings LLC |
Delaware |
|
GSO FSIC IV Holdings LLC |
Delaware |
|
GSO GEPH Holdings Associates LLC |
Delaware |
|
GSO Global Dynamic Credit Associates LLC |
Delaware |
|
GSO Harrington Credit Alpha Associates L.L.C. |
Delaware |
|
GSO Holdings I L.L.C. |
Delaware |
|
GSO Holdings II L.L.C. |
Delaware |
|
GSO Holdings III L.L.C. |
Delaware |
|
GSO IH Holdings Associates LLC |
Delaware |
|
GSO IM Holdings Associates LLC |
Delaware |
|
GSO Jasmine Associates LLC |
Delaware |
|
GSO Kafka Associates LLC |
Delaware |
|
GSO M5 Holdings Associates LLC |
Delaware |
|
GSO MAK Associates LLC |
Delaware |
|
GSO MC Claim Co-Invest Associates LLC |
Delaware |
|
GSO MMBU Holdings Associates LLC |
Delaware |
|
GSO Nemo Associates LLC |
Delaware |
|
GSO Oasis Credit Associates LLC |
Delaware |
|
GSO Orchid Associates LLC |
Delaware |
|
GSO Overseas Associates LLC |
Delaware |
|
GSO Palmetto Capital Associates LLC |
Delaware |
|
GSO Palmetto Opportunistic Associates LLC |
Delaware |
|
GSO Rodeo Holdings Associates LLC |
Delaware |
|
GSO SFRO Associates LLC |
Delaware |
|
GSO SJ Partners Associates LLC |
Delaware |
|
GSO Spartan Associates LLC |
Delaware |
|
GSO ST Holdings Associates LLC |
Delaware |
|
GSO Targeted Opportunity Associates LLC |
Delaware |
|
GSO Targeted Opportunity Master Associates LLC |
Delaware |
|
GSO Targeted Opportunity Overseas Associates LLC |
Delaware |
|
GSO Tiger Holdings Associates LLC |
Delaware |
20
Name |
Jurisdiction of Incorporation or Organization |
|
GSO WPX Holdings Associates LLC |
Delaware |
|
Harvest Fund Advisors, LLC |
Delaware |
|
Harvest Fund Holdco L.P. |
Delaware |
|
Harvest Fund Manager LLC |
Delaware |
|
Huskies Acquisition LLC |
Delaware |
|
Immortality ESC Ltd. |
Cayman Islands |
|
Lexington National Land Services, LLC |
New York |
|
Lifestyle SBS (Singapore) Holding Pte. Ltd. |
Singapore |
|
Lifestyle SBS Holding Ltd |
Cayman Islands |
|
LNLS HoldCo LLC |
Delaware |
|
LNLS Upper Holdings LLC |
Delaware |
|
Long Point Park CLO, Ltd. |
Cayman Islands |
|
LSV Fund 3 GP (Cayman) Ltd. |
Cayman Islands |
|
LSV Fund 4 GP (Cayman) Ltd. |
Cayman Islands |
|
LSV Fund GP (Cayman) Ltd. |
Cayman Islands |
|
MB Asia REA L.L.C. |
Delaware |
|
MB Asia REA L.P. |
Cayman Islands |
|
MB Asia REA Ltd. |
Cayman Islands |
|
MB Asia Real Estate Associates L.P. |
Cayman Islands |
|
Motion Aggregator GP L.L.C. |
Delaware |
|
SP Polar Holdings GP, LLC |
Delaware |
|
SP RA II (Cayman) - NQ GP L.P. |
Cayman Islands |
|
SP RA II LR Associates (Cayman) - NQ Ltd. |
Cayman Islands |
|
SP VII Acquisitions GP LLC |
Delaware |
|
SPFS Advisors L.L.C. |
Delaware |
|
SPFSA 2007 L.L.C. |
Delaware |
|
SPFSA I L.L.C. |
Delaware |
|
SPFSA II L.L.C. |
Delaware |
|
SPFSA III L.L.C. |
Delaware |
|
SPFSA Infrastructure III L.L.C. |
Delaware |
|
SPFSA IV L.L.C. |
Delaware |
|
SPFSA Opportunities L.L.C. |
Delaware |
|
SPFSA RA II - NQ L.L.C. |
Delaware |
|
SPFSA RA II L.L.C. |
Delaware |
|
SPFSA RE VII L.L.C. |
Delaware |
|
SPFSA V L.L.C. |
Delaware |
|
SPFSA VI L.L.C. |
Delaware |
|
SPFSA VII L.L.C. |
Delaware |
|
SPFSA VIII L.L.C. |
Delaware |
|
Steamboat Credit Opportunities GP LLC |
Delaware |
|
Stewart Park CLO, LTD. |
Cayman Islands |
|
StoneCo IV Corporation |
Delaware |
|
Strategic Partners Fund Solutions Advisors L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates - NC Real Asset Opportunities, L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates 2007 L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates DE L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates II L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates III L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates Impact (Lux) S.à r.l. |
Luxembourg |
21
Name |
Jurisdiction of Incorporation or Organization |
|
Strategic Partners Fund Solutions Associates Infrastructure III (Lux) S.à r.l. |
Luxembourg |
|
Strategic Partners Fund Solutions Associates Infrastructure III L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates IV L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates Opportunities L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates RA II (Cayman) - NQ L.P. |
Cayman Islands |
|
Strategic Partners Fund Solutions Associates RA II, L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates Real Estate VI L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates Real Estate VII L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates V L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates VI L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates VII AIV L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates VII L.P. |
Delaware |
|
Strategic Partners Fund Solutions Associates VIII (Lux) S.à r.l. |
Luxembourg |
|
Strategic Partners Fund Solutions Associates VIII L.P. |
Delaware |
|
Strategic Partners Fund Solutions GP (Offshore) Ltd. |
Cayman Islands |
|
TBG Realty Corp. |
New York |
|
Thayer Park, CLO Ltd. |
Cayman Islands |
|
The Blackstone Group (Australia) Pty Limited |
Australia |
|
The Blackstone Group (HK) Holdings Limited |
Hong Kong |
|
The Blackstone Group (HK) Limited |
Hong Kong |
|
The Blackstone Group Denmark ApS |
Denmark |
|
The Blackstone Group Germany GmbH |
Germany |
|
The Blackstone Group International (Cayman) Limited |
Cayman Islands |
|
The Blackstone Group International Limited |
United Kingdom |
|
The Blackstone Group International Partners LLP |
United Kingdom |
|
The Blackstone Group Japan K.K. |
Japan |
|
The Blackstone Group Mauritius II Ltd |
Mauritius |
|
The Blackstone Group Mauritius Ltd |
Mauritius |
|
The Blackstone Group Spain SL. |
Spain |
|
Utica Royalty Associates II LLC |
Delaware |
22
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements on Form S-8 of our report dated February 28, 2020, relating to the consolidated financial statements of The Blackstone Group Inc. and subsidiaries (Blackstone) and the effectiveness of Blackstones internal control over financial reporting, appearing in the Annual Report on Form 10-K of Blackstone for the year ended December 31, 2019:
|
Registration Statement No. 333-230020 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8. |
|
Registration Statement No. 333-223346 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-216225 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-209758 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-202359 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-194234 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-186999 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-179775 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-172451 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-165115 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-157635 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
|
Registration Statement No. 333-143948 (The Blackstone Group Inc. Amended and Restated 2007 Equity Incentive Plan) on Form S-8 |
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 28, 2020
Exhibit 31.1
Chief Executive Officer Certification
I, Stephen A. Schwarzman, certify that:
1. |
I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2019 of The Blackstone Group Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. |
The Registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in the Registrants internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting; and |
5. |
The Registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting. |
Date: February 28, 2020
/s/ Stephen A. Schwarzman |
Stephen A. Schwarzman |
Chief Executive Officer |
Exhibit 31.2
Chief Financial Officer Certification
I, Michael S. Chae, certify that:
1. |
I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2019 of The Blackstone Group Inc.; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report; |
4. |
The Registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) |
Disclosed in this report any change in the Registrants internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting; and |
5. |
The Registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrants auditors and the audit committee of the Registrants board of directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and |
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting. |
Date: February 28, 2020
/s/ Michael S. Chae |
Michael S. Chae |
Chief Financial Officer |
Exhibit 32.1
Certification of the Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of The Blackstone Group Inc. (the Company) on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Stephen A. Schwarzman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 28, 2020
/s/ Stephen A. Schwarzman |
Stephen A. Schwarzman |
Chief Executive Officer |
* |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document. |
Exhibit 32.2
Certification of the Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of The Blackstone Group Inc. (the Company) on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Michael S. Chae, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: February 28, 2020
/s/ Michael S. Chae |
Michael S. Chae |
Chief Financial Officer |
* |
The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document. |